Schools will no longer have to declare “snow days” for students. Instead they will just convert to “Zoom days.”
And summer recesses can start right on time, as scheduled.
Virtual Insight from Alexa
Amazon’s oral concierge speaker, Alexa, is a ready source for all kinds of factual information. I can ask the time, weather, latest news or sports scores, and even call up blog podcasts. Recently I added a subscription to play any kind of music imaginable, from “calming classical choruses” to John Denver or Taylor Swift’s entire catalogue.
As with all forms of virtual interaction, one presumes the creators are always striving to improve responsiveness through artificial intelligence (AI) programmed learning.
This means Alexa’s “knowledge” is more than being a verbal avatar for a Google inquiry. One can ask Alexa to tell jokes or ask what kind of day “she-it” is having. A seeming dialogue is underway.
Alexa and the Presidential Election
So, I decided to query whether Alexa had a preference in the upcoming election.
Q: Alexa, who will you vote for in the upcoming Presidential election?
A: Well frankly, I don’t think bots should influence elections.
I don’t know your reaction to this response. But the three words that struck me as significant were “I don’t think.” This is just a negative way of saying: “I think bots should not be. . .”
My query now is how or who is doing Alexa’s thinking?
Leading by Example
From an early age, one learns that actions speak louder than words. This observation applies to institutional behavior as well as individuals.
NCUA Recognizing Credit Union Growth
A regulatory example supporting cooperative expansion is from the NCUA’s 1978 Annual Report (pgs. 26-27) under the Chartering heading:
“During 1978 , 348 new federal charters were issued. The combined potential membership of newly chartered FCU’s in 1978 was 1,081,953 persons. Most (225) new Federal charters were issued to credit unions serving occupational fields of membership . . .approximately 47% of the new charters were issued to groups in five state—Pennsylvania for 46; New York, 45; New Jersey 30; California, 22; and Texas 22. “
Propelling These New Chartering Successes (pg. 27)
“Under the Administrator’s Organizer’s Recognition Program, the Administrator (NCUA Chair) recognized the efforts of volunteers, trade association representatives and NCUA staff members for organizing new Federal credit unions. During the year 117 awards were issued under the provision of this program. Twenty-three certificates of were issued for fifth charters, 10 certificates were issued for tenth charters, and two special certificates for 25th charters. The remainder of awards (82) were given for first charters.”
Honoring Credit Unions Serving Family Members (pg. 27)
“In mid 1977 A Family Service Award Program was established to recognize those Federal credit unions that actively seek to provide financial services to all eligible family members. A total of 107 Federal credit unions received the Family Service Award in 1978.”
Supporting Cooperative Outcomes
Leading by example is harder than issuing new rules or pronouncements about expected performance. Leadership by example requires transparency and provides public accountability.
Imagine how those NCUA, League, and credit union employees must have felt about their personal recognition. And how others might aspire for the same. The awards confirmed the priority and value of these individual and institutional efforts. They celebrated important progress in the cooperative model’s expansion.
The question from these examples: How is NCUA recognizing cooperative achievements today?
Tracking FDIC’s Insured Deposit Trends in Your Market
Once per year using June 30 data, the FDIC publishes the total deposits per branch for every bank.
This Summary of Deposits (SOD) report includes an easily searchable database that enables any user to find the totals by any market segment: city, SMSA, county, ZIP code or state.
The tool can be accessed from the FDIC website.
Grand Rapids, MI, FDIC Insured Deposit Report for June 30, 2020
I tested the program by searching all FDIC branches for the city of Grand Rapids.
The repost lists the 22 FDIC insured institutions serving the market in order of deposits. These total $15.4 billion in the 102 branches in the city.
Fifth Third Bank, Ohio headquartered, leads with a 26.5% market share. Seven banks have only one branch in Grand Rapids, all with less than $100 million in deposits.
Where Can I Get Credit Union Data?
For almost a decade Callahan has combined this annual FDIC report with credit union data. This Branch Analyzer database shows all the branches in a selected market. More importantly the analysis provides two year trends in the defined market, changes in market share by institution and even maps showing the geographic layout for all the branches.
Credit unions do not file a branch deposit report like the FDIC. Callahan’s searchable program approximates the deposits at each credit union branch by dividing a credit union’s total shares at June 30 by its number of branches.
The latest edition of Branch Analyzer can be found here: https://www.callahan.com/market-analysis/
“Naming Rights” for Chapter V of The Credit Union Story
Winston Churchill wrote: “The farther backward you can look, the farther forward you are likely to see.”
American credit union history covers almost five generations. The first four “eras” shown below established the modern credit union system. Each had a distinct theme. The amazing growth, and decline, of active charters is described on the bar graph.
What is the Current Era?
If the fourth chapter ended in 2008, credit unions are now halfway through the next part of their story. What will be the dominant theme from this generation of credit union leaders?
Some of the events so far are noted at right. COVID and related social crisis should certainly be added to this list.
How would you characterize the industry’s status at this interim stage? Some ideas might be:
- Consolidation, Concentration and Competition
- Regulatory Backlash
- Membership Passes the Century Mark
- The CUSO Era
- Maturing Coop Model Seeks New Growth Curve
- Etc.
The Value of Perspective
Seeing present day priorities through the lens of the past, can highlight what future outcomes might be.
The outlook of many of today’s leaders has been shaped by the 2008/2009 financial crisis. This interrupted the momentum and confidence from a generation that mined the benefits of deregulation for members.
The current crisis is the second in a decade to engulf members. Can credit unions be masters of their destiny or morph into just another financial option?
Churchill also remarked: “History will be kind to me for I intend to write it.”
Naming the current era is one way credit unions can shape their history. Please send your suggestions for the title of the chapter we are creating now.
Timeless Wisdom: Small Is (Or Can Be) Beautiful
“Folks only jump if the oil platform is on fire. In other words, we are all incrementalists unless and only if we feel the flames licking at our backs. Then it is too late. If the small [credit unions] are just small, as most of us are, how do we turn that smallness into a strategic advantage — with real tactics attached? . . . Small connotes attributes other than just small. Small is (or can be) faster. Small is (or can be) more intimate with members. Small is (or can be) more urgent. Small is (or can be) higher risk takers. Small is (or can be) more personal.”
– A CUSO manager, February 2018
Manufacturing’s Future in the US
Sometimes (or often) political rhetoric is divorced from fact. One issue in the Presidential campaign is increasing American manufacturing. And hopefully jobs for tasks that cannot be automated.
The chart below shows that US auto production has declined 41% between 2014 and 2019. America’s share of global car production is 3.7%.
In auto production, manufacturing is a global factory system. Following the government bailout of the industry after the Great Recession, the peak of direct employment has ranged between 900,000 to 1 million jobs.
Given the underlying market trends, it is hard to see significant job growth in this sector.
The takeaway for credit unions and members dependent on this sector is to know your options and develop them. Market forces are impersonal and uncaring. That is why cooperative alternatives were created.
(Note: chart reflects total number of cars manufactured, not their market value)
International Organization of Motor Vehicle Manufacturers, founded 1919 in Paris, is an international trade association whose members are 39 national automotive industry trade associations.
Credit Union Leadership in a Prior Crisis
Timeless Wisdom: “You Can Join”
Here is an article from 2002 that I find is still relevant today.
Callahan Wants A ‘Secret’ Shared
(Source: Credit Union Journal. Laura Ortiz, Midwest Correspondent, September 16, 2002)
He’s probably said it a million times: “Credit unions are the best kept secret in the world.”
And Ed Callahan repeated that mantra in a farewell speech, of sorts, to NASCUS during its 37th Annual Convention and Symposium here. Callahan, CEO of Patelco Credit Union in San Francisco, former chairman of NCUA and co- founder of the Washington, D.C.-consulting firm that still carries his name, plans to retire by year-end.
But, in his booming, forthright manner, the message came across with new passion and perhaps, frustration.
“If the membership continues to grow, our jobs are that much more secure,” he said. “Our only goal is to serve Americans.”
Among his suggestions to move the industry along was to expand shared branching to a national level.
“Our members are eternally grateful when they can walk into a branch.”
Wouldn’t it be nice, he said, if they could walk into any branch in the United States and take care of their financial business?
“If cooperatives work together, we can have 30,000-a minimum of 30,000-locations available to them,” he said. “What other financial institution on the planet can do that?”
Callahan added that there is no reason anyone in America shouldn’t belong to a credit union. So, why don’t they?
“They don’t know anything about us,” he shouted. “We’re the best kept secret in the world.”
His advice on how to get the message out:
“Get some butcher paper and put it across the credit union,” he said, recalling his early days when such simple signage was used to advertise such things as “Bread: five cents a loaf.”
“Put your credit union’s rates on common shares and CDs on that butcher paper,” he said. “Underneath that, put Bank of America or Wells Fargo (or the for-profit competition in your area) on there with their rates. And, for God’s sake, put ‘You Can Join.”
The Mark of Leadership
Great leaders’ contributions are not always found in the answers they give. Their most important insights may be framing the essential questions to be asked.
In this respect Ruth Bader Ginsburg (1933-2020) provided us a thoughtful legacy. One of her enduring queries was:
“Who will take responsibility for raising the next generation?”
Practicality, dealing with present circumstances, dominates most of America’s economically focused society. The future, well that’s for others to manage. Her question challenges each of us to consider not merely what we do today, but also how our priorities will be viewed 25 years from now. Or in credit union terminology, what are we “paying forward” for future members?