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Missing Voices

 

          NCUA’s New Logo

“I wish I had kept the phone numbers and emails of CEOs that are now gone from view.  Ex-CEOs that could tell me what they had wished they had done when they faced downward curves on the way to the end.

I worry that lessons lost and archived outside our industry are what is needed now.

What did we miss when we justified the NCUA or regulators’ actions to end an organization?  What did we miss when no owners really dug into a vote to end a charter?  What did we miss when the life-cycles of leaders and volunteers were more important than CUs needing young blood?

What did we miss when we followed models based on scale that left local communities and individuals on the sidelines?  What did we miss that are the keys to turning a losing streak back towards winning?

Some might say we missed nothing, we witnessed progress and the natural march towards an industry’s maturation.  But that sounds to me like short term winners talking.” (Randy Karnes, 2018)

Tens of Thousands  Fewer Voices

NCUA was converted to an independent agency with a three-person board in 1977.

The results include 12,000 fewer charters and the elimination of  12,000 CEO’s and volunteer board’s leadership platforms.   Their employees  lost independent career opportunities as these organizations were shuttered. 

The movement’s human capital–enthusiasm, insights and entrepreneurial spirit–has been lessened.   

Communities have fewer options.  As charters are pulled up by their roots, the movement becomes less diverse, less democratic, more concentrated and remote.

Credit unions are being depleted.   No movement can sustain itself built on subtraction rather than addition and multiplication.

In the end there will be no need for an NCUA or logo.

 

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NCUA’s Is Falling Down on its #1 Actvity

In Illinois, the initial state credit union act prohibited officers and directors from borrowing from their own credit union.   The act authorized chapter credit unions  to meet those official’s needs as well as serve members of any groups too small to form their own credit union.

When I became Illinois credit union supervisor in 1977, this restriction had been removed.  However the concept that persons managing money should be subject to special scrutiny remained.   As one colleague noted, one aspect of our job was to keep honest people honest.

Examiner Norman Glazer

Illinois conducted an annual exam of its 1,000 plus charters.   An important part of the onsite visit was reviewing all official family loans, their relatives and the travel and other expenses they charged the credit union.

Examiner Normal Glazer looked like a bookkeeper.  He wore wire rimmed glasses, was slight of stature, talked in subdued tones and was a long-time state employee.   He was  a very thorough examiner, who knew accounting and more importantly, the many ways that humans might conceal wrongdoing.

I asked him how he reviewed the loan and savings verifications looking for fictitious accounts.  It was simple-he selected a sample of each, and then looked up the names in the phone book.  If there was no name, he dug further.

Among Norman’s discoveries was a $1.0 million embezzlement from the Scott Foresman Credit Union where the manager kept a double set of books and accounting ledger cards.  When Norman’s tape of the individual ledger cards did not match the GL total, he sensed something was wrong. He refused to accept the “missing cards” explanation and found a completely separate set of ledgers with which he documented the full amount of the loss.  CUMIS paid the claim he substantiated.

Human Nature Has Not Changed

I cite this Illinois examination practice in support of Board member McWatters and others who have publicly observed that fraud is the most common cause of NCUSIF’s losses.

The historical concern about senior managers and directors engaging in self-dealing has a 5300 call report “echo.”   Account codes 995 and 996 show the number of loans and total dollar amount to this leadership group.   The table below lists the top 20 credit unions by highest average loan balance with total loan numbers and balances as one way of reviewing the data.

This table shows wide variations in this activity even among these 20.  The list by itself might prompt some obvious questions; however, the point is NCUA still believes this is an activity for ongoing monitoring—or is it?

Job # 1

NCUA’s largest budgeted amounts and the majority of its workforce are dedicated to  on-site exams. One assumes all loans, family related transactions and the expenditures charged by senior staff and directors to the credit union would be reviewed as normal exam protocol.

Reporter Peter Strozniak of the Credit Union Times regularly follows NCUA’s legal filings and court documents. From these records he describes the details of these internal thefts and other employee/director wrongdoing, unfortunately years after the credit unions’ failure.  These detailed accounts show that examiners have overlooked extended periods of self-dealing.

A recent example is from the Time’s report of NCUA’s suing CUMIS for recoveries from Melrose Credit Union’s CEO.  His October 15, 2021 story described one NCUA claim:

Prior to his 1998 retirement, Herb Kaufman, Kaufman’s father, was Melrose CEO and served as the board’s treasurer. In May of that year, Herb Kaufman became an independent consultant to Melrose under the terms of what the NCUA described as an unusual three-page agreement, which was signed by only one member of the board who turned out to be a life-long and close friend of Herb Kaufman.

The agreement contained a one-year renewable term that paid Herb Kaufman $5,600 a month for his services.

“Despite his obvious conflict of interest, Kaufman aggregated solely to himself the over site within the Melrose Consulting Agreement with his father,” the NCUA lawsuit reads. “Thereafter for more than 18 years, Kaufman covertly caused the renewal of his father’s Consulting Agreement without ever informing the Melrose board or otherwise bringing its continued existence to the attention of the Board.”

According to the NCUA, Herb Kaufman was paid $1,239,795 over 18 years and failed to generate any business for Melrose or provide any meaningful consulting services to the credit union. What’s more, Melrose also paid Herb Kaufman’s travel expenses of more than $26,000 even though his consulting agreement stipulated the travel expenses were to be paid by Herb Kaufman.

The facts offered by NCUA say the Melrose President paid his father (the retired CEO) for 18 years without a fully approved contract.

Assuming an annual NCUA and state exam, this arrangement went un-noted for almost two decades.  How could this be?  Same last name, monthly checks, a written agreement-it raises the question of what do examiners look at?   And NCUA is asking CUMIS to pay up because the bond company should have detected this?

This is not the first time NCUA has sued CUMIS for credit union failures.

On April 23, 2010 NCUA placed the East Lake, Ohio-based St. Paul Croatian FCU in conservatorship  with an estimated loss of $170 million, or almost the entire amount of insured shares balance. Loan fraud was among the primary reason for the CU’s collapse.

The IG significant loss report stated:

At St. Paul Croatian FCU, examiners didn’t assess the weakness of the credit union’s internal controls and failed to ensure that the credit union took corrective action on document of resolution issues.

How does NCUA atone for its exam failures?  The CU Times report:  The NCUA filed a proof of loss claim with CUMIS for nearly $72.5 million (St Paul Croatian FCU). However, because CUMIS’ fidelity bond has a $5 million coverage limit, the amount of money in dispute would be less than 7% of that figure, said Phil Tschudy, a CUNA Mutual Group spokesman.

Between this 2010 St. Paul failure and the October 2021 CUMIS suit for Melrose recovery, there have been repeated cases of significant examination failures over multiple exam cycles.   Three of these are described in this post.    The information, all from court proceedings, documents CEO embezzlements lasting years.  In the CBS Employees FCU case, the CEO fraud extended for two decades resulting in an estimated $40 million loss to the members.

NCUA’s Two-foldProblem

These recurring, costly examples, suggest that NCUA is not doing well its number one job of examination.  Examiners should be given a whole new process  and trained on reviewing self-dealing activity.

But it is hard for NCUA to fix a problem that is hidden from public scrutiny until years after the fact.

A second challenge is NCUA’s lack of transparency.  It provides no information on its supervisory actions.  The agency has said nothing about its current conservatorships, one of which is over $4billion in assets. But then years later court proceedings show how extensive and elongated the pattern of misconduct and coincident examination shortcomings were.

Generalized IG critiques of exam failures provide no details of the examiner oversights or  any mention of accountability.   The response to IG findings is by the same people responsible for the entire process in the first place.

Accomplishing Job # 1

With all the recent public remarks by NCUA leadership about cyber ransomware, cryptocurrency, DEI, climate change and other current “risk” topics, the agency seems unable to perform its most important, historically necessary, oversight function effectively.

Examinations produce pages of financial statements, ratios and trends, and checked boxes for policy adequacy.  Almost 97% of credit union assets are held by Code 1 and 2 rated credit unions.  The biggest risks are internal, not on the balance sheet.

Examiners should be training for conversations about all forms of self-dealing to see who approved what, when and why.  These discussions should be part of the exam record.  The topics should be raised and documented in the board exit conference.  Without putting these activities in the light of day during exams, everyone presumes it’s OK to keep questionable activities in the dark, and out of the record.

Where is Norman Glazer when credit unions need his sixth sense, or rather common sense?  For example he might look at the table above and ponder why are real estate loans to senior credit union personnel so much larger in the lower priced Midwestern states than in any of the more expensive big city coastal markets?

I know he would have challenged a $35 million dollar sinecure committed to a newly organized non-profit by two merging credit unions to support the “advocacy” activities of the CEO who arranged the merger.

The fiduciary concepts of care and loyalty would appear to have been erased from NCUA’s examination and supervision process a long time ago.

Credit union members pay the costs of these failures. However in the long run its is the public reputation of NCUA and the system that is at risk when examinations miss the obvious.

 

 

 

 

 

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The ART of Rowing

For generations men and women have been rising before dawn to row.   These early morning workouts are dark, cold and damp.   The sport is far from public view save for infrequent weekend regattas.

The physical and mental sporting challenge can be rewarding.  But more unique is the setting–the never ending  tableaus of dark nights transforming into colorful  mornings of first lights.

Nature as it awakes, monuments bathed in artificial pre-dawn light, and the iconic sight of an “eight” participating in this classic ritual of humans and nature.   That is rowing’s aesthetic experience that transcends the physical.  And draws people of all ages back to the water.

Dawn’s dramatic opening fanfare

John F Kennedy Center for the Performing Arts

The Georgetown Waterfront

The half-awake moon over the Lincoln Memorial and Washington Monument

Monuments at daybreak

Rowers  greet the dawn

Light announces a new day

Photos by Alix Patterson, a life long rower, rowing coach and parent.  From high school through college and now in a master’s program on the Potomac River in Washington DC.

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NCUSIF Investment Decisions Are Hurting Credit Unions

Several days ago, NCUA posted the August financial results for the NCUSIF.

The good news is that the fund continues to show positive net income.  For the first 8 months the year-to-date net is $122.2 million versus $45.4 for 2020.

However, only 13% of the fund’s $19.2 billion portfolio matures in less than one year.

In contrast, at June 30 credit unions reported 53% of their total investments were under one year.  Of that amount over half, or 38% of all investments were in cash and overnights.

Both credit unions and NCUA have access to the same economic forecasts.   Why is there such a dramatic difference in how investments are being positioned in this part of the rate cycle?

At the September board meeting CFO Schied promised to publish the NCUSIF’s investment policy in response to a question from a board member.   The $1.2 billion reported in new August investments shows why this transparency is so urgent.

The most important monthly  decisions by the fund are selecting investment maturities.   The board and credit unions should know  the assumptions committee members used when making these decisions.

The NCUSIF’s August Investments

As listed in the NCUSIF financial report:

8/16/21 T – Note 600,000,000 $ 8/15/2028 1.01%

8/26/21 T – Note 100,000,000 $ 8/15/2026 0.84%

8/26/21 T – Note 100,000,000 $ 8/15/2027 0.97%

8/26/21 T – Note 100,000,000 $ 8/15/2028 1.11%

8/26/21 T – Note 100,000,000 $ 8/15/2025 0.66%

8/26/21 T – Note 100,000,000 $ 8/15/2023 0.22%

8/26/21 T – Note 100,000,000 $ 8/15/2024 0.45%

I calculate an average weighted life of 5.7 years and a portfolio yield at .943% for these seven investments.

The critical question is what were the committee’s assumptions that caused them to lock up $1.2 billion for 5.7 years at a yield under 1%.  These actions also reduced the overnight account of over $1.0 billion in June to just $230 million in August.   It lengthened the portfolio’s average maturity by over 100 days.

The decisions show a seeming absence of any market awareness. Two investments have the same seven-year final maturity.  However between the August 16, $600 million first note purchase, and the August 26 $100 million second note at exactly the same maturity, the yield rose 10 basis points!

This 10 basis point lower yield on the first $600 million will cost the fund and credit unions $600,000 per year for seven years, or a total of $4.2 million over the life of the note.  How did the committee make such an obviously untimely decision?  Why has the committee continued to invest further out the yield curve when the consensus of most economists is that rates will be rising?

Shouldn’t the fund instead be rolling over these  notes in 13 week, 6 month or one year Treasury bills yielding .05% to .15% in order to reinvest these funds as the markets move? For example the two year treasury bill has more than doubled in yield from the .22% return NCUA received in August.

I know of no credit union that would have made these investments with this average maturity and this yield with member funds.   But that is what the committee did.

At the markets close today, the seven-year treasury note yielded 1.414% and has traded as high as 1.5%.

If the $600 million had yielded 50 basis points higher, this would generate $21.0 million over next seven years for the NCUSIF.

Going Forward

For the quarter the major topic on the economy has been inflation.   Is it transient due to temporary structural issues or shooting way beyond the Fed’s 2% target?

The economy’s continued supply shortages are now estimated to extend into mid 2022.  Today  the Fed will release its interest rate and monetary policy steps going forward.   The tapering of bond purchases is expected and many forecasters foresee a Fed rate increase sometime in 2022.

Unfortunately recent NCUSIF investments will be a drag on its revenue for years to come.   Continuing to invest in a period of historically low interest rates using the same ladder approach as in years of more normal rates makes no sense.  These unusual investment decisions hurt credit unions and their members by causing revenue shortfalls for the fund.

The NCUSIF’s incremental investments should instead be rolled over in very short maturities and then re-invested as rates move into ranges consistent with the yield requirements for the NCUSIF’s operations.

The investment committee is presumably the same senior NCUA officials who oversee examination and supervision priorities.  What would their response be to a credit union making these investment decisions?

Timely and transparent presentations of the cooperatively-owned NCUSIF financials is a commitment made by the agency when the 1% underwriting deposit was implemented.   Fund results should be posted as soon as they are ready.

There needs to be a discussion in the published report of the investment actions, or none, made during the month.  That is one critical way to build confidence in the management of this unique credit union resource.   And to insure decisions are made in credit union members’ best interests.

 

 

 

 

 

 

 

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Three Buffett Observations Relevant for Credit Unions

One of history’s many lessons is that organizations, institutions and even countries rarely end their existence because of external forces.

Leadership failures, not competition, cause the demise of most businesses and non-profits.

In the credit union system today it is easy to see examples of this failure of leadership oversight described by Warren Buffett.  The technical term for this activity is governance.

Rarely do credit unions have elections for directors; CEO’s end their reign and opt for one more big payday by  selling their coop to another; CEO’s buy banks with members’ savings without disclosing relevant details or future returns to their nominal owners; etc.

Here are Buffett’s view of these institutional failures.  The question is whether your credit union could be fairly characterized by one, or all?

  1. “A CEO that wants a puppet board can still get one, I’ll put it that way.” (he notes that executives can prevent their directors from questioning them by wasting their time.)
  2. “It isn’t fundamental dishonesty that causes people to go in a different direction. It’s human nature. There are plenty of people who are really decent people, intelligent people. I’d be happy if they married my daughter, or if they moved in next door to me. But they just don’t come to grips with reality. And boards usually don’t push them to.”
  3. “Picking the right CEO is 10 times more important than the compensation. But somebody has to be there to represent the shareholders in terms of overreaching by even competent executives.”

How are the member-owners represented in your credit union?  Are they are just well-served customers?  What is necessary for credit unions to reverse the all too frequent examples of leadership and governance failures now occurring? And accepted as “usual and customary”?

It is not a shortfall of capital that causes most credit unions to turn in their charters.   It is the absence of character and  awareness of the member’s “common good” by leadership.

When every credit union performance measure is a number, one consequence is that everyone has a price.

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A Haunting Poem for Halloween

Our neighbor’s yards have been filled with signs of the season these past several weeks.  They include white ghost-like specters hanging from trees, scattered skeleton parts on lawns, mock tomb stones and the endless variety of orange-lighted pumpkin carvings-some real and others plastic.

Halloween is a secular recognition by costume and irony-trick or treat-of the final reality that we all share.

Our neighbors invite us to join with them around an open, outdoor fire pit  with the greeting of “Happy Halloween!” Adults accompany children dressed as multiple characters on their door-to-door hunt for sweets and show.

Yet Halloween is about death’s reality-sort of.  One of the most popular poems in England is Thomas Gray’s Elegy Written in a Country Churchyard.  It captures the haunting challenge of life observing death.

Published in 1751, the narrator uses the setting of a church’s graveyard to mediate on the inevitable fate of everyone, whether rich or poor, known or unknown, skilled or day laborer.   It begins:

The curfew tolls the knell of parting day,

         The lowing herd wind slowly o’er the lea,

The plowman homeward plods his weary way,

         And leaves the world to darkness and to me.

The poet then enters the churchyard cemetery:

Beneath those rugged elms, that yew-tree’s shade,

         Where heaves the turf in many a mould’ring heap,

Each in his narrow cell for ever laid,

         The rude forefathers of the hamlet sleep.

The breezy call of incense-breathing Morn,

         The swallow twitt’ring from the straw-built shed,

The cock’s shrill clarion, or the echoing horn,

         No more shall rouse them from their lowly bed.

The remainder of the poem’s 32 stanza’s is a meditation on the democracy of death no matter one’s station in life.  From the poor to the powerful.

Let not Ambition mock their useful toil,

         Their homely joys, and destiny obscure;

Nor Grandeur hear with a disdainful smile

         The short and simple annals of the poor.

The boast of heraldry, the pomp of pow’r,

         And all that beauty, all that wealth e’er gave,

Awaits alike th’ inevitable hour.

         The paths of glory lead but to the grave.

The complete poem can be found here.

Happy Halloween!?

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One Photo, Hearts on Fire, a Credit Union and Community Respond to a Vital Human Need

Clearwater Credit Union, Missoula, MT, is involved with solutions to one of the most difficult challenges facing their community, the nation and the world: refugee immigration.

Every day this story moves from Afghans on the front page to Haitian migrants huddled under a bridge over the Rio Grande.  Politicians pose and procrastinate while hundreds of private organizations, individuals and communities respond to this never-ending need for human relief.  The temptation to stir up public fear is never far away.

This is the story of how Clearwater and its community joined to respond to this on-going human tragedy .  

Founded in 1956 by eight police workers, Clearwater Credit Union is the second largest of Montana’s 47, with over $850 million in assets plus a $250 million mortgage servicing portfolio. 

It is the state’s largest Community Development Financial Institution (CDFI).

In 1979 Missoula was a resettlement community for Hmong refugees from Southeast Asia, allies during the Vietnam war.  Today, that community includes farmers, food service operators and active vendors in local open markets.  The forty year history of this immigration experience is described in this 2016 article  in the Missoulian:

While their contributions to the outdoor markets are perhaps most visible, first-generation Hmong immigrants and their offspring are bankers and real estate agents; decorated war heroes and high school valedictorians; sports standouts and chefs; entrepreneurs, business owners and probably a dozen other things around town.

The Need Arises

In 2016 the refugee resettlement needs rose again in Missoula with people from Syria, the Congo, Iraq and Eritrea trying to find a new place to raise families, often following harrowing escapes.

The turning point for the credit union and many in Missoula was the picture of Alan Kurdi, a three year old lying on an island beach off the coast of Turkey.  His mother and brother also perished-all Kurdish refugees hoping, somehow, to get to Canada.

In memoria aeterna erit justus  (The righteous-innocent-will be in everlasting remembrance)

The still boy beside moving waters. This face of tragedy energized a community.  

Mary Poole, who had been a tree-climbing arborist before her first child, found the photo gut wrenching.   She was determined to do something and raised the topic with her local book club. They began research to find out what worked well in other successful refugee programs. Montana was one of only two states that did not have a path to welcome refugees. 

This grassroots group invited the International Rescue Committee (IRC) to open an office in Missoula and serve as the city’s resettlement agency, creating that path.  They then founded a 501(c)3,“Soft Landing Missoula”, to support newcomers and connect them with all aspects of community life.  

Her story and this remarkable organization, can be seen in this 2017   8 minute video.   

Transforming the Credit Union

Jack Lawson became Clearwater’s CEO in 2013.  His prior roles included Founder and CEO of Brooklyn Cooperative FCU (1998-2008) and COO, Self-Help FCU ( 2008-2013).  After making sure the trains ran on time, Jack posed the question how the credit union could differentiate itself for its employees, members and from competitors.  The credit union chose to implement a values-based approach to business strategy.  

The history of this transformation and what it meant for the credit union’s priorities  is described  in their 2018 Annual Report.  As Montana’s largest CDFI and their strategic repositioning, refugee settlement was exactly a situation for which the credit union intended to have a positive impact.

Jack too had been moved by the photo. The credit union was chosen by the local office of the International Rescue Committee (IRC) to be the designated provider of financial services for refugees.

As Jack related: “It was an easy fit for us.  We saw it as a way to improve the financial well-being of some of our most vulnerable new neighbors.” This support involved the following initiatives:

  • Becoming a financial services provider for both Soft Landing and IRC
  • Coordinating with IRC to provide financial accounts for all incoming refugees
  • Adopting telephone bank translation services, at the credit union’s expense, to help each branch team serve people speaking languages they do not know-for example, Swahili, French, Tigrinya, and Arabic.   
  • With IRC, developing financial education classes for refugees to help them understand the US financial system, products, and services
  • Providing credit builder loans to build credit histories for the new arrivals
  • Contributing tens of thousands of dollars of philanthropy toward Soft Landing and IRC
  • Publicly celebrating the credit union’s work with the refugee community to help normalize their presence as neighbors

Refugees typically have no credit or personal financial history. The credit union teaches them how to participate in the financial system and establish a personal record.  The credit union has now hired its first refugee employee from among those  who have resettled in the community over the past five years.  

But the credit union’s role was much broader than offering financial services. As related by Mary Poole, CEO of Soft Landing:

“I met Jack on a soccer playing field.  He is part of the community and attends multiple public events. He knows the community and cares for its people because he is a part of it.  He came to us and asked what the credit union could do.  They supported local sporting events, annual fundraising, provided volunteers–we now have a CCU employee on our Board.  

There is a whole culture at the credit union reflected in their support for our work.  This is not just part of Jack’s job or the credit union’s service efforts.   It is how they interact with everyone and view their mission.  They are a thought leader in the local and world community-it’s the culture of the credit union.”

In the new federal fiscal year starting October 1, Soft Landing anticipates 75 Afghan and 150 other country refugee arrivals will be resettled in Missoula by the International Rescue Committee.  When Soft Landing first announced the idea of welcoming new neighbors in 2015, over 300 community members signed up to volunteer to help with school, housing, learning English, transportation and the dozens of other immediate personal needs of new arrivals- all before a single refugee came to town.

This interest has not faded, and has recently been  invigorated by the needs of  incoming  Afghan evacuees. Community connections are what makes these life transitions effective. The programs also celebrate the diversity, skills and experiences refugees bring to their new community.  

The Credit Union’s Strategy

Having moral imagination is expected of leaders, but nonetheless difficult to fully practice. Many in positions of authority ignore the imperatives of ethical truth in moments of life’s difficult choices.  It is much easier to follow the utilitarian pragmatism which suffices for many a leader’s everyday decisions.  

But there is another model.   To be moral is to be oneself.   Instances of compassion multiply and attract others of similar purpose. A person with this leadership capability is celebrated in the oldest of all literature:

Beatus vir, qui timet Dominum. . .

Generatio rectorum benedicetur.

Et justitia eius manet saeculum saeculi.

Exortum est in tenebris lumen rectis

Blessed are those who fear the Lord. . .

The generation of the upright will be blessed.

And their righteousness endures for ever and ever.

Unto the upright there arises light in the darkness. 

That is the vision Jack has set for Clearwater.

An Example of One Refugee Family: From the 2018 Clearwater Annual Report 

A refugee family moved to Missoula from Eritrea, Africa. Thanks to the credit union, they had the help they needed.

On average, it takes a refugee two years to resettle — that’s two years of waiting and wondering what’s next. Here’s how we helped Desbele and his family make themselves at home.

Desbele Tekle and his family came to Missoula from Eritrea, Africa, in May of 2017 during the magic of a Montana springtime. His sister and her family came too, and they all quickly grew to love the mountains, the people, and the “long-running river.”

Staff from International Rescue Committee (IRC) Missoula met the family at the airport and brought them to their new home. After settling in, Desbele and his wife Samrawit attended our “Understanding the U.S. Banking System” class for refugees, which IRC Missoula and Clearwater Credit Union created together.

This class teaches families like Desbele’s how to write a check, use an ATM machine and debit card, and understand the difference between a savings account and checking account, with trainings offered in Arabic, Swahili and Tigrinya through on-site interpreters from IRC Missoula.

The Family Needed a Car

Some challenges of resettlement are distinct, like language and culture.  Others are universal.  In a family of six, everyone has different schedules, Desbele’s children (ages 5,8, 13 and 15) go to daycare, elementary school, middles schools and high school.  Any parent will tell you that four kids in four schools plus after school activities, will make transportation tricky.  

Clearly they needed a vehicle.

Desbele went to a dealership first, where he tried to navigate a car purchase with a $500 credit card in hand. When that didn’t work, he called a friend (our translator for this interview) and together they went to our credit union.  Because of the banking classes he had taken, Desbele knew we would be able and willing to help with his first purchase here.

With a loan from the credit union, Desbele was able to purchase a minivan Now he can run errands and transport his entire family to church and school.

He can also get work.  Back in Eritrea, Desbele was a midwife.  Now, because of the car, he can make the commute to the Village Health and Rehabilitation Center, where he’s now employed.   Desbele is thrilled to be working again in the medical field. 

“So happy getting a loan because otherwise, it would take a very long time to get money to get a car, which would distort our plans.  This opportunity allows us to dream.”

With his family all together, a reliable set of wheels, and help from the local credit union, Desbele and his family are finding their place here in America — a place where their dreams can come true.

Recently, that dream led them across the country to join up with long-separated family and friends and a life in another city.  The start and “soft landing”they experienced  in Missoula provided them a solid foundation for success in their new home as well as life-time friends to return to visit in this little mountain town.

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“Institutional Memory” Keeps a Student Co-op Relevant for their Community

NASCO is the acronym for the North American Students of Cooperation.   The organization serves student cooperatives, primarily those providing housing and dining options on college campuses.

Their monthly newsletter presents stories about their members.  This month’s edition linked to an article in The Oberlin Review, the student newspaper published on October 8th.

It opened as follows: After temporarily closing its doors during the pandemic, the Oberlin Student Cooperative Association (OSCA) has resumed housing and dining operations.  Harkness House member Tal Clower says, “It’s so important that we make first-and second-year students aware of OSCA because it gives people a sense of place-a special community that makes you feel like you belong.”

The full article is here.  

I found several points insightful as an example of the appeal of cooperative solutions.

  • It is a student-owned, nonprofit organization that offers housing and dining services to almost a quarter of Oberlin’s students.
  • An OSCA member since 2018, a senior, said the co-op experience provides an intimate, close-knit community, and has given her skills she feels will inform the rest of her life.
  • Preserving co-op traditions is the most important way to attract returning students now. In house meetings, older students are presenting Harkness House’s “personality” to potential members.
  • So vital is preserving OSCA’s historical role, that campus co-ops such as Harkness and Tank (another dining option), have created “institutional memory” positions. These story collectors document newsworthy events, take pictures, record oral histories, write articles, and tell the co-op’s role as OSCA reintegrates into daily life on campus.

What Credit Unions Can Take Away

While this story is location and business specific, the re-introduction of the coop option to a new generation is an ongoing challenge no matter the service provided.

Re-presenting your organization after a partial or full closure due to Covid is a universal challenge.   How do you restore the “sense of place” where members feel they own and belong?   Do you have a process to document your institutional memory?   What kinds of creativity will be necessary to reintroduce yourself into member’s lives, especially as they have become more proficient in on-line search options?

How might a credit union partner with these student led coops to broaden their experience with other coop services?  NASCO has a list of these campus-based student owned housing efforts.  This feels like a win-win situation for a credit union seeking the next generation of members.

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Combinations, Corporations, Culture and Credit Unions

Are credit unions corporations?   Not in the technical legal sense, but in the way they see their role in society as they grow?

A critic of many aspects  of corporate activity is writer Jared Brock.   His posts cover many segments of endeavor, but always come back to an institution’s impact on individual lives.

Here are some of his recent assertions:

The entire point of multinational corporations is to shatter local resilience and self-reliance, disconnecting people from land and place and generational skillsets, creating a system of utter corporate dependence.

But as you can see, much of our shopping is human-scale and relational.

If you’ve ever been to a corporate “community event” or witnessed a corporate-created “grassroots campaign,” you know exactly what I mean. Everything’s a bit sanitized and clean and proper and nice and… off.

That’s because corporations aren’t relational — they’re transactional.

They can’t give freely and creatively.

Their legal fiduciary reason for existence is to take.

And human beings can smell it from a mile away.

People create culture → Corporations kill culture.

A question for credit unions:   Given his critique, do mergers of financially sound and long serving credit unions promote cooperative culture? Or are they examples of the transformation to a corporate mindset?