TAMPA, Fla.—Bill Hampel believes he just left the best job within the credit union movement–at least for him.
The former chief economist and chief policy officer at CUNA retired in August, telling CUToday.info that his role was the perfect combination—doing the same things often and then facing new challenges, all within an industry that left him feeling good when he went home at the end of each day.
Hampel, who was CUNA’s interim CEO prior to the hiring of Jim Nussle, spoke with CUToday.info about his career, what CUNA does for its members, and the plight of small credit unions.
CUToday.info: What stands out to you about your role at CUNA?
Bill Hampel: I think I had the best job in the credit union movement because it was the combination of more or less doing the same job for 39 years, but also getting to do a lot of new things. I started as a junior, wet-behind-the-ears, economist and ended up chief economist. So, I was an economist the whole time.
Beyond the things that stayed the same, the infrastructure of the job brought new and interesting stuff each year. The first big issue I dealt with was the 12% loan ceiling. Up until late ’70s, credit unions could only charge as much as 12% on a loan.
Back then T-bill rates were about 16%, and people were taking out loans from credit unions at 12% and walking across the street to the bank, depositing the money and earning 16%.
While there were so many unique issues I worked on over the years, there are a number that stand out. A couple years ago I was heavily involved in the work of restructuring the CUNA/league system, and the year before that it was GSE reform.
In the last year I had been engaged in work to address the Corporate Stabilization Fund and getting refunds back to credit unions, as well as work on the CU Ledger (blockchain) project.
And, going well back, of course, there was HR 1151, and all the work we did to get (the Credit Union Membership Access Act) passed. We dropped everything for a while to work on that.
So, sort of the same job, but each year I got to become a temporary dilettante, not expert per se, and dove in and learned a lot about a new issue.
CUToday.info: What did you like most about your role?
Hampel: I always liked working in the cooperative structure. Credit unions work for the betterment of their members, while most other businesses see their primary responsibility as serving their stockholders. But that thinking sometimes treads on the interests of their customers. But credit unions don’t do that. That made me feel good when I went home each night. While I was not working for a charity, I was working for a group of organizations that do pretty decent stuff for people. That made my job fulfilling.
CUToday.info: How do you think CUNA performed for CUs over the years?
Hampel: Much better than credit unions understand it has. Part of the reason is the way CUNA operates. It does less to toot its own horn and more to just get its job done. I worked in the Washington office for many years, and there are people there dedicated to what they do, working hard to do what is right for credit unions.
But they spend all their time doing what’s right for credit unions and don’t spend much time telling member credit unions how much great work they are doing for c
Bill Hampel
redit unions and their members. That is just not in our culture.
Also, what some credit unions don’t understand is that in Washington, some things have to be done very quietly. For example, if we get a member of Congress to support a position, or get a regulatory authority to take a position that credit unions want, sometimes it’s best for us to let them take the credit. They have constituents, they need to get reelected. If CUNA were to come out and say we twisted Rep. Joe Smith’s arm and he got this done for us, Joe likely won’t do anything for us next time we need him.
The other reason credit unions may not appreciate all that CUNA does for them is that for many of my nearly 40 years at the trade association, credit unions belonged to their leagues, they did not belong to CUNA. About 20 years ago we changed that, through what we called the Renewal Project, so credit unions could have direct membership with CUNA. But, still, most of their contact was with their league. So, for most of its history, CUNA has been a wholesale association rather than a retail association. We get things done in Washington quietly and move on.
For those reasons, some credit unions may not appreciate all that we have been doing for them.
CUToday.info: What is the future of the movement?
Hampel: When I came to credit unions 40 years ago they had already been around for 60 years. The movement is more than 100 years old and I have not seen any signs of it losing any steam. In fact, it’s pretty vibrant right now—picking up market share as more people discover the value of credit unions. The financial crisis 10 years ago clearly demonstrated the difference between big commercial banks and credit unions, and people started looking for alternatives. We are picking up share in the mortgage market, auto lending market, consumer loan market, household savings market—none of this is an indication of a dying industry.
CUToday.info: But what about small and even mid-size credit unions; we know many are struggling?
Hampel: Yes, that is a different story. The credit union system, as an aggregate, is doing very well. When we add up all the numbers we see the growth and performance is dominated by the top 1,000 to 2,000 credit unions. The next 4,000 credit unions don’t have that many assets and members, therefore they don’t drive the national averages. They are having a much tougher time of it, and really for reasons beyond their control.
The biggest issues facing the smaller credit union is technology. Just the table stakes to be in the game to be able offer the full portfolio of convenient, electronically provided products and services most consumers now want from financial institutions, is a struggle for them. These technology costs are fairly fixed—if you are a $10-million credit or $1-billion credit union this type pf technology cost is not that much different for each.
The bigger credit unions can spread technology costs across more members. Not only does that make technology more affordable for them, they can afford the best solutions, whereas the smaller credit unions struggle to pay for this, and they generally can afford only entry-level solutions. In the language of economics, technology has expanded economies of scale, meaning increased the advantage of being larger than smaller.
The other big issue facing smaller credit unions is the increased regulatory burden borne out of Dodd-Frank. This is a cost, again, that larger credit unions can spread across more members. They have the bigger compliance staff they can just dedicate to a new regulation—drop everything and spend a few months on it. Or they can hire an outside consultant. A small credit union can’t do either of those things. And, the small credit union CEO is already wearing five hats, so this stretches small credit unions even thinner.
The good news with compliance is that the real costs for addressing new regulations is in the first few years of a new rule. We have basically digested most of the new rules coming out of Dodd-Frank, so costs are going down. Also, I think we are entering a period of reduced regulatory burden.
All this does not mean there is not hope for small credit unions, it’s just more difficult for them. So on the technology side they need to collaborate with each other more than they have in the past.
CUToday.info: You were CUNA’s interim president and CEO for a period, following Bill Cheney and before Jim Nussle. What was it like to lead the trade group?
Hampel: That was three years ago, and I was interim president for about five-and-a-half months. It was an eye-opener. Just the number of issues that came through you and the size of the decisions that you had to make. It as a quantum leap from what I had to do before.
One big thing I learned in those five months was to be a better delegator. As an encomiast and chief policy officer, if someone asks me a question I think someone wants me to answer it. When someone asks the CEO a question, what they are really doing is asking the organization. So, you get the appropriate staff within the organization to respond as opposed to responding to the answer yourself.
In addition, as CEO, I was getting a lot more questions for which there were a lot more people in the organization more qualified than me to answer.
CUToday.info: What will you do now that you are retired?
Hampel: We just moved from Washington, D.C., to Tampa. My son, Alan, got married, so now there is the possibility of grandchildren. Alan lives in Tampa, so my wife, Diane, told me a while ago we were moving to Tampa.
I am consulting with credit unions post-CUNA, and I will continue that. But on the non-professional side I want to do two things. First, I want to become fluent in Spanish because I want to watch Spanish movies without subtitles. My favorite move director is from Spain. I play the piano, and I want to get back into doing more of that, as well.
One thing I won’t be doing is playing golf. That won’t work for me. Life is too short to play golf.