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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?

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Learning from Other “Movements”

Richard Rohr is a Franciscan Scholar who  created the Center for Action and Contemplation in Santa Fe, New Mexico.

His writings focus on the universal themes found in all spiritual traditions.  Often his concerns are directed at the transformation of religious activity as a source of hope and societal betterment through love, to becoming part of established authority and values.

Richard: It’s possible to trace the movement of Christianity from its earliest days until now. In Israel, Jesus and the early “church” offered people an experience; it moved to Greece, and it became a philosophy. When it moved to Rome and Constantinople, it became organized religion. Then it spread to Europe, and it became a culture. Finally, it moved to North America and became a business. This isn’t much of an exaggeration, if it’s an exaggeration at all. The original desire or need for a “Jesus” experience was lost, and not even possible for most people. Experience, philosophy, organized religion, culture, business—in each of those permutations and iterations, Christianity was seen as above criticism. It simply was the religion, the philosophy, the culture.

Parallels for the Cooperative Movement

Credit unions are just over a century old versus the two millennia of Christianity’s evolution.   But it is hard not to see a similar transformation occurring in this very short experience.  From a movement, to a self-supporting system, to an industry, and finally just becoming another option in the financial services business sector.

The “member’s best interest” has become a rhetorical phrase to justify leadership actions, organizational priorities and political lobbying positions that have nothing to do with member’s well-being.

While individual credit unions may pursue their own plans for a while, the two strategic choices would appear to be:

  1. Continue the transition to becoming an indistinguishable part of the broader banking industry, or
  2. A reformation where the member’s involvement and benefit are once again the primary reason for a credit union’s being.

Is there a third choice?

 

 

 

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The Cooperative Leadership of Ralph Swoboda (1948-2021)

(Editor’s note:  The following remembrance of Ralph’s leadership at CUNA was contributed by several of his colleagues.  CUNA’s announcement on September 14 of his passing  can be read here.)

A uniquely talented executive, Ralph successfully led the Credit Union National Association (CUNA) during a critical period of credit union modernization in the 1980s and 1990s. Modernization required transforming the movement’s structure that had remained unchanged since passage of the Federal Credit Union Act in 1934 and soon thereafter, the creation of CUNA. Modernization ensured credit unions’ viability into the twenty-first century by enhancing their capabilities to compete in a deregulated market. It is this historical transition that best captures Ralph’s contributions.

His credit union work began when he joined the Credit Union National Association (CUNA) in 1974 just as the movement recognized the need to change. It lasted through his untimely death while working on behalf of Irish and British credit unions through the nascent Centre of Community Finances Europe that he cofounded.

He initially served as CUNA’s general counsel and then as CUNA’s CEO from 1987 to 1995. He had an innate set of skills that included the foresight to anticipate new challenges before they appeared and overcome the unexpected but inevitable obstacles every endeavor confronts.

By any measurement of the qualities necessary to be a leader, Ralph met them all. He possessed vision, steadfastness, empathy, resilience, and compassion. Those traits – blended by his splendid intellect and indefatigable personal energy – defined Ralph as an unusually gifted executive.

The Forces for Credit Union Modernization

Ralph was at the center of the credit union movement from the early 70s on. The number of credit unions reached a high near 23,000 in 1972. However many credit unions lacked a too narrow a base from which to grow. Chartering new credit unions became challenging.

CUNA embraced the new regulatory era initiated by the National Credit Union Administration that allowed credit unions to accept small employee groups in their membership so long as each group had a common bond.

Ralph’s leadership during this transformative period is incalculable. Playing an instrumental role in ensuring credit unions had the tools to compete and thrive, Ralph advocated changes to the structure of the credit union system that served the movement since the 1930s.

Organizational Change

Among the reforms led by Ralph was the creation of new movement entities that enhanced the competitive capabilities of credit unions by leveraging their ability to collaborate.  It required a transformation of CUNA’s Governance structure. Formed initially as an association of state associations, CUNA’s Governance needed to blend the role of both credit unions and their state leagues.

CUNA Service Group, a CUNA and league subsidiary, was created to enable credit unions to become full-service financial institutions. Through partnerships with reputable financial-service companies, credit unions were able offer a range of new services beginning with a form of checking called share drafts that new legislation had enabled. As an attorney, Ralph played a prominent role in creating the share draft program from its successful pilot to the national rollout.

Within a few short years and under Ralph’s leadership, additional partnerships were formed to enable credit unions to offer members credit cards, mortgages, and a new service called individual retirement accounts (IRA’s)created by Congress to improve retirement savings options for consumers.

Ralph helped create U.S. Central Credit Union that functioned as a corporate credit union for natural-person credit unions.  It then evolved to become an integral part of a new Corporate Credit Union Network providing a full menu of wholesale services to credit unions.

Under Ralph’s leadership, the CUNA Foundation progressed from supporting credit unions  responding to environmental disasters into the influential National Credit Union Foundation. In addition to CUNA’s president and CEO, Ralph was president for each of these organizations.

Renewal

While modernization reduced the number of credit unions, the number of members and assets grew exponentially.  Their growing operational independence created different relationships between credit unions and their associations. The CEOs of large credit unions sought greater direct input into their national organization.

Under the movement’s original structure, credit unions belonged to the state leagues and the leagues belonged to CUNA. Ralph initiated the first steps of revamping this ownership structure. He created a task force of credit union and league executives which proposed recommendations that led to a significant changes and new association bylaws.

Called “Renewal,” the process provided a combination of credit union and state league representatives on CUNA’s governing Board. For the first time credit unions became members of CUNA. Elections to the board were regionally based.   Divisions representing credit unions of differing asset sizes ensured fair representation among an increasingly diverse movement, while still including a membership category for leagues.

Modernization and the growth of large credit unions required more sophisticated educational and training services for the growing numbers of professionals joining the industry. Credit Union marketers approached Ralph to propose the creation of a Marketing Council run by the marketers themselves with CUNA providing support services. This first council led to more organized around the professionals now employed in credit unions—finance, lending, technology, human resources and operations. The councils now have a multi-decade record of sharing their knowledge among over 6,000 members.

Regulatory modernization, credit union growth, and the rise of professional staff led to concerns that the movement would lose touch with the cooperative philosophy of its roots.  In response Ralph supported a program called Development Educators so credit union personnel could be ambassadors to explain the cooperative tradition of service over profit and the importance of credit union’s historical role.

Leading In an Era of Change

Ralph’s tenure during this era of multiple modernization forces was in many ways equal in importance with the founding years credit union development. Ralph’s leadership role was as vital to credit unions today as those achieved by the movement’s founders.

Leaders earn respect by combining a commitment to the execution of strategy with sensitivity for the people with whom they work.  Ralph understood that compassion does not dilute a leader’s strength. It complements it. Humility is not a weakness, but it is a sign of confidence. All leaders make unavoidable difficult decisions.  Ralph made many, but he never lost sight of such decisions on people.

His recent death in Dublin, Ireland while continuing his credit union work with Irish and British credit unions was stunning. It is difficult to conceive the loss of such a vibrant individual who played an instrumental role in credit union modernization. To those who worked with him through his long commitment to the mission of credit unions, he will always be remembered with great fondness and deep respect as an exceptional person and an astoundingly skilled leader.

These personal attributes made him a leader who earned the admiration and respect of credit unions worldwide. He will be missed.

(Editor’s Note:  Ralph was succeeded by former democratic congressman Dan Mica as President and CEO in July 1996.  This leadership choice resulted in moving the CUNA President’s principal office to Washington DC. Political lobbying became CUNA’s primary activity.)