Wednesday, May 1, 2013

Credit Unions—Courting a Destiny of Failure?


(Originally published in January 2013 on CUinsight 


For some time now, I've had this nagging notion that all is not right in credit union land. It's been bugging me to no end and so it's about time I get this concern off my chest.

What I'm going to say may, for many, strike at the very heart of the credit union business model which I so respect. Yet, I realize I'll have to risk arousing the ire of industry associates and friends in raising the issue but, hopefully, they, too, will see the validity of my concern. Perhaps some will even respond by sharing their views for the benefit of us all.

What’s gnawing at me? I’m concerned that credit unions, as financial cooperatives, might be headed toward a destiny of failure. I fear they are moving in a direction that will eventually see them become exactly the same as their for-profit banking counterparts and this prompts me to wonder what is the threshold, which when crossed, determines that the credit union is no longer a “credit union.” Is it merely the charter that defines such an identity or does it depend on something much more pervasive?

For instance, when a couple is given their divorce decree, is it the decree that actually dissolves their marriage bond or was it of the couple’s own personal doing, months and possibly years before such a decree is ever issued?

Friday, April 19, 2013

The Credit Union Difference—One of Principles, Not Profits


Back in mid-March, the Credit Union Times carried a front page story on Chip Filson and his petition for NCUA board members to be motivated by the unique contributions and needs of a cooperative business.

The article included comments from several credit union executives, two of which struck a chord with me. One was Randy Karnes, CEO of CU Answers, who said Congress didn’t create the credit union charter because the nation needed “nice banks.” He pointed to the cooperative principles as the defining element which makes the structure of credit unions different from banks.

Henry Meier, associate general counsel for the Credit Union Association of New York was the second. Henry suggested that those advocating for the cooperative structure to play a larger role in the credit union industry seem to be promoting it for its own sake.

Hearing the comments of both executives took me back down memory lane into the corporate credit union environment. There, as I rubbed elbows with right-brainers and left brainers alike, I began to realize more and more how important it was to find a course of harmony between the cooperative principles and the principles of asset/liability management, if a credit union was to be truly faithful to its “soul” purpose.

Tuesday, March 12, 2013

Another Tax Break for the Wealthy!


Something is wrong, absolutely seriously wrong in our beloved United States—and I do mean, SERIOUSLY WRONG!

Just a few minutes ago on the radio, I heard the news that Republicans in Congress are putting together their version of a plan to balance the budget. And what do you think that plan calls for once again? Yes, another tax break for the wealthy!

Now, I’m not out to attack the Republicans. As a nonpartisan, I claim affiliation with no political party. BUT, what am I to think after hearing the news this morning that the push is on once again to give a tax break to the very rich? It simply gets my dander in a fluff. What on earth are these lawmakers thinking? Have they taken up residence in the back pockets of the one-percent?

Here’s the reason why I am so miffed when I hear that any politician wants to give the wealthy another break while the middle class along with the downcast and underserved continue to get chewed up, spat out and trodden on.

Tuesday, February 26, 2013

3 Lessons From the Vatican: Know When to Hang Up the Mitre


This week, the world will witness an event that has not occurred since the year 1415—a Pope stepping down from the Papacy.

Although we all watched his predecessor grow more frail and disabled during the final years of his papacy, Benedict XVI has decided to spare the world audience the repeat performance of witnessing the same debilitation take hold of him during his reign. He has chosen to abdicate the Papal Office on the grounds that he is becoming unable to measure up to its many responsibilities.

Of course, while some may disagree, reigning as Pope is like night and day in comparison to serving as a credit union executive, volunteer or CEO. Nevertheless, we ought to ask ourselves if there is a lesson we can all learn from Pope Benedict, a man to whom the keys of St. Peter have been entrusted. Can one find in this historic gesture a particularly meaningful take-away.

As I avidly read the news surrounding Benedict’s upcoming abdication and follow the stirrings underway in preparation for a Papal Conclave tasked with electing his successor, I see three lessons of value for all of us who hold a position of influence and leadership.

1) Know your limitations
- Be cognizant of the demands required by the office you hold and be honest with yourself about your personal capabilities in meeting them. 

Today’s world is quite different from the ‘60s of the last century. Credit unions continue to evolve, growing in technology and service offerings as they strive to meet the demands of a highly sophisticated financial services marketplace. Keeping abreast of all the changes in regulations, delivery channels and consumer needs can be, without a doubt, an overwhelming task. And, to further compound one’s effort to meet all these challenges on a daily basis is age and one’s ability to run the race. Age should not be seen as a game-ender. I prefer to view it as a game-changer.

There comes a point when we need to be honest with ourselves in realizing that the demands of the game require a finesse and agility best suited to someone else. That absolutely is not to say it’s all over, rather, it’s simply the recognition that one can accomplish more from the third-base coaching box rather than the batter’s box.

For example, consider any of the greatest pitchers in baseball. For them, throwing smoke was not the same 10 or 15 years into their career. There comes a point when the smoke starts to become a whiff. So then what happens? Acknowledging the realities of the situation, they simply continue the game but in a different manner—becoming a pitching coach, going on a speaker’s tour for Major League Baseball or maybe even sailing around the world.

2) It's all about the organization; not you
- Realize the role you play is that of a leader, inspiring others by both word and deed. It's not about your success and personal record book rather, it's about the team and what's best for it.

In his resignation announcement, Pope Benedict cited the demands associated with the Papacy. Realizing his growing inability to meet all those demands, he concluded that remaining in office would be detrimental to the health and welfare of the church. One surely has to admire him for such virtue.

Benedict may not have accomplished all he had hoped to do as Pope. Some may even view his “record book” as being short on achievements or tainted by all the challenges facing the church. Of course, only time will reveal the actual reasons that influenced his decision to abdicate. However, one cannot deny his role in ecclesial history for deciding to put the Papacy and needs of the church before his own.

If a Pope can step down from office, then one must ask why it is that others find it to be an unacceptable option when it becomes apparent that the required vigor to do the job is no longer present.

3) Finish strong
- End your biography on a high-note. Then immediately start working on a sequel.

Remember Johnny Unitas of the Baltimore Colts back in the sixties and seventies? He happens to be one of my all-time football favorites. He was a record-setting quarterback, selected as the league’s most valuable player in 1959, 1964 and 1967. His overall achievements list him as one of the greatest NFL players of all time.

When I think of Johnny I can’t help but recall his numerous face-offs against Broadway Joe Namath of the New York Jets. My most savory memory however is Super Bowl V, a championship he clenched in the waning years of his career. I remember all the talk back then. Reporters and analysts alike all wondered if Johnny’s Super Bowl V win would be the crowning highlight of his career. Will he now decide to retire? Yes, I certainly remember the chatter because as my favorite football star, I had a vested interest in Johnny and did not want to see him move on.

Instead, what followed was anticlimactic; a sad ending to the career of a player I revered as a legend. I watched as Johnny decided to push on, be traded to the San Diego Chargers in ’73 and after a sad and lackluster year, fade into retirement in 1974. You see, along with my fond memories of Johnny is one that's most sad. It's a  memory of Johnny playing as a Charger and being badly sacked. It was painful.

As we watch Benedict XVI abdicate the Papacy this week, let’s all remember the primacy of the organization which we serve; the role we play in leading and inspiring others; the strengths and weaknesses associated with our humanity; and, the way we want our biographies to sum up our professional achievements.

Tuesday, January 1, 2013

DREAMS CAN COME TRUE IN 2013


This morning as I opened my eyes after a night of blissful dreams, I bid farewell to the holidays and set my gaze on a nascent new year and all that it might unfurl before me in the weeks and months to come. I pondered the lucky “13,” and wondered if life and its many experiences throughout 2013 would be any different from all years both past and to come.

As I got out of bed, and turned on the TV, I happened to catch one of the many commercials currently airing that promote America’s financial cooperatives—credit unions. The spot is part of a national branding campaign cooperatively managed and sponsored by credit union associations, credit union leagues, and food and electrical co-ops. It seems collaboration among all cooperatives has become the new norm, emerging from what many have discovered to be a golden opportunity for growth in both membership and services, coming of course, at the expense of corporations and big banks and the growing anger and mistrust consumers have of them.

Yes, life among cooperatives has changed dramatically. Now when I receive a check from any credit union organization and look at the name of the issuing financial institution, I no longer see the word, “bank.” Credit unions have not only learned to keep their money within the system, they also have come to realize that if they are to promote the value of their model over one benefitting shareholders, they ought to maintain their business checking accounts at another financial cooperative, not at a bank.

Credit unions and cooperatives are also applying the same mindset when it comes to staffing vacancies and selecting vendors. Going outside of the cooperative system no longer makes sense when there are already talented people within the system who bear allegiance to the cooperative business model and who are unemployed and eager to work. It’s no longer acceptable to look for products and services outside of the cooperative business model when there are already CUSOs and vendors within the system that can offer pricing and expert services exclusively aligned at meeting the needs of cooperatives. Why pay more and go outside of the system we now ask ourselves, when the same services or talent can be tapped from among credit unions and cooperatives at a much cheaper price and so many times at a value no one else can offer. 

In this new age of 2013, walking the talk has become the mantra for credit unions. We have seen that by holding ourselves ever more closely to the principles and values we espouse as a business model, we have finally not only discovered our true value proposition but have further developed a reputation for integrity and social justice within the American marketplace. And, it’s that reputation that’s attracting the attention and trust of consumers in ways that are startling Wall Street and inciting a new look at corporate America’s code of ethics . . .

BUZZZZZ, BUZZZZZ, BUZZZZZ. With a nice big yawn, I hit the snooze button and rolled over onto my side pondering the lucky “13,” and wondering if life and its many experiences throughout 2013 would be any different from all years both past and to come.

May all your dreams for 2013 come true! Happy New Year!