(from Jim Blaine)
Are You A Cowardly Lion…?
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The principal difference between a manager and a leader?
Courage.
(Originally posted May 9, 2015)
The Best Sermon in Life Is the One You Live
(from Jim Blaine)
Fred Byrd 
Fred Byrd has passed away at the age of 87. Fred Byrd started out life as one of eight children, son of a hardscrabble sharecropper in rural Hoke County, North Carolina. The funeral was held Saturday at Rock Springs Missionary Baptist Church – standing room only.
Might say that 70 or 80 years ago in the rural South, that the “odds for success” were not exactly stacked in Fred Byrd’s favor; but Fred Byrd was a remarkable man. Loved by many, admired and respected by all.
Fred Byrd was faithful in his mission in life to his five children, his church, his extended family reunion association, his friends and to his work. Those things Fred touched with his life were always improved; he wasn’t always necessarily the leader, but he was always in-charge. The Minister said one of Fred’s favorite pastimes was talking. Fred was plain-spoken and freely shared his thoughts and opinions with others – whether you were ready or not! With Fred Byrd, you didn’t have to wonder what he thought or felt. Fred didn’t shirk his responsibility “to counsel” you when you needed it. The Minister said Fred even counseled him on his sermons: “Keep it simple and, most importantly, don’t take all day!”
Fred Byrd counseled me often over the years; it was always advice well worth getting. I distinctly remember our “first session”….
You probably need to know that Fred Byrd’s career was as the supervisor of housekeeping at a very large, state-operated mental hospital in Raleigh. A challenging task with numerous employees, 3-shifts, 7x24x365 operations in an environment which required not only great skill, but also great flexibility, discretion and compassion. Fred Byrd was definitely the right man for the job; he cared about everything. Fred took his work, his life very, very personally.
But Fred Byrd, true to his roots, also worked a second job at the CU keeping our house in order. One evening Fred dropped by the office and said: “Mr. Blaine (I immediately knew I was in trouble!), could I speak with you a moment about the trash?” You want to “talk trash” to me Fred? “That’s not what I said! I don’t want to talk trash to you; I want to talk about your trash!”(This was really not looking good…)
Fred told me that he knew that I brought in fast food for lunch everyday and ate in the office. Fred was into GPS tracking long before the technology was invented! He noted that the bag and remaining cup of ice from the soft drink ended up in the trashcan nearby. Fred pointed out that by the end of the day that the ice had melted and created quite a problem and a mess for his folks. Fred said softly that he was sure that this was just an oversight and something that had never occurred to me (and it hadn’t); and would I mind emptying out the ice in a sink before discarding it? Fred was looking me dead in the eyes as he “counseled” me. And then he made the lesson stick:
“Mr Blaine, there is no reason, there can be no justification for any of us to make life purposefully more difficult for someone else.”
In life, I have received no finer “counsel”.
In closing the funeral, as the casket was rolled down the aisle to the strains of “I’ll Fly Away”, the Minister had one final thought about the man Fred Byrd:
“Your best sermon in life is the one you live…”
Amen, Brother Fred…. and thank you, …
Thank you for your “sermon”.
On Ukraine
At the entrance to the memorial park in Kyiv, there is a sculpture of an extremely thin girl with a very sad look holding a handful of wheat ears in her hands. Behind her back is the Candle of Remembrance, a monument with details reminiscent of authentic embroidery that can be found on traditional Ukrainian costumes. This is a monument that commemorates a historical event known as the Holodomor.
What is the Holodomor?
After the end of the First World War, Ukraine was an independent state, but in 1919 the Soviet Union “sucked” it into the community of Soviet states. The Ukrainians, who even then considered themselves a Central European people like the Poles and not an Eastern European like the Russians, tried to restore Ukraine’s independence.
In 1932, not wanting to lose control of Europe’s main granary, Stalin resorted to one of the most heinous forms of terror against one nation. In the process of nationalization, he took away the grain-producing land from the Ukrainian peasants, but also all its offerings, thus creating an artificial famine.
The goal was to “teach Ukrainians to be smart” so that they would no longer oppose official Moscow. Thus the people who produced the most grain in Europe were left without a crumb of bread. The peak of the Holodomor was in the spring of 1933. In Ukraine at that time, 17 people died of hunger every minute, more than 1,000 every hour, and almost 24,500 every day! People were literally starving to death in the streets.
Stalin settled the Russian population in the emptied Ukrainian villages. During the next census, there was a large shortage of population. Therefore, the Soviet government annulled the census, destroyed the census documents, and the enumerators were shot or sent to the gulag, in order to completely hide the truth.
World War. Their poison gas was hunger. Their Hitler was Stalin. Their Holocaust was the Holodomor. For them, fascist Berlin was Soviet Moscow, and their concentration camp was the Soviet Union.
Today, 28 countries around the world present the Holodomor as genocide against Ukrainians, which you could not learn about in school, because almost all evidence was destroyed and victims were covered up for decades, survivors were forcibly silenced by not having the right to vote until recently.
The Holodomor at that time broke the Ukrainian resistance, but it made the desire for Ukraine’s independence from Russia eternal. (I was sent this summary and do not know the source.)
From the Encyclopedia Britannica:
Holodomor, man-made famine that convulsed the Soviet republic of Ukraine from 1932 to 1933, peaking in the late spring of 1933. It was part of a broader Soviet famine (1931–34) that also caused mass starvation in the grain-growing regions of Soviet Russia and Kazakhstan. The Ukrainian famine, however, was made deadlier by a series of political decrees and decisions that were aimed mostly or only at Ukraine. In acknowledgement of its scale, the famine of 1932–33 is often called the Holodomor, a term derived from the Ukrainian words for hunger (holod) and extermination (mor).
Postscript:
From Brooke C. Stoddard, author who was at Holodomor Wreath Presentation at the Holodomor Memorial near the U. S. Capitol. He was asked by the Illinois State Society to participate on behalf of the Cleveland Club of Washington, D. C.
The Holodomor Memorial to Victims of the Ukrainian Famine-Genocide of 1932–1933 was opened in Washington, D.C., United States, on November 7, 2015. Congress approved creation of the Holodomor Memorial in 2006.
A New Generation of Members from High School Branches
Yesterday’s blog described an effort to open two student branches in 1974 in Burbank California. Their purpose was twofold: expand the credit union’s FOM and educate students about the credit union model. The effort ended in 2011.
However high school student-run branches continue today. CUSO Magazine recently wrote about an example in Texas that is especially successful. Here are some brief excerpts from that article:
The Credit Union of Texas’s SMART Branch
The Credit Union of Texas (CUTX), located in Dallas-Fort Worth, recognized the significant gap in financial literacy among young people and decided to make a difference. In an effort to bring financial education to students, they connected with leaders of local high schools, creating partnerships through which they could collaborate to tackle the issue at hand. Through their motivation to increase financial literacy among youths, the credit union and its partners came up with the idea to open branches within local high schools and let the students take the reins.
These “SMART” (Servant leadership, Motivation, Active learning, Reasoning, and Technology) Branches are run by juniors and seniors, with one credit union staff member to supervise. The first, located in Allen High School in Dallas-Fort Worth, was opened back in August 2021, the success of which inspired the creation of a second branch merely a year later, which opened on January 10th, 2022, at Little Elm High School of Little Elm, Texas. . .
Students helping students
In order to achieve widespread financial literacy in the school, CUTX developed a financial literacy program that involves student employees of the branch acting as financial literacy coaches to their classmates. In preparing for their presentations, students employees are provided with additional education on the topics, including money management, loans, credit, investing, and more. CUTX permanent employees also provide informative sessions on various topics, including home equity loans, refinancing, and auto loans to Little Elm High School faculty and staff. . .
The full article can be found here.
The GAPS In High School Financial Education Courses
In 2022, only 22.2% of high school students are required to take a personal financial course.
Three states have a 100% course requirement. These are Mississippi, Missouri and Virginia. Florida has one of the lowest participation rates but has begun implementing a state wide requirement.
Outside of the six states with near fully implemented requirements, only 9.3% of students in America have guaranteed access to a financial education course.
This data is from an article in Visual Capitalist, published on May 17, 2022.
What is Financial Education?
Course work can range from the very practical tasks of managing a checking and savings account, to subjects such as budgeting, differences in stocks and bonds, and even understanding the filing of taxes.
Credit unions were founded with education as a core value. Financial education is key to financial literacy. A lack of financial literacy is a major factor in delinquency and low credit scores.
Credit unions, especially those serving schools, have pioneered classes for adult education. Many offer accounts for children of family members. Education credit unions have established student branches as a means of giving students hands on practice with real money transactions.
Need and Coop Capability Align
Credit unions, especially those serving schools, have pioneered classes for financial education. Many offer accounts for children of family members. Education credit unions have established student branches as a means of giving students hands on practice with real money transactions.
The article’s graphic and data clearly show there is much to be done. This is an ever-present student need and a credit union skill. Expanding access to financial education is a legislative priority with 48 bills pending in 18 states.
Moreover, adults support this school-based effort as statistics suggest that up to a third of parents never discuss personal finances with their children. Many parents wish they had been required to take a course themselves.
Becoming a resource for high school classes on financial education is an example of cooperative priorities visible to the next generation of members who are essential to sustaining the movement.
If you have examples to share, I would like to provide these stories in later posts.
Spring Storms
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Met Opera Benefit Concert: Music for Ukraine-March 14
Listen Monday, March 14th, at 8pm.
Program notes courtesy of the Metropolitan Opera.
Click here for the upcoming Metropolitan Opera broadcast schedule.
The Metropolitan Opera presents a special live international broadcast on Monday, March 14: A Concert for Ukraine, a performance offering support and solidarity with the citizens of Ukraine. Met Music director Yannick Nézet-Séguin will conduct the Met Orchestra and Chorus and a roster of star soloists – Lise Davidsen, Elza van den Heever, Jamie Barton, Piotr Beczała, and Ryan Speedo Green – in a program that includes Strauss’s Four Last Songs, the stirring final movement of Beethoven’s Ninth Symphony, and works by Barber, Silvestrov, and Verdi. Vladyslav Buialskyi, the Ukrainian bass-baritone who recently made his company debut, will open the concert with the Met chorus in a rendition of the Ukrainian National Anthem.
Four Members Hold Press Conference Today at Noon
The four members profiled in my blog The Fix is In, will hold a press conference today, March 11, at noon.
Press Conference: Friday, March 11th at 12pm EST
Zoom Link: https://us02web.zoom.us/j/89039053221?pwd=bDRwOERTYWFlQ29mckl4aVlqWS9qZz09
A Pivotal Week for the Credit Union System’s Future
On Thursday, December 16, the NCUA board will meet to decide a slate of issues that will affect the credit union system for years to come, not just 2022.
The most consequential item is the proposal to approve and implement an entirely new RBC/CCULR capital regulation.
Tomorrow I will share one expert’s analysis of the capital adequacy of credit unions since 2008. All the numbers use NCUA and FDIC information.
The data, stress tests and bank comparisons demonstrate that credit unions created and maintained more than sufficient capital during the two most recent crisis, and the unprecedented growth in shares in 2020-2021.
The numbers are tested against actual data. They clearly document credit union’s superior loan loss record versus banks.
The analysis poses the core issue: How does changing a tried, tested and proven system of capital sufficiency improve safety and soundness? The rule provides no evidence that it would have in the past, or will in the future.
In fact the outcome is likely to be just the opposite.
If RBC/CCULR rule is implemented in any form, it will place a regulatory burden on credit unions that will be greater than any other rule ever passed. Every credit union over $400 million (approaching the $500 million complex threshold) and above will have to maintain two different capital calculations under CCULR/RBC. This occurs no matter which new standard a credit union might wish to follow. For it will have to constantly monitor which is most advantageous for its circumstances.
Cross industry comparisons will become at best confused and at worst completely useless. How do you compare a CCULR reporting credit union with one who has adopted the RBC approach with 8% net worth but a 19.5% RBC compliant ratio.
This new burden will fall directly on the members. Members across the board will lose value for a rule that has no objective validation.
Budgets: Approving Spending Years into the Future
NCUA’s budget has a procedural flaw. Estimates for the next year’s budgets are based on prior year’s budgets, not expenditures or what was actually needed. Therefore assumptions are carried forward, regardless of whether the circumstances justifying prior year’s requests still exist.
For example one of the budget explanations is a charge to the CLF as follows:
“total NCUA staffing includes five FTEs funded by the Central Liquidity Facility in 2022”
The CLF has not made a loan in over ten years. Why should there be a need for any full time staff for an organization that only manages a billion or more of credit union shares but has never developed a single program or made a loan to assist the credit union system for more than a decade?
Once a position is approved, it never goes away.
NCUA’s budget process is designed to justify spending rather than evaluate whether more resources are actually necessary to do the jobs at hand.
The major budget decisions include:
- Increasing millions in additional spending charged to three funds plus capital spending;
- Adding up to 48 new positions in addition to the seven approved at midyear;
- Approving an allocation of NCUA overhead to the NCUSIF. Will it be based on the percentage of insured savings in state charters or some arbitrary number adjusted year to year without objective validation?
- Setting the normal operating level (NOL) for the NCUSIF.
The question for the board is whether to direct staff to better manage the resources on hand or continue growing budgets unrelated to actual outcomes and efforts.
Each of these decisions will have significant impact in future years. Will the NCUA board stop practices that are disconnected from actual facts and analysis, or will it just kick the can down the road?
Needed: More Inter-coop Marketing Alliances
A response to my post last week on Marketing: A Critical Credit Union Advantage promoted a broader view of the situation.
Leo Sammallahti, Marketing Manager for the Coop Exchange in Finland suggested a different framework. Specifically he believes coops serve individuals who would have a natural interest in knowing about other cooperatively owned business. Here is his idea.
I’m not familiar enough about credit union marketing in the US, but have some thoughts more generally about marketing within coops.
I recently talked with a friend who helps run a food co-op. He mentioned that they have 2000 people on their email list. A while later, another friend told me about a retrofitting (housing) coop that is raising money through an equity crowdfunding campaign. The UK has a special financial instrument called “community shares” tailored for coops to raise capital through crowdfunding.
I believe there is an opportunity for a simple website with a directory of coops (in communities or a state) that want to promote other coops through their email lists. I sent a survey to 10 small and medium sized (SME) coops asking if they would like to promote other coops in their email list. Every single one of them said yes.
This interest caused me to realize this is an advantage coops have in marketing – coops (at least small and medium sized coops) want to promote each other.
Had I sent a survey to traditional publicly owned stock owned firms asking if they would like to promote other businesses because those businesses have stockholders, they would have found the question absurd, “Why would I do that?”
My suggestion is that the platform allow co-ops to make different type of arrangements to promote each other in their email lists. They can set up cross-promotions (I promote you if you promote me) and “cross promotional circles”–I promote another co-op every month in my email list and my co-op gets promoted in another co-ops email list every month. In addition, they can require the coop to put out a coupon code or some similar special offer for them to promote.
What’s the relevance to credit unions in the US? Not sure, yet. But if we create an ecosystem of many coops promoting each other, that can be powerful for credit unions as well. The US credit union movement has over 100 million members. Credit unions communicate via newsletter or social media regularly.
If they would systematically promote other coops in their messaging, and other coops would systematically promote credit unions, this could a create virtuous cycle.
From the point of view of a customer, when they become a customer of one coop and receive their communications, those would include promotions of other coops. As a result, they learn about other coop possibilities and could become patrons.
This effort could be more even more practical if regulations that limit investing in coops and promoting such investment opportunities were more encouraging.
Once the market for coop financial funding in an area reaches a critical mass, it could possibly lead to common funds that enable ordinary people to make recurring, low-cost, passive, diversified investments across small and medium sized coops.
This community investment evolution is being developed in the UK and could be a model for the US. Here is a recent report: Understanding a maturing community shares market – new report | Co-operatives UK