By Frank J. Diekmann
On a near daily basis I receive an email or a LinkedIn update about some credit union’s new CEO, and each one comes complete with the shiny new hire’s credentials, including a school classroom-like alphabet after their names just to make clear how qualified they are for the job, the CCUEs and CCEs and MBAs and CPAs and the like.
All those designations are worthy and in many cases reflect years of postgraduate work. But what about this one: CUTB—Credit Union Torch Bearer? In other words, now that the Olympics don’t need it for two more years, who’s going to pick up the credit union torch?
I found myself wondering about that recently while sitting on a metal folding chair in the semi-dark amid stacks of audio and visual equipment and a spaghetti of cables backstage in Las Vegas as Jim Blaine, the retiring CEO of State Employees Credit Union, was speaking to the Directors and CEOs Leadership Conference. (First sign speakers don’t get to pick there speaking slot is that I had the unenviable task of following him.)
Blaine’s mark on credit unions has been well documented, including by CUToday.info here and here. But what made his remarks in Las Vegas so interesting was much more about what he didn’t say than what he did, which you can read about here.
Consider this: the career arc of Blaine and his peers is unlikely to ever be seen again in the U.S. CU movement. Blaine took over in 1979 when most CUs were located “at work,” credit unions didn’t offer checking, and what would eventually be known as the “Cadillac Club,” that is CUs with a billion dollars in assets, had no members. Blaine’s own CU at the time he started had $300 million in assets; today it has $34 billion (for you new CEOs, that’s the direction you want your assets to go. You’re welcome).
Avoiding The Temptation
Along the way he and other credit union leaders pioneered a wave of new stuff credit unions had never before offered, navigated recessions, booms, busts, and booms again, watched the word “overlap” go from meaning nothing more than where you used to hold a book (a book!) to becoming an accepted reality among CUs, and helped turn the little financial co-ops that had always been viewed as exclusive club-like operations into a full-fledged financial institutions where a third of the U.S. population now belongs. And they all, of course, lived through Y2K.
Through all that many of Blaine’s generation—although certainly not all—managed to never give into the tempting belief that what a credit union is all about has anything at all to do with products or services or branches or branding or core processing solutions.
At the Directors and CEOs Convention, Blaine, who told me he will not be showing up at any CU meetings once he’s out the door, could have easily talked of how the future is all about ratios or technology or the increasingly buzzy analytics/big data that fills every meeting’s agenda, but he didn’t do any of that. Instead, he stressed basic old credit union fundamentals.
Indeed, he even said he was purposely avoiding the topic that’s on more CU conference menus than the chicken breast lunch, the “M” word, saying only that when it comes to Millennials, “On their behalf I think it’s very dangerous for any group to be profiling, race gender or age. So my experience has always been that in all those groups they have always been very different.”
Yes, It's Fundamental, But...
Blaine conceded his audience might find his message to be “too fundamental. But at points in life we get confused over what’s up and what’s down, and at some point we forget what our lives are all about. I think the same thing is happening in credit unions, and we need to step back from regulation and compliance and mobile and Millennials and take a look at the core ideas, and see if we are in trouble and, if we are, how we might rectify that situation.”
Blaine, who said no one at SECU, himself included, has a growth target or an incentive package, urged CUs to not let any other providers get between them and their members, and to keep things simple—which is why SECU has just one, plain checking account and doesn’t do indirect lending.
Whether a credit union has $34 billion in assets or $34 million, all share the same, single, sustainable competitive advantage, he told the more than 1,000 people on hand.
“Trust. That’s all you got. What doesn’t Walmart have? They’re not attached to their neighborhoods anymore,” Blaine said. “But trust is a slippery slope. Distrust is the other side. You’re either have one or the other with your members. Trust was the original model. We got together with our peers, whom we trusted, in the labor union or post office or factory, and decided to loan money to one another. We need to return to that model.”
For those who still don’t get it, Blaine made clear he believes every CU PowerPoint presentation should have just one slide: “Your mission going forward,” he said, “is to do the right thing.”
The Great Challenge Now
I wonder how many have paused to really realize just how much the credit union community is going to miss Jim Blaine and others of his generation of credit union leaders who have turned their titles over to new, younger people. They are taking with them a connection to the roots of financial co-ops in the U.S.
Blaine shared that what got him into credit unions and what held his passion through his long career was that it always bothered him how much those who have the least must pay the most for financial services.
The great challenge for Millennials has nothing to do with awareness or compliance or apps or delivery channels: the challenge now is for the Millennial generation of credit union leaders to prove that roots can foster new shoots and flower in new ways, all while doing the “right thing.”
There’s a torch to be picked up. Grab the wrong end and you’ll get burned. But grab the right end and you’ll shine a light for those behind you. Who’s going to pick it up? Who’s going to put the CUTB behind their names?
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.info or found on Twitter @FrankCUToday.