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The Roots and Legacy of a Credit Union Leader

Recently I was contacted through this blog for information about Ed Callahan’s career as a high school coach, educator and administrator.

The writer was Kevin Patrowsky who is a Wisconsin high school football historian living in Milwaukee.   He wanted to add information about Ed Callahan’s tenure as a teacher and coach at Don Bosco High School.  His blog is Wi Hi Football | History of Wisconsin High School Football.

This week he posted his account of Don Bosco’s success as the Milwaukee Catholic Conference mid-1960’s powerhouse.  The following is his excerpt describing Ed’s tenure at Don Bosco and move to a new program at Boylan Catholic High School in Rockford, Illinois.

Callahan’s Career as a Coach, Teacher and School Administrator

“Coach DanFleming’s replacement at Don Bosco was Edgar “Ed” Callahan who spent five seasons as the head coach, 1955-59 going 28-12-1. Don Bosco had a 7-1-1 season in his initial season of 1955 and then a 7-1-0 year in 1957. They finished second in the Catholic those two years and in the middle of the pack the other three going 4-4-0 in 1956 and 5-3-0 in each of the 1958 and 1959 seasons.

“For coach Ed Callahan, his story is much more widely known than his predecessor. Born in 1929 in Youngstown, Ohio he attended Ursuline High School where he was a very good tackle. Standing 6’1, weighing 225, Callahan graduated in 1946. He was offered many scholarships, but he chose Marquette because he wanted to go to a Catholic Jesuit University.

“Graduating in 1951 with a B.A. in mathematics, Ed stayed on to get a Master’s Degree in Educational Administration in 1952. He then went to Don Bosco as a math teacher and an assistant coach for football and basketball, before replacing Dan Fleming as the top football man. A very principled man with high integrity he was, to say the least, a man that others thought highly of.

“In 1960 he was recruited by a new school in Rockford Illinois to start the football and basketball program at Boylan Catholic High School which opened that year. In 1966 Don Bosco played Rockford Boylan and the Don’s beat the Titan’s 26-25. Ed stayed as the football and basketball coach plus the head of the math department until 1970 when he became the school’s principal.

“In 1971 he took the job as superintendent of the Rockford Area Catholic Schools and stayed until 1975. Because Ed had a reputation as a very trustful and effective administrator, he was asked by the State of Illinois to become the Assistant Secretary of State. Shortly thereafter in 1987, the Governor appointed him Director of Financial Institutions for the state of Illinois.

“Ed and several of his assistants inherited a floundering department and set the ship right to serve the state’s financial institutions including credit unions. A life-long Democrat, Ed caught the attention of Republican President Ronald Reagan who, in 1981, asked him to serve as Chairman of the National Credit Union Administration (NCUA).

“This Washington DC-based federal government organization had been recently reorganized as an independent regulatory agency during the Carter administration.  In 1981 when Ed assumed this position, the the country was in the midst great economic uncertainty and deregulation was affecting all financial institutions.  The new agency was transitioning from its prior function as a bureau within HEW.

“Ed left in 1985 and started his own company, Callahan and Associates, Inc. which became the leading provider of financial data to credit unions in the United States. He served in several other positions before retiring in 2002 and then passing in 2009.”

The Rest of the Story

A blog devoted to high school football would not spend many words on Ed’s next career and multiple contributions to the credit union system.

In February 2003 when receiving the National Credit Union Foundation’s Herb Wegner Lifetime Achievement Award, an introductory film summarized this period of Ed’s professional accomplishments.

To understand Ed’s leadership,  I believe one must be  aware of his initial career as an educator and coach. In these multiple roles in high school education, Ed formed his multiple skills of vision, innovation,  communication  and effective management.

Here is how the Foundation described his legacy for the credit union system in this Lifetime Achievement award.

(https://www.youtube.com/watch?v=DEIymlc8OQ8&t=12s)

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Cooperation on the 4th of July

Washington’s National Cathedral is the site of a free 4th of July concert.  There is always a full house. This year’s program featured an organ duet.  Two players on one organ console.

Four hands for three manual keyboards, four feet for one pedalboard, and a single music sheet.  The Cathedral has video screens on the pillars throughout the sanctuary to provide up close views of the action.

This 1:35 minute video shows the pair playing in the concert finale,  Sousa’s Stars and Stripes Forever.  Note the four feet working the pedals and which player turns the pages.

Cooperation and collaboration in a musical celebration. The audience rises to participate at the end.

(https://youtu.be/zZNGBf2ZSdM)

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The Story of the First De Novo Mutual Bank Charter Since 1973

Next City is a non-profit national news organization focusing on  greater economic, environmental, and social justice in cities.

Its economic correspondent is Oscar Abello who has written several stories on credit union chartering efforts.   The excerpts below are from his description of a new mutual bank which opened in October 2022 and today has $44 million in assets.

This de novo start up is a fascinating story.   It also is a contrast with a very similar credit union effort, Maine Harvest FCU.   The credit union closed after two plus years of operation to become a new department within Five County Credit Union, in Bath, ME.

Here is Oscar’s introduction to his story about this new mutual:

“Banking was social long before it was anything else. Five thousand years ago, on the plains of ancient Mesopotamia, farmers, merchants and artisans conducted business with each other based on credit, with others they trusted as committed members of a community. The earliest writings found are clay tablets on which people essentially kept each others’ tabs. It was something early human beings did as part of surviving as a civilization, or even as a species.

“For all the problems and shortcomings of the U.S. banking system, perhaps the one redeeming quality it ever had was how much it relied (until recently) on local relationships built on trust.

“Fast forward to today. Many things have changed, but can banking still be part of how we address challenges together as a society? Today’s story offers an example that points to yes. Is the banking system supposed to have a social mission in addition to purely financial goals?”

How To Build A Bank To Scale Up Local Food Ecosystems

I was intrigued by Abello’s brief history of the mutual charter and its demise.  An additional takeaway is why it was believed preferable to a credit union for the founders.

It is also the story of Charley Cummings and his wife, who had a vision of creating a new, sustainable, local food system.

They  had found a financing gap in the market and  thought a mutual was the best solution. Excerpts follow.

“That  gap in the market for small- and mid-scale producers and also other value chain participants wasn’t well addressed by farm credit either, like manufacturers, distributors, consumer brands, trade brands,” Cummings says.

To fill in that niche, Cummings landed on a very old solution: a mutual bank. It’s a bank that doesn’t have conventional shareholders. Instead it’s owned and controlled by its depositors, similar to a credit union.

It already has more than a thousand depositors and $44 million in assets, including loans to farmers, organic food production facilities and even a project to build a solar array over a sheep grazing meadow to add some income for the farmer. 

“The reason we’re structured as a mutual is because it’s intended to be permanent,” Cummings says. “The mutual bank model has proven its longevity and the structure gives the impact mission of the (mutual) bank teeth from a governance perspective in a way that shareholder ownership does not.”

A Brief History of Mutuals (excerpt)

Mutual banks emerged as a way for working class or poorer households — often recent immigrants — to pool their savings, earning a modest amount of interest while investing in each others’ homes. They clustered in the northeast because during the 19th and early 20th century it was the country’s most populated region, with new immigrants coming over from Europe in waves. . .

The Federal Deposit Insurance Corporation today lists 427 mutual banks across 43 states, though they’re still largely concentrated geographically in the northeast, Ohio or Illinois. Without the pressure to grow and generate profits for shareholders, mutual banks are mostly smaller institutions focusing on a specific geographic market. 

Why Not a Credit Union?

Cummings did look into starting a credit union, which is a much more common example of a cooperatively-owned and -governed financial institution, but there are a few reasons why it wasn’t quite a fit. Regulators generally don’t allow new credit unions to do commercial lending in their first two or three years. Beyond that, current laws limit credit union business lending to 25% of their loan portfolios unless a majority of their members come from low-income census tracts. These restrictions just didn’t make sense for a new financial institution whose core business was going to be agriculture and food businesses. 

For many decades, banking regulators and policymakers got caught up in an ideological backlash against the mutual bank model, fueled by the idea that all companies including banks were better off putting profits for shareholders above all else.

It took more than the usual amount of convincing just to give Walden Mutual the chance to find startup investors who would be willing to limit their own returns so the bank could retain enough earning.

The Funding Source for the Mutual

It turns out having a clear social mission protected by a mutual structure was a big draw for the growing segment of ESG investors — the acronym is short for “environmental, social and governance.” Walden Mutual was able to, in essence, borrow nearly $25 million for startup capital from investors who know they cannot profit later from selling an ownership stake in the bank.

With an FDIC-insured bank, he says, you have an entity with a lower cost of capital than the government itself. “Our theory of change is that by lowering the cost of capital for these types of farms and businesses, we can really help the ecosystem to grow.”

“There’s nothing more strategically aligned in financial services than saying to a potential depositor, ‘hey, there’s nobody else here, we work for you and in your best interests,’” Cummings says. “Whereas with a shareholder-owned bank, that is not always the case.”

There is much more in the full story which you can read here.

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A “Carmina” Vacation In Blacksburg, VA

No posts last week. Joan and I took a week-long singing vacation with the Berkshire Chorus International.

We rehearsed for a week at Virginia Tech before giving a full orchestra concert of Orff’s Carmina Burana, and a shorter contrasting work by Brahms, Schicksalslied-Song of Destiny.

The week in pictures.

BCI’s Music Director since 1992 and on site producer, Frank Nemhauser.

Our dorm and rehearsals were on the Virginia Tech campus.

Hokie mascot outside the dining hall.

Our conductor for the week, Dr. Jenny Wong, who grew up in Hong Kong and now is Associate Conductor of the Los Angeles Master Choral.   She earned MA and PhD degrees from USC.

The major work for the evening.

Rehearsal in the Moss Center for the performing arts on campus.

Some Blacksburg city arts and activities.  The former National Bank of Blacksburg is now an ice cream parlor.  Sculptures and a scene from the farmer’s market.

Preconcert pep talk by Jenny.  Note all of the “luggage.” She has a seven month old child at home.

Glass Hokie statue.

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A Person Who Lived the Credit Union Mission

 

Yesterday A Celebration of Life  was held for Betina Buscemi.  Two notes from her obituary capture the essence of her special purpose devoted to others.

“Tina was a passionate advocate for equality and human rights. She devoted her time to serving the underserved.

“She has volunteered for countless organizations in the community including Kettering Volunteer Advisory Council, Kettering Cities of Service Committee, Montgomery County Reentry Collaborative, CANE/Collaboration Against Abuse Neglect and Exploitation (Seniors), Dayton Area Chamber of Commerce and several other local Chambers of Commerce. Tina was a mother to two wonderful children.”

Her professional home was as Business Development Manager with Day Air Credit Union where she worked for the past 17 years.

The following is CEO Bill Burke’s tribute sent to all the credit union’s employees. (used with permission)

Bettina

As you know, Bettina Buscemi passed away very late Tuesday afternoon.  Bettina was a remarkable person.  Huge heart.  Irrepressible spirit.  Limitless passion for Day Air Credit Union.  Always a positive, energizing presence.

We are a very tight-knit group here at Day Air.  Losing someone who is an integral part of the team hurts.  Hurts a lot.  Our culture is one of putting people first and we’re all now coming together to support each other.

For now, let’s just think of Bettina and her family (significant other Don Crosthwaite, son John in Columbus, and daughter Annie in New Zealand).  When I spoke with Don, he passed on a statement that Bettina made to him many times – “you have a job but I have a lifestyle.”  He described how much Bettina loved Day Air, its people, its culture and how her position at the Credit Union allowed her to do what she loved most – to contribute to the well-being of the people of our community – to help people.

Face of the Credit Union

Bettina was an integral part of the Day Air team for over 17 years.  As our Business Development Manager, she was the face of the Credit Union to so many in our community (including key member groups, the Dayton Area Chamber of Commerce, at least four other smaller Chambers in the area, city and township administrations where our branches are located, so many non-profits and civic organizations, etc.).

She led the Credit Union’s efforts to support the Montgomery County re-entry program.  I’ll never forget her pitching that idea to me.  At first I thought it was crazy but she had so much conviction about it … turns out we helped a lot of people get back on their feet after serving time.

She was on countless boards including one (the Oasis House, a non-profit that supports women victims of sexual exploitation and trauma), that literally sent her notice of her appointment to that board on Wednesday.

She was laser-like focused on the community in which we live, work and play.  Not only did she serve on so many boards and committees, she constantly promoted Day Air to anyone who would listen to her.  As if she would ever let anyone not listen to her (let that sink in and  smile….).  I can’t remember how many times she referenced her days at 5/3 and Huntington with that smile of hers while shaking her head, then compared that to her time here at Day Air while beaming.

I’m sorry to be conveying such sad news.  The team at Day Air is very tight – and Bettina was an extraordinary teammate (it’s hard to be using the past tense here….) who lived the Day Air mission.  Her irrepressible spirit was contagious and I, for one, commit to press forward with that very same irrepressible spirit.

Thank you Bill and the Day Air team for sharing her exceptional life  for others with the credit union community.  Her mission continues with each remembrance.

 

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Here They Go Again!

Two years ago I described Frontwave Credit Union’s call for members to serve as elected directors.  The result was ten candidates running for three open board spots.

The members had a 30-day window to vote online or to turn in written ballots at a branch. When voting the members were able to post comments about the election procedures. Here is one:

“The voting process is great reading all candidates listed in the process I didn’t know them, but by reading their bio gave me an idea of what they are all about. love it.”

The entire nomination and voting experience was an eyeopener for the credit union’s leadership, especially the backgrounds and motivation of members wanting to serve.

The Year’s Update

This week I received the credit union’s third quarter Briefing newsletter.   In  CEO Bill Birnie’s Notes column was the following paragraph.

If you’re interested in making an impact on Frontwave’s future, consider applying for nomination to our Board of Directors. You know that feeling when you’ve got a great idea that could make something better? Here’s your chance to bring your ideas to life and make a real difference in the future of our credit union.

There was a special “call out” link in the newsletter with a similar invitation  headlined Calling All Fighters:

Are you ready to make an impact on our credit union? Here’s your chance! We’re on the lookout for active Members who are eager to play a role in shaping the future of our credit union. If this sounds like you, why not apply for a nomination to join our Board of Directors?

When you check the learn more link this comes up:

Our members make great leaders

Our Board isn’t made up of a group of faceless executives in glass offices. Instead, they’re all Frontwave members, just like you. They volunteer, you elect them, and they don’t get paid a penny. Their mission is to set the overall direction of the credit union and make sure it operates in the best interest of its members. So what have these folks been up to lately? Take a look at our 2022 annual report

Want to join this amazing group of volunteers? We’re looking for a few good folks to join our crew.

Then here’s how to get involved.

Open Positions:

Board of Directors: THREE positions with 3-year terms

If you are an active member and are interested in applying for nomination, you are invited to submit an application by clicking the “Apply for Nomination” button below and completing all required documents.

Three Months for Receiving Applications

The credit union makes the process transparent, public and easy to follow.   There are four documents that anyone can read and complete on line.  One is the Statement of Responsibilities for either Board or Supervisory Committee Member.

The Member Application, Statement of Consent (to the responsibilities of the position) and Conflict of Interest (yes or no checkbox for seven potential conflicts) must be filed by September 29, 2023.

The nominee then hits the submit button to forward the completed documents to the Nomination Committee.

A Cooperative Democratic Election

I have seen no more transparent, public and accountable  election process.  The credit union:

Actively seeks member participation;

Provides clear and easy to complete forms if interested;

Allows time for interested persons to learn more to decide whether to throw their hat in the ring.

This is an example of cooperative democracy in action.  Members are the foundation of every credit union’s resilience. The elected board is the connection to ensure the members’ voice is heard.

The clarity and simplicity of the process is heartening. Seeing this leadership approach  inspires confidence in Frontwave’s and its members’ futures together.

If every credit union election were as straight forward  as this $1.4 billion and 122,000 member coop’s, the entire  system could be reenergized.

 

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Fanfare for the Uncommon Woman

Yesterday I described Aaron Copeland’s Fanfare for the Common Man as a staple of patriotic concerts.   Yesterday it was the opening number of the National Cathedral’s Independence Day program.

I then learned that composer Joan Tower had written a series of six short Fanfares for the Uncommon Woman as “parts” of one 25-minute composition.

She describes the work as a tribute to “women who take risks and are adventurous”, with each dedicated to an inspiring woman in music.

The first of the Fanfares was commissioned by the Houston Symphony as part of the orchestra’s Fanfare Project and was composed in 1986. It was originally inspired by Copland’s Fanfare for the Common Man and employs the same instrumentation while adding the glockenspiel, marimba, chimes, and drums. The piece is about 2 minutes and 41 seconds long and is dedicated to the conductor Marin Alsop. (source: Wikipedia)

Equal Time

Here is the St. Louis Symphony’s recording of the first of the six fanfares.

 

(https://www.youtube.com/watch?v=aa7yiLOp4DA&list=RDaa7yiLOp4DA&start_radio=1&t=42)

 

 

 

 

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Fanfares for the Common Man on July 4

One of the most frequently played musical tributes in July 4th concerts is Aaron Copland’s Fanfare for the Common Man. 

He wrote Fanfare in response to a 1942 request from  the conductor of the Cincinnati Symphony Orchestra as the US became became fully involved in World War II.

As a musical form, a fanfare is usually a brief, musical introduction to some  noteworthy person, ceremony or event.  Fanfares announce the appearance of Royalty in Europe, open the  Olympic games, precede important national or military occasions and celebrate events such as the dedication of a memorial or new public space.

By this time Copland had  composed a wide variety of scores for orchestra, dance, film and drama that portrayed uniquely American sounds. Compositions such as Rodeo, Billy the Kid, Appalachian Spring evoke scenes of our country from the expansive West to the modern city.

Here is an example of Copland conducting Hoedown from the ballet Rodeo.  Get ready to dance along with him on the podium!

Copland considered multiple names for his new composition including “Fanfare for the Day of Victory,” “Fanfare for Our Heroes,” “Fanfare for the Spirit of Democracy,” “Fanfare for the Paratroops” before Fanfare for the Common Man.   The phrase had been used by Vice President Henry Wallace who called the 20th century the Century for the Common Man.

The music is martial, dramatic, easy to follow and heroic in feeling.  He wanted to honor the ordinary people who were doing the fighting and dying in the war.   It is still the most popular piece in patriotic concerts.

One person upon hearing the music wrote:  I would love this as the anthem of humanity, the song of farmers, cobblers, men who were raised from the land, staring into the night sky at the fat moon and saying, “I am going there,” and never once doubting his words.

The version which follows is the one that you will hear across the country today.

(https://www.youtube.com/watch?v=h_V-rqckzFg&t=10s)

Another Salute to the Common Man

Few of us will compose music to communicate a vision.  Most will use the spoken or written word.   What follows is from a life dedicated to Copland’s Common Man:

“My life has been centered around my family, my wife Jean, and credit unions. Why credit unions? Because I could never accept that in America those who had the least and knew the least should always pay the most for financial services.

“I believe that credit unions were created to correct that injustice. In the words of Thomas Paine – a true revolutionary in all respects –“I have always objected to wealth achieved through the misery and misfortune of others”.

“That economic injustice continues to thrive in our financial system today. Credit unions remain the alternative, the best hope, the answer.

“We all confront an uncertain future, and many folks would like to rewrite the past. You and I know we cannot change the past. But if we have credit union leaders with integrity, courage and character; we most certainly can reshape the future…but changing the future is very hard work.

“Arthur Ashe, the great American tennis player, described the credit union leaders we need. Ashe said: “ True leadership is not the urge to surpass all others at whatever cost, true leadership is the urge to serve all others at whatever cost.”. . .

(The words by Jim Blaine, former CEO of State Employees NC,  to the African American Credit Union Coalition upon his induction to its Hall of Fame)

Two tributes on July 4th  to celebrate liberty for all and especially the contributions of the Common Man.

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What Does America Mean to You?

The 4th of July is every person’s chance to celebrate the nation’s birthday.  The occasion is a fun day for most, often marked with words about the special country which we share together.  And once again to honor our collective vision.

The Declaration of Independence is the focus of many speeches. Its opening words remind us of our founding ideals: We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Since 1776 we must acknowledge that the words are still aspirational, never fully realized.  America’s freedom is an unfinished project.  The fundamental challenge is ever present:  Are ordinary people capable of governing themselves?

The Commercial Appropriation

This spirit of the pursuit of happiness has also become entwined with  America’s commerce. In the post WWII federal highway infrastructure project, the car became a symbol of this open ended personal possibility.

In 1976, Chevrolet was the most popular car in the USA. General Motors crafted a slogan with video declaring that Chevy and the USA were one and the same: “Baseball, hot dogs, apple pie, and Chevrolet.”  The company even tried to appropriate baseball’s 7th inning stretch to celebrate its brand leadership.

Today, crowds stand to sing God Bless America. Perhaps a triumph of ideals over markets?

The Declaration and Credit Unions

I believe credit unions are themselves an expression of America’s founding document.  They also represent what makes American enterprise so powerful.

Credit unions embody more than the Declaration’s opening words about life and liberty.  Cooperatives exemplify how the document’s intent is to be realized.  The very last sentence reads:

And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

This mutual pledge of lives, fortune and sacred honor is every credit union’s founding ethos. Moreover, like America’s political democracy, the cooperative system depends on individuals committed to the principle of citizen self-rule.

The first generation of credit union pioneers. like the founding fathers. understood both the ideals and challenges of self-government.   Credit unions are started and sustained by volunteers.   They shared funds and a commitment to address common needs.

The initial dimes and quarters may have been small, but their impact on lives was real.   Like the political colonies, these economic revolutionaries knew each other.  They joined to spread their vision of financial self-help across America.

The Challenge

While the Declaration’s truths may seem self-evident, the democratic process is an ongoing experiment.  Today almost all credit union founders have passed on—will their basic principles be sustained?

The phrase of people helping people is repeated. But the practice of cooperative democracy is often missing.   Voting is the most important lever of a free people.

As Americans progress through each life’s varied experiences, we add to our understanding of what American means-individually and collectively.

In my mind, credit unions show how the Declaration became a reality.    While America’s political and economic justice are ever-present challenges, America would be much the poorer without the power of the cooperative example.

Have a fun and grateful 4th with family, friends, and colleagues to honor America, the greatest cooperative enterprise on earth.

 

 

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The Source for Credit Unions’ Greatest Peril

When concerns are raised about risks to credit unions’ future, the most common threats  are perceived to be “out there.”   The potential for recession,  a continuing rise in rates, cyber threats, technology innovations, or other external marketplace disruptions.

However the greatest challenges may not be external, but closer to home.   In a speech to a major credit union conference, a former NCUA Chairman described his five greatest concerns as:

  1. The combining of the deposit insurance funds;
  2. The possibility of merging the federal regulatory agencies;
  3. Doing away with credit union’s tax exemption;
  4. Abolishing the CLF and having credit unions go into the Federal Reserve bank;
  5. The FFIEC requiring expanding its regulatory disclosures for credit unions comparable to banks.

The concerns are from a speech by Chairman Ed Callahan to the 49th Annual Meeting of CUNA in 1983.  (Source Credit Union Magazine, June 1983, pg 10)

Two lessons.   What Ed describes is exactly the sequence of events that led to the demise of the S&L industry as an independent  financial system.  While the tax exemption was ended in the early 1950’s, the later changes occurred in just ten years beginning in the mid 1980’s due to the system’s inability to transform when facing deregulation.

Secondly,  the five  concerns were being considered  by  entities in Washington D.C.   These included commissions on governmental efficiency and reform,  congressional proposals following deregulation, and both Treasury and opponent’s questioning cooperative’s tax exemption.

These winds are still blowing in DC.   They blow harder every time  terms such as “level playing field” and “parity” are used.

Credit unions can continue to excel in members’ eyes. However, they could  lose in the  political marketplace if their primary goal is to have the same regulatory options as their banking competitors.

Why some in Washington will ask, do we need a separate agency to oversee the same activities?