Chip Filson
Former NCUA Board Secretary Rosemary Hardiman, Public Affairs Officer, Joan Pinkerton, Executive Director and General Counsel, Bucky Sebastion and Director, Office of Programs and CLF President Chip Filson reunite for Bucky’s 80th Birthday on the President’s holiday weekend.
Once upon a time there was a tavernWhere we used to raise a glass or twoRemember how we laughed away the hoursThink of all the great things we would do?
Bucky Sebastian has reached yet another, notable milestone. On February 12, Lincoln’s Birthday, Mr. Sebastian will be rolling the oldometer over one more notch to 80! Eighty years of success in all endeavors: regulator, business entrepreneur, credit union/philanthropy CEO, husband, father, grandfather, fierce friend, free spirit.
Reared in Illinois with 7 siblings – 5 older! – it is surprising that Sebastian survived childhood. The older kids tried to make sure Bucky knew “his place” in the world – last at the table, remain silent until asked, remember you exist only to serve – us! Given the circumstances, Bucky learned early how to fight, regardless of the odds; was imbued with a servant’s heart; but never fully overcame his bashfulness and reluctance to speak.
After high school, Bucky decided to become a priest, but the Jesuits wouldn’t have him. The Jesuits evidently found Bucky a bit too “over the top”, too evangelical!. Perhaps they feared a devil’s advocate? At that age – or at any age for that matter – subtlety was not Bucky Sebastian’s best trait.
Bucky also had some difficulty with the Jesuit vows of “poverty, chastity, and obedience”. He could accept poverty, would work on chastity, but obedience – well he seemed to lack that gene. Anyway, he didn’t like the limited prospect of preaching only once a week! Having decided he couldn’t work for God, Sebastian made the next best choice; he decided to play at being God…and went to Loyola to become a lawyer. The Jesuits tried to hide their disappointment!
Having graduated, and having his never-really-lacking self-confidence reaffirmed with the law degree; Bucky was now even more convinced: that he knew what was right, he knew what you needed, and he was determined to make sure you knew what you needed. So, his next career choice was also entirely logical; he became a financial regulator, ending up at the NCUA. Regulators like telling folks what to do; and, most importantly to Bucky, can usually speak at length without fear of interruption.
At NCUA, Sebastian became an oratorical outrage – and an immediate problem. A bane to pomposity and self-importance, Mr. Sebastian taunted the status quo and all infestations of mindless, conventional wisdom. He was a mischievous mocker, a red hot provocateer. Sebastian invented the novel idea at NCUA that a regulator should listen first and speak last – still reluctantly used.
Bucky Sebastian’s thinking has always been expansive, his mouth more so – with profoundly, positive results! He made folks uncomfortable, prodding them to say what they thought, explain why, and then challenging their thinking. Stand and deliver, prove your point or die trying. Fatalities were not infrequent. But in doing so, he changed minds, he changed hearts – for the better.
But, Bucky Sebastian’s impact was profound even when in error. In 1982, Mr. Sebastian opined that federal credit unions could pretty much forget having any limits on their membership. A bench of Lawyers Supreme said, “un-huh”. An all-hands-on-deck credit union movement effort was required to convince Congress to bail Mr. Sebastian out – which they did, creating a new, brighter future for credit unions.
Sebastian, if you know the man, to this day still asserts that the Lawyers Supreme erred in that decision; claims that Lincoln was born on his birthday, not vice-versa; and that when President Lincoln led off his most famous speech with “Four score…”, Lincoln was simply trying to say…
Happy Birthday, Wendell “Bucky” Sebastian!
(… wouldn’t try to argue with him about it, if I were you!)
From Greylock Federal Credit Union:
We have officially welcomed over 100,000 Members! We are deeply proud to be the hometown financial institution of choice by so many in our community and we want to say THANK YOU!
From Springfield High School’s student newspaper on the school play:
. . .One of the important aspects of high school is the opportunity to be a part of something bigger than yourself. Being involved in the production process, like Hashmi stated, has allowed students to contribute to the creation of a captivating performance. It is a chance to collaborate with a team of talented individuals and learn new skills along the way. Plus, there’s a unique sense of camaraderie that comes with being part of a play. So, if you enjoy the idea of working behind the scenes and being a crucial part of bringing a story to life, the fall play is definitely worth considering!
This short video “story” from Thailand should be required viewing for every credit union board that has ever contemplated the merging of their long- serving coop. It is a stunning example you won’t forget. It disproves the capitalist adage, “Everybody has a price.”
(https://www.youtube.com/watch?v=1HtaYMhDr4k)
This week has seen another bank’s stock price fall by over half from $10 to $4 per share.
From Yahoo finance: The Pressure on NYCB is Not Letting Up. At yearend 2023 the bank reported $116 billion in assets and $10.8 billion in total equity.
Its history in brief: New York Community Bancorp, Inc. (NYCB), headquartered in Hicksville, New York, is a bank holding company for Flagstar Bank. In 2023, the bank operates 395 branches in New York, Michigan, New Jersey, Ohio, Florida, Arizona and Wisconsin under multiple local brands acquired via multiple acquisitions.
Einstein’s explanation of the credit union advantage, especially in times of crisis, is simple-Time: The only reason for time is so that everything doesn’t happen at once.
The cooperative member-owner structure gives management and the owners time to straighten things out when problems occur. Let markets cycle through their phases. However, there is no respite in the winner-take-all world of competition when a market owned firm falls from grace.
In my recent look back on several mergers, I reached out to a participant from several years ago. Had the members seen any change for the better? The reply: it’s just another bank without heart or soul or members, just customers…but then, we might just be American Idiots …
If we’re honest, culture forms us as much as our statements of personal values.
Human beings can live without many things, but not with an absence of meaning. In our “free” market driven economy dominated by for-profit firms, cooperative CEO’s and boards will continue to cloth self-interested actions in moralisms and myths.
Fortunately, members are not idiots.
This is how one family introduces their children to credit unions, from a post earlier this week.
The parents take their role seriously. The baby is growing up. They are now helping her become familiar with credit union leadership responsibility.
She is looking to find the page on youth programs.
Here it is. One hopes more senior credit union volunteers spend this much time reviewing their board policies, especially on succession planning.
I graduated from Springfield High School. It never had a program like the one described in the SHS student newspaper from January 25.
The opening introduces a dedicated teacher helping students learn about the realities of small business.
For years, students have been restricted by the confines of the educational system, simply following the “status quo” and doing the bare minimum just to graduate. As time has passed, schools have developed their programs and have prepared students to genuinely pursue opportunities that never seemed possible for a regular high school student.
Springfield High School has developed a plethora of programs for students to grow their experience for potential careers, one of which is the entrepreneurship program.
Karri Devlin, a veteran teacher at SHS, runs this program with the intention of helping students reach their full potential as a business owner. “We try to emphasize the importance of leadership and creativity in regards to starting your own business. We talk about how to promote your business, and how to manage it financially. They also learn how to sell a product and collect the money. Students can pick their marketing team and sell their own product on what’s called Market Days at lunch. They’ll set up their products at lunch and we’ll try to sell them to the student body. We have some grant money that helps buy the supplies but the students pretty much have to come up with the money for the supplies I don’t provide. They also have to determine the markup and how much they’re going to sell it for to make sure that they can cover their costs.”
After describing one student’s efforts, the article closes with this observation:
From Mrs. Devlin’s entrepreneurship program, to creating their own businesses, student entrepreneurs have proven time and time again that they have an unstoppable drive. . .With their innovative young minds, they are the future of the business industry. And to those who do not possess the entrepreneurial spirit, support your classmates by buying local!
This high school in Springfield, Illinois would seem an ideal opportunity for credit union partners in this hands on, real world of “classroom” startups.
A week ago I reported that credit unions with only 9% of total financial assets, had taken down 27% of the emergency BTLP.
Also that financial firms were now arbitraging the special fund by borrowing and reinvesting the funds in overnight reserves, earning a spread. Borrowings had grown from $129 billion at yearend to $168 billion this week, in a period of quiet markets.
That opportunity is now over. The Fed announced the facility will close on March 11. The 307 credit union borrowers of $35 billion (as of September 2023) will have to pay off their loans or shift borrowings elsewhere.
Last Thursday, January 18, 2024 D. Michael Riley a career credit union professional died. He was 77 years old and is survived by his wife of 41 years, Lori.
After serving in the military, Mike graduated from the University of Alabama joining NCUA as a field examiner in 1972. A little more than 13 years later (May 1985) he succeeded me as Director of the Office of Programs. This responsibility included overseeing the newly capitalized NCUSIF, the CLF and the Agency’s Supervision and Examination programs.
Regional Director Riley speaking at NCUA’s December 1984 National Examiners and Credit Union Conference.
His meteoric rise to the highest responsibility in agency reflected his ability to get things done. In 1982 he was reassigned from NCUA’s Central Office to become Director in Region Six-the Western part of the United States.
California was the epicenter of problem credit unions exacerbated by double digit inflation and unemployment and the number and size of credit unions. I believe Mike, at 35, was the youngest examiner ever promoted to RD at NCUA.
Chairman Callahan believed that effective supervision required the leadership of the six RD’s, not rule-making in Washington. They were the critical managers of the agency’s most important responsibility—the examination program. Success was achieved not by cashing out problems with insurance money; but by developing resolution plans unique to each situation and underwritten by cooperative patience.
Regional Directors Allen Carver, Mike Riley, Lyn Skyles and Executive Director Bucky Sebastian at the December 1984 NCUA Conference.
Mike’s progress from new examiner to RD in a decade is a testament to his grasp of credit union operations. Most importantly he bought into the changes Ed Callahan was seeking. He knew how to get things done, an uncommon trait in a bureaucracy. He had the ability to work with everyone, but was not a “yes” person.
Last July I wrote a brief article about Ed’s time as a football coach and how that influenced his approach to leadership: The Roots and Legacy of a Credit Union Leader.
Mike responded: Great article, I know he taught me a lot.
When Ed left after three years and eight months as NCUA Chair, the small team of five whom he brought from Illinois also left. Senator Roger Jepsen, the next NCUA Chair, did not have a background in either administration or credit unions.
This is when Mike made his most critical contribution. Significant change in a governmental bureaucracy will not last if successors do not believe in the new directions.
It is a bureaucratic reflex that when a Chair leaves, staff reasserts their priorities. This is especially the case when incoming Board members have little or no prior credit union experience. Instead Mike insured the fundamental tenets from the Callahan era of deregulation were sustained.
When returning to DC in 1985 as Director of the Office of Programs, he testified with Chairman Callahan on the CLF’s annual budget appropriation within his first 30 days. In September 11 and 12, 1985 he was NCUA’s spokesperson to the House Banking Committee on credit unions’ condition as the new NCUA Chair had yet to take over.
As reported in NCUA News September 1985, he said “federal credit unions had strong gains and a remarkable track record in an increasingly competitive, deregulated environment.” He called the capitalization of the NCUIF, “the most significant development since its founding in 1971. It had quadrupled in size solely through the financial support of insured credit unions.”
In the wake of the Ohio and Maryland S&L crises, he stated NCUA supports the dual chartering system and the option of private insurance for state charters. “This arraignment has served the credit union movement well, providing strength and innovation out of competition.”
For the next ten years (1985-1995) as Director of Programs Mike continued the critical administrative and policy priorities that Callahan had implemented. These included an annual exam cycle, total transparency of performance, expense control. the CLF’s expansion to every credit union and promoting the uniqueness of the credit union system.
In the years he led the Office, failures caused the downfall of the FSLIC and the separate S&L industry, the initial bankruptcy and refunding of the FDIC and ongoing economic cycles. However credit unions and the funds NCUA managed continued their steady progress. Growth in credit union service and members expanded across the country.
In May 2023 post I wrote about the dangerous goal of NCUA’s goal of seeking parity with other regulators. He commented: Outstanding article. Thanks for laying out so clearly. It’s hard to get into the nuts and bolts but somehow NCUA’s operating costs needs to be reduced, fewer administrators and more hands on folks.
He also had a dry sense of humor with an affable southern temperament.
I recall his moderating a GAC panel of two former NCUA Chairs, Ed Callahan and Senator Jepsen. He led a revealing conversation with charm and wit. If someone has a cassette tape of this session, it would be illuminating to hear how Mike navigated the discussion of these two leaders.
People liked Mike. His colleagues were family. Lori and he would hold an open house every Christmas inviting both NCUA and credit union friends.
After leaving NCUA in the mid 1990’s, Mike worked with Callahan and Associates and then on his own as a consultant. He was a Trustee of the TCU mutual funds family.
Mike wrote about current credit union events in this complete post in April 2023. He was concerned about worrisome trends in credit unions leading to their “creative destruction.” He draws from his early years as an examiner overseeing 30-40 credit unions. He closes with this observation on mergers:
This ongoing march continues. The merger of two sound credit unions without some legitimate reason doesn’t seem to be member oriented. I still think of the members of those small credit unions who received services such as buying a washer that no one else would do.
Bigger is not better if the member does not benefit. How many of these mergers produce lower loan rates , higher dividends, or distinctly better products at a lower price? Carried to the extreme we will be left with 20 credit unions that are no different than large banks.
(and on NCUA’s role)
Schumpeter opined “If someone wants to commit suicide, it is a good thing if a doctor is present.”
A service of celebration and resurrection will be held on Saturday, February 10, 2024, at St. Luke’s United Methodist Church (UMC) at 304 South Talbot Street, St. Michaels, MD.
The family will welcome friends and relatives at St. Luke’s UMC from 11:00 AM to 12:00 PM, which will be one hour prior to the service at 12:00 PM.In lieu of flowers, memorial contributions may be made to Habitat for Humanity Choptank, Salvation Army, St. Luke’s UMC, or Talbot Humane.
First real snowfall in over two years onTuesday. Continuing this morning. Silent and cold.
Suppose we did our work
like the snow, quietly, quietly.
Leaving nothing out.
— Wendell Berry, from his collection, Leavings, 2010
My reindeer topiary enjoying winter.
The Christmas wreath with all of its seasonal coloring.
Our black dragon evergreen stands tall in the snow.
An indoors chrysanthemum looks out on the new wintery scene.
A picture to remember next summer.
A Japanese snow lantern fully realized.
Happy sledding or just sitting quietly by the fireplace.
Martin Luther King, Jr made many memorable speeches.
One I find most compelling is from December 5, 1957. In this long address (later transcribed) to the Second Annual Institute on Nonviolence and Social Change at Holt Street Baptist Church, in Montgomery, Alabama are the seeds of much of his later actions and rhetoric.
He combines humor with logic in addressing the assembly.
“I’m grateful to these ministers of the gospel. I look about here and I see them. They are not Baptists; they are not Methodists; they are not Presbyterians; they are not Episcopalians; they are not Lutherans—they are Christians first, and Baptists, Lutherans, Presbyterians and all of that second.
They realize that we are all one in this struggle for freedom, and we have been able to come together and forget about our denominations. You see, these things can so easily divide us. And the thing I like about the God that we worship is that He isn’t a Baptist; I like that about Him. I would be confused if God was a Baptist. I’m happy that God isn’t a Methodist. He would be arguing over whether you should be sprinkled or immersed. I’m glad of that. And we have come to see in our own struggle here, that there is a unity, there is a oneness.”
“I don’t want to talk too long tonight, but I want to talk to you about something very practical, nothing profound. . . Don’t look at your watch there, Brother Binion; we’re just getting started. He’s looking at his watch. I’m just getting started. Give me, give me a little break.”
After more humor describing reactions to other speeches, he goes to his purpose this evening, which I summarize as a primer on self-help:
“This evening, I’m not going to say anything about the role of the church; I’m not going to discuss the role of the federal government; I’m not going to discuss the role of white liberals, North and South. I just want to talk with you about some things that we must do, as Negroes. We must realize that there is something that we can do to bring this new order into being.”
He proceeds for 30-40 paragraphs with concrete examples and explicit statements for what Negroes, or any American, must do to achieve equality. At one point he talks about money and economic power:
“The average Negro wage earner today makes four times more than the average Negro wage earner of 1940. The annual income of the Negro is now at about seventeen billion dollars a year, more than the annual income of Canada, and more than all of the exports of the United States. We’ve come a long, long way.
“Now, what are we going to do with this? That’s the question. What are we going to spend this money for? Are we going to pool it in cooperative enterprises that will make for economic security for the race? Or are we going to waste it with meaningless things? That’s the question.”
King challenges with words, instances and rhetoric that resonate today. He closes with what it means to be a leader of a movement. His description is relevant to all in current positions of responsibility.
“we must develop intelligent, courageous and dedicated leadership. This is no day for the rabble rouser, whether he be Negro or white. We are grappling now with one of the most pressing and weighty social problems of the generation, and in the midst of such a weighty social problem, there is no place for misguided emotionalism. We must avoid the extremes of hotheadedness and Uncle Tomism, and somewhere develop the type of leadership to see the issues and that will move on calmly in the midst of strife-torn situations.
Leaders are needed all over this South, in every community, all over this nation: intelligent, courageous, dedicated leadership. Not leaders in love with money, but in love with justice. Not leaders in love with publicity, but in love with humanity.
I know if you’re a leader, you’re going to have to have money to live like everybody else. If you’re a leader and you are in a situation that has the spotlight of the world, you will inevitably get some publicity. But these things must be incidental to the greater end. We must have in this hour leaders who are dedicated to the cause of freedom and justice, who have the love of humanity in their hearts.”
This was in 1957. Many of his ideas are presented with rhetorical phrases we often identify with later and more public occasions.
King’s vision for America was formed by many personal experiences and study. His gift was presenting it in a way that is both timeless and timely. That is what leaders do. It is needed now more than ever.
You’ve undoubtedly read about the northeaster which dropped a winter rainstorm on our area two days ago.
My trusty high-tech rain gage said it left between 5 and 6 inches in 12 hours.
And so we had to build barriers to keep the garage dry. It worked, mostly. Towels recovering outside today.
But the flowers think it is just an early spring rain, especially the daffodils.
The miniature Nandina (heavenly bamboo) continues to produce its bright red winter berries.
And the Scottish heather thinks winter is over and is beginning to bloom.
Just another scene from the global warming play.
“Sailors take warning.”
A foot of white snow later turned to slush.
Excerpts from two perspectives for sustaining success as we head into the New Year.
“All social entities or movements need dreams, which can be defined as an indispensable capacity to envision a future for themselves that considers both the practical means at hand and a higher ideal. Societies that do not dream are doomed to die.
“We have no knowledge of any human community where men do fail to dream,” writes Irving Kristol. “Which is to say, we know of no human community whose members do not have a vision of perfection—a vision in which the frustrations inherent in our human condition are annulled and transcended.”*
Source: *Kristol, Two Cheers for Capitalism, pg 153
JPMorgan’s $4 Trillion Balance Sheet Widens Lead Over Rivals – Firm has added the equivalent of one Wells Fargo since financial crisis
“As the spring bloodbath among regional banks began, nervous depositors with more than $50 billion began showing up at JPMorgan’s door. Bank executives went on to raise expectations for net interest income four times throughout the year, eventually pulling in so much cash that managers have taken to warning of “over-earning.”
“That’s put JPMorgan on track for the biggest annual profit in the history of American banking. Analysts predict that by the end of this month, its annual net income will be 36% higher than last year.
“By comparison, the combined earnings of the next five largest banks looks to be about 1%. For JPMorgan and its chief executive, Jamie Dimon, it was a year like no other.” (Source: Bloomberg, December 27, 2023)
As we turn the calendar’s page, which approach will be your credit union’s priority?
Just released and streaming on Netflix is a movie The Bank of Dave. Set in Burnley in the north of England, it is the story of a local van seller who sought the first new banking license to be issued in 150 years in the UK. It is a contemporary version of Frank Capra’s It’s a Wonderful Life.
Dave’s intent is “not about me making money” but creating jobs and the quality of life for the whole community. Profits will go to charity.
For the Financial Regulatory Board, the question is not can it succeed, but rather should it exist?
All the incumbents want to preserve the status quo where a few, large “financial supermarkets” dominate the economy. Dave’s local proposal is not the “right sized bank.”
Dave must overcome established bureaucratic opposition, a very high capital requirement (twelve million pounds) and entrenched scepticism that a new financial model is necessary.
You can read the status of his efforts today in this article about the movie, Dave Fishwick’s life and his ongoing campaign.
Although he faced resistance at every step, Dave eventually made good on his dream, opening Burnley Savings and Loans in 2011, and using “Bank on Dave!” as the company’s slogan.
Dave in life and in the film is a pillar of the community. His dream is political, not just financial. Banking should not be reserved for the rich and powerful. Rather in a community, it is the ordinary people who define what that institution should be.
His goal is to have a bank that “looks after the community.” He wants a better way, than the current system, of helping each other where and how we can. That is Dave’s vision of what community is about.
The parallels with the credit union story are many. This includes the entrenched resistance to new charters and the ever present temptation to leave behind those that created the institutions which dominate markets today.
The Bank of Dave is a timeless story about money and who gets to control its use and distribution. It is a reminder that financial institutions are built first on trust in the people who lead them.
When that trust and connection is lacking, then others will move to fill the needs that are no longer served.
If you still need convincing about the Dave’s of this world, here is an interview with this real Dave.