By Frank J. Diekmann
The passing of Ken Robinson is deserving of more than the tribute I am able to provide here.
Robinson was the steady hand as president leading NAFCU for many years, including during the tumultuous late 1990s when having the word “federal” in your name was tantamount to being called “doomed” and many had either made the move or were filling out the paperwork to become state charters.
Robinson was among those who were instrumental in winning the great battle to get the Credit Union Membership Access Act through Congress and signed by President Clinton in August of 1998—and in record time. Consider that CUs got this done in one Congress—they’ve been pushing for MBL relief for the last 20 years.
But perhaps the calm but firm hand of Robinson was there because he had seen much worse in a 33-year career in the Marine Corps, including serving in the Korean War. Outside credit unions, Robinson was better known as General Robinson, the rank at which he retired from the Marines. And yes, I know, no one retires from the Marines. (Until recently, credit unions used to draw regularly from the military for their leadership, which wasn’t surprising given the largest CUs were military based. General Herman Nickerson was the first NCUA “Administrator” and CUES was led for many years by Ret. Lt. Col. Fred Johnson. Only CUNA has avoided the military-to-management trend, perhaps because it claims to already have a grassroots army).
My most distinct memory of General Robinson was early in my career when he took time to take me aside and carefully but firmly explain the importance of balanced reporting in the media. Not being the quickest of studies, a little time passed before I realized what initially had impressed me as a broad-minded respect for the fundamentals of the Fourth Estate was actually his indirect way of saying NAFCU should not have to stand in CUNA’s shadow when it came to media coverage.
While Robinson had a personal stake in making the observation, he was also right, and I’ve always tried to be semper fi to his advice.
Where The Real ‘Inability’ Lies
Glenn Christensen of CEO Advisory Group, who has offered expert analysis to CUToday.info on mergers and authors a monthly column updating the latest merger numbers, observed in one of those recent columns that Delaware-based Chestnut Run FCU had opted for a merger into Louviers FCU due to “inability to obtain officials.” The $69-million CRFCU (which took with it one of the prettiest sounding CU names) had 10.5% capital and 0.1% delinquencies, so it was healthy—albeit in a challenging asset size peer group.
That said, no credit union should merge due to an ability to find either board members or, perhaps, management executives. The reason cited on its merger app shouldn’t read “inability to obtain officials;” it should read “inability/failure of board to look forward.” Yes, it can take some work to find new board members willing to volunteer their time, but plenty of credit unions do so. Get an affiliate board member program in place; make every board member responsible for finding at least two replacements; let some fresh air into the room.
If finding management was the problem, reach out to larger credit unions. There are plenty of talented people treading water in CU middle management who would champ at the bit for some real-life experience and broadened responsibilities. That makes for a win-win-win for all parties involved.
The same month that Chestnut Run opted to run no more Christensen reported that the median net worth ratio of the merging credit unions was 11.9%, and that just two CUs had net worth below 7%.
It’s not “inability” that kills a credit union; it’s unwillingness to think outside the box-shaped boardroom. And that’s too bad.
Trivia You’ll No Doubt Find Fascinating
Here are two pieces of trivia I learned recently courtesy of comments made during credit union meetings. Both are credit card-related, which should come in handy next time that’s a Jeopardy category.
With mag stripes on their way out on plastic cards, there’s an interesting story on how they ever got there in the first place. While working at IBM in 1960, Forrest Parry invented the magnetic stripe card for use by the U.S. Government. He had been gluing short pieces of magnetic tape to each plastic card, but the glue warped the card. At home one day, Parry explained the problem to his wife, Dorothea, who was using a flat iron to iron clothes as he was talking. She suggested he use the iron to melt the stripe onto the card. It worked. (It then took seven more years for the mag stripe credit card to come to market.)
Less fascinating in historic terms but much more relevant to the present, a representative of Lending Club recently told credit unions that the number-one reason people borrow from the fast-growing company is to refi credit card debt. Sounds like an enormous opportunity of the low-hanging fruit variety for those other lending clubs you might have heard something about.
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info or followed at @FrankCUToday.