By Frank J. Diekmann
As 2023 wraps and we prepare to head into an election year (that I’m confident we’re all looking forward to!), here are some highlights, low lights, Matrix Moments, advice, humor, insights, baffling moments and a reminder about forecasting I gathered this year that are worth a moment or two of your time before we get to ’24.
You’d Like to Think It’s Implied, But…
During 2023 CUToday.info received a press release announcing a credit union would be holding a Kids Day for its “youth members.” I like to think that’s implied, but I realize for some, it’s not.
A Reflection on a Matrix Moment in Life
“Matrix Moments” have entered the lexicon thanks to the trilogy of movies to refer to a couple of things, including those moments in life when it appears there is a glitch in the software. In the pre-hashtag world before Keanu Reeves came along and they became a thing, such moments were known as strange and unlikely coincidences.
The passing of one former CU leader this year reminded me of one of the strangest coincidences of my career. I was flying out of Palm Beach International Airport when the guy sitting next to me noticed I had a credit union-related bag and he introduced himself. It was Lary McCants, the CEO of what was then IBM Southeast Credit Union (now iTHINK Financial CU). That would have been coincidence enough. But what pushed this into Neo and friends territory was that at that very moment I was editing a story on my laptop. The story was an interview with Lary McCants.
Mr. McCants passed away in mid-2023 after retiring in 2014.
From the Matrix II
At one 2023 NCUA board meeting, among the guests at the agency’s Alexandria, Va. headquarters were representatives of New Mexico’s state regulatory agency. NCUA Vice Chairman Kyle Hauptman, who was appearing at the meeting virtually, noted with some irony that he wasn’t there because he was in, yes, New Mexico.
Sort of a Compliment?
John Bratsakis, president and CEO of the Maryland & DC Credit Union Association recalled that when he was younger he was an aspiring football player, in this case a 5’7”, 170-pound defensive lineman. Bratsakis recalled a former coach telling him, “I can’t win without you, but I can’t win with 11 of you, either.”
Coming Full Circle
Few speakers at CU events have ever come as full circle as Dr. Frederick Pellum, who was among the presenters to the African-American Credit Union Coalition’s annual meeting at Stone Mountain, Ga.
Pellum grew up in the Atlanta area and his mother was close friends with AACUC CEO Renee Sattiewhite, whom his own mother refers to as Pellum’s “bonus mama.”
Today, Dr. Pellum has a background in digital media and taught for 11 years at the University of Miami, before he left because he believed significant amounts of information on finances and money were not reaching many people in the country, especially African-Americans.
But before he got to any of that distinguished work, he had another early job. When he was 17, he was asked by Sattiewhite to help stuff some bags for, yes, an AACUC meeting.
He said the bag-stuffing came with another benefit. After other jobs working outside in the oppressive Georgia heat, he shared, “That’s when I realized I could get compensated for doing something inside.”
Two Other Observations
Pellum also later observed the fact the meeting was being held in Stone Mountain also had some significance for him, sharing that the “first time I was ever called a racial slur was in this city.”
As for passing along a lesson he has learned, he told the meeting, “We have a saying in finance that if you take the five people you listen to most, add up their incomes and divide by five, your income will be somewhere in the middle.”
Pellum’s full comments can be found here.
Hey, Vendors, Listen Up
At numerous CU gatherings during this year (and, for that matter, every year) I listened as group discussions veered into vendor relationships, and it’s never because because everyone at the table wants to share a happy stories and five-star reviews.
Said one person during an open forum, offering up her advice for any vendors who might be within earshot, “Understand the credit union. Don’t just call us to say, ‘We’re going to charge you per member, per month'.” That drew some applause.
Two other CU audience member statements that drew a fair amount of clapping (and some laughs):
- “Hey , fintechs, looking to provide a solution? Solve fraud.”
- “Here’s an operational issue for a fintech to solve. Disputes are a big area where there are a lot of violations and risk. Can you do anything to help us manage that risk?
I’ll Just Sit Here Quietly While You Roast These Other Guys
With few exceptions, no one wants to be called before Congress to testify, but if you ever are called, you will want to have the kind of year NCUA Chairman Todd Harper had this year.
Harper had to testify four times during 2023, appearing before the House and Senate twice each as part of the respective semi-annual reviews of the regulatory agencies.
Members of Congress often use these hearings to grandstand and to throw some red meat back to their political patrons by asking questions on behalf of various lobbying groups. In the past that has always included various House members and senators asking, on behalf of the banking industry, some hard questions of the credit union representative sitting before them. But sometimes other events in the news change the agenda.
In the first half of the year Harper was part of a panel that included representatives from the Fed, the OCC and the FDIC. As the hearing was taking place in the wake of the failures of Silicon Bank, Signature Bank and others at a cost of billions of dollars to the bank insurance fund, Harper had to only read his opening statement and then sit back while his fellow regulators took their turns on the barbecue.
In the second half of the year Harper was back with his regulatory brethren, and this time around they were testifying just days after an explosive expose in the Wall Street Journal alleging a “toxic, sexualized boys club” at the FDIC. And once again, for Harper it was make statement, sit back, and watch anything related to credit unions disappear in all the barbecue smoke.
CUs Vs. Banks Vs. Fintechs
Observed by John Clausen, partner with Mendon Ventures Partners, during the VentureTech meeting in Frisco, Texas: “I wouldn’t say banks have any advantage over credit unions when it comes to technology. If you’re way too big you get mired in internal politics and bureaucracy and you move at way-too-glacial a speed. There are arguments that credit unions are fast actors and pull the trigger faster. But guess what? You’re all slow to the fintechs moving in. And to regulators, you’re going way too fast.”
You Should See The Names We Rejected
During that same VentureTech meeting, which has soared in attendance since its creation, one of the fintechs that made its pitch to credit unions was a Brooklyn-based company called Frich.
Frich offers products and financial literacy tools to help credit unions acquire younger member with a co-branded product, especially on college campuses.
It’s name is an abbreviation for ‘F’in Rich.”
Your Call Is Important to Us
To make his point about what credit unions hear when they call the agency’s Central Liquidity Facility office, NCUA Vice Chairman Kyle Hauptman live-called the CLF during a board meeting. He was put on hold. He asked that there be a recorded message shared indicating the call would be answered.
Not a Niche
At the same board meeting, Hauptman also observed that of the approximately 4,712 credit unions in the U.S., roughly 2,900 are under $100 million in assets. “Small credit unions aren’t a niche in the industry, they essentially are the industry,” he said.
Same Burden, Wrong Beast
Consumer compliance issues have been a focus of NCUA Chairman Todd Harper, but as he spent all of 2023 as the lone Democrat on the board, he wasn’t able to go as far with his agenda as he has indicated he would like (Democrats will soon hold a 2-1 board majorit with new member Tonya Otsuka replacing Rodney Hood).
During one board meeting Harper shared that consumer compliance issues found in one-in-every-six credit union exams have been referred to the Justice Department for Fair Lending violations.
Given the 2-1 Republican majority on the board this year, credit unions really served up some subtle pushback in 2023 against the focus on expanded consumer compliance. (Depending on Otsuka’s position on the issue, the CU trades may be much less subtle in 2024.)
Until then, this year, Carrie Hunt, who is exiting her job as CEO of the Virginia CU League to join the new trade group being formed by the merger of CUNA and NAFCU, told the budget hearing hosted by NCUA that there is no need for even more scrutiny, as the agency’s exam manual already covers 20 separate consumer regulations with which CUs must comply.
“Credit unions rarely fail or consolidate due to dissatisfied members or consumer compliance issues,” said Hunt. “However, they do struggle under the weight of an increasing compliance burden and regulatory overreach.”
They Take That Off the Grid Stuff Seriously
One consumer survey found that when people were asked which payment methods they had used for in-person, in-store purchases in the last six months, 2% of respondents said they hadn’t made an in-store purchase.
Now We’re Curious
The Indiana Gazette headlined one article this year, “Answers to Your Questions on Credit Unions, Banks and Deadbeat Parents.”
Was No One Watching the Trend Line?
One credit union that merged this year had approximately 836 members, reported a net loss that was one-eighth its asset size--$495,477—and had a paltry 2.31% capital ratio. How did it ever get to that point?
Why is That Your Measuring Stick?
We see lots of credit unions that are crossing state lines in mergers, and now a few that are crossing the country. One CU that concluded a merger giving it operations on both U.S. coasts by announcing the move is part of a bigger effort to become a “a nationally recognized credit union.”
Why is that the criterion for success? Shouldn’t it be about improving the financial lives of members, regardless of the field of membership or where they are located? Too often we see credit union messages that seem to be aimed at other credit unions, not the community or even the membership.
As I have written here before, if I could change one thing about merger announcements (and my list is much longer than one item), it would be that they not even mention asset size, but instead focus on how much money/benefit they will save/provide members as a result. And then back it up.
New Year, New Job?
Looking to change jobs in 2024? A study released in 2023 of monthly Google searches for jobs within the financial industry found searches for “auditor” ranked number-one on the list. “People are searching 5,000 times on average a month for ‘auditor jobs’ and 500 times for ‘auditor careers’,” CMC Markets stated, adding it found just 785 auditor jobs in the finance sector on Indeed at the time of its review.
Actuarial careers came closely behind as the second-most sought-after job in finance, followed “corporate banking,” bank teller and compliance officer.
It Repossesses Itself
During 2023 the United States Patent and Trademark Office reported Ford is considering a system that would allow a car, on its own, to leave the vehicle owner/borrower if the borrower stops making their monthly auto payments. The patent applies to self-driving vehicles.
As CNN reported, the patent hasn’t been approved yet and Ford insists it’s just a thought.
The patent also notes a borrower might need to drive to work in order to earn the money to pay back the loan, so the car could be restricted to allow itself only to be taken to work and, maybe, to allow the owner to buy groceries or drop the kids off at school.
It’s in the Name
Capital Credit Union this year became the presenting sponsor of the new outfield slide that is the signature piece of the renovations at Fox Cities Stadium. Seems fitting, since the credit union is located in Grand Chute, Wis.
They’re Fed Up—and Confused
A consumer survey from WalletHub found nearly three in four Americans are fed up with hearing about the Fed. In addition, more than one-in-three people admitted they don’t understand why the Fed raises interest rates.
What’s Old is New Again
An old-fashioned method for saving money made a comeback this year. With the hashtag #CashStuffing, Tik Tok videos extolling the old-school method of saving by putting money into envelopes marked for various purposes saw more than 900 million views.
As one person told Yahoo Finance (and in a reminder to CUs of how great the need is for fundamental financial education), "I was like, I need to somehow use my own money to pay off the tuition so I won't be in too much debt. I realized that I had no idea how to do that, because I just didn't know how much money I had. I would swipe my card, and I would just kind of cross my fingers and hope that it wouldn't be declined."
As CUToday.info reported here, BECU in Seattle has taken the old paper approach and added a modern twist with its new “digital envelopes” offering.
The Patron Saint of Inclusivity
Saints Margaret and Gregory FCU in South Euclid, Ohio, fittingly merged into All Saints FCU in Parma, Ohio.
HR Could Use Some Help From…HR
It take a special person to work in human resources, mostly because of the human part.
Among some of what I heard at a HR meeting this year:
- A CU MSR working an ITM from home had two children, seven and two. When she went to attend to the two-year-old, the seven-year-old sat down at her workstation and begin interacting with a member at the drive-through.
- One HR leader shared that their credit union was holding training and two employees said they couldn’t make it due to “other obligations.” The other obligations in this case were other jobs. The CU told both they needed to make a decision on which job to prioritize. One person chose the CU, the other went with Uber Eats.
- From the No Good Deeds Goes… Department. A credit union that held a free cookout for employees was met with complaints from some, who asked if they had to be there, whether they would get paid and if alcohol would be available. Then at the cookout itself one person fell and it became a workman’s comp case.
- If alcohol is served at a credit union event, it’s smart to have Ubers waiting, one CU advised.
- One organization shared the story of attempting to promote several workers who opted to turn down the improved titles and pay because the job involved coming into the office full time.
- Tired of meetings? One credit union shared that it has a No Meetings Fridays policy in order to “achieve the actionables” discussed at meetings earlier in the week.
- One credit union reported some success with an internal app that lets employees make schedule swaps themselves.
Two Worth Remembering
Two pieces of advice I heard shared during 2023 that you should take into 2024:
- “If you’re not sure if something is going to work, call it a pilot. And then you can just say it was an experiment if it failed.”
- “If employee feedback is really ongoing, a termination should never be a surprise and a resignation should never be a surprise.”
The Dismal Science Sometimes is a Dismal Forecast
Looking back through some reporting from CUToday.info in September of 2020, I found this headline, “Fed Indicates Rates Will Remain Low Through At Least 2023.” The lead to the story: “WASHINGTON—Credit unions can prepare for low rates to continue through 2023, according to new projections released by the Federal Reserve.”
If you took that advice, we apologize to your ALCO and urge caution as we head into the new year.
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of several new book, including the brand new “The Last Lyric,” a humorous satire about a murder investigation at the Rock & Roll Hall of Fame in which every line of dialogue is either a classic pop/rock song title or lyric. Available on Amazon, Apple iBook, Barnes & Noble and Smashwords. Mr. Diekmann is also author of a non-fiction compilation of the very best & worst he has seen and heard in covering more than 500 CU meetings and conferences, “501 Name Tags: How Everything You Need to Know About Business Can Be Learned at a Conference & Forgotten in the Trade Show.” It is available on Amazon, Barnes & Noble, Apple, Lulu, and Smashwords.