Chip Filson
The Seated Boxer, an iconic ancient Greek work of art, shows a grizzled veteran of the ring, equal parts resigned and ready to spring into action.
What I like is a sense of respite from competition, the powerful athletic physique and the tiredness that surrounds his humanity. Is he a winner this day? Are there more fights to go? How will his efforts be remembered?
These are questions that all of us encounter, in literal or figurative ways, in our daily efforts.
Yesterday’s post described the growing disconnect between member-owners’ needs and credit union leadership priorities. Solidarity Link was an innovative way to close this divide.
Today’s post describes CEO McNeil’s analysis for change and how this example might impact the movement.
From conversations with CEO McNeil, I learned this program resulted from a deep concern that credit unions had departed from their cooperative roots. She believes that the essential system support structure has declined from the early years of chartering and institutional buildout. Today many credit unions believe they achieved their present position on their own and that future visions are similarly theirs alone to determine.
Without a shared appreciation for and the influence of a cooperative system, individual coops with rich legacies of capital and assets, are able to strike out independently. Regardless of the consequences for the welfare of the whole network.
The decline of cooperative system thinking has enormous potential for everyone concerned about the sustainability of a unique credit union financial option. Solidarity Link is an attempt to address this challenge.
This program resulted from an analysis of how credit unions had departed from their cooperative roots, United Trades included, and how to reintroduce cooperative design as the touchstone of decisions.
Last year, about 15% of members were laid off. Others saw hours reduced or traveled across the country to stay employed. The response was Solidarity Link: a year-long commitment to use the credit union’s earnings not to maximize financial performance, but to prioritize member well-being. Low-cost loans, small-dollar relief, and targeted resources for members going through hardship.
Financial services are dominated by provider logic. Institutions doing things for consumers. That logic runs deep, even inside credit unions. This isn’t charity or corporate philanthropy. It’s members helping members, with the credit union as the intermediary mechanism.
That framing challenges the assumption that financial success must always be the primary proof point for performance. There were questions. A break-even year wasn’t what people expected. Holding cooperative logic alongside financial logic requires intention.
United Trades is purposively acting as more than a financial institution, accepting that they are also a social institution. Community support takes many forms, and goodwill is never wasted.
But a cooperative’s most authentic expression is not what it gives to its community from a position of strength. It is how it stands with its members inside the conditions they actually face. Responding to real circumstances with real tradeoffs. Accepting that in some years the bottom line looks different because that’s what the moment required. That’s not a departure from sound management. That’s what it means to be a cooperative.
Through April, 119 members have been helped with approximately $77,000 in total support deployed. Many aren’t asking for help yet. They want to know it’s there. Others are deepening their relationship with the credit union not because they need assistance, but because they want to support others.
What we are observing is members who see what their coop can be. It’s their money. They don’t want to exploit each other. Further, that the cooperative self-help value is working the way it was always meant to. ‘People Helping People’ always meant mutual responsibility.
Reinvigorating purpose requires creativity and courage. Daring to invest up to a year’s earnings to reinvent the members’ understanding and to solidify trust is audacious.
But there is an even greater insight driving this effort. We live at a time of uncertainty due to many external factors, events and individual circumstance. Many are fearful about what’s next.
I believe Solidarity Link gives individuals something more precious than financial assistance. It is giving hope. “Hope is lived when it comes alive, when we go outside of ourselves and in joy and pain take part in the lives of others.” (Theologian Jurgen Moltmann}
The initiative is already creating further interest within United Trades membership and from other union locals learning about the program. The United Trades team and sponsor are excited, engaged and challenged to identify new member-centered value.
Another lesson is the role of the leadership team. It is critical in developing a culture that supports this reinvention of cooperatives as both a social and financial force for good.
I believe this example could capture the imagination and interest of persons who have never joined a credit union. Or even explain what the difference might be. Now they can see it for themselves.
This leadership example reminds us of Albert Schweitzer’s observation: “Example is not the main thing in influencing others. It is the only thing.”
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Garrison Keillor the creater of the Prairie Home Companion public radio show is still delivering his routine in one night stands around the country. He augments these live performances with occasional blogs and republishing The Writer’s Almanac prior daily broadcasts.
His observations about human behavior have meanng far beyond the Lake Wobgegon community. Recently he discussed how humor relies on personal delivery.
“Comedy is intimate. You poke them right, they laugh, it isn’t a conceptual problem. AI can create what sounds like jokes but they’re not funny. AI is going to take over banking and politics long before it takes over comedy.”
Following are two of his examoles of peole exchanging stories together::
“A cold day in Minnesota and the sign at the nudist camp was: We’re open but we’re clothed. And that led to one about the man who entered ten puns in a pun contest hoping one would win but no pun in ten did.” or,
“God calls him up and says, “The world is going to end in seven days.” And he tells Melania, “The bad news is that there is a God but the good news is that I won’t be impeached.”
The most vital cooperative advantage is the organization’s relationships with their members. It is the human connection not the number or amount of transactions that sustains an enterpreise.
Members know they can call and trust they will have a hearing while being being treaed as “kin folk” not just another customer.
Continuing to implement this difference, which evolved naturally in credit union’s founding years, is just as impotant to credit union union success now.
AI “manned” institutions may dominate financial transaction in the future, but AI cannot duplicated the cooperative adantage when fully embraced by a credit union’s leadership team.
But being a cooperative is not easy. As Keillor says everybody knows a joke or two, but only a small number in a group are real story tellers. For those who remember, consider how Bucky Sebastian brings life to any conversation. Ask him to tell how Ed Callahan went to the Burger King for lunch and asked for the quarter ounder special done his way!’
Tomorrow I will describe how a credit union is putting cooperative at the core of its business model. Like humor, it puts humans as the central story.
in anticipation of the required Annual Meeting, most credit union publish their reports for the prior year. Even NCUA issues a virtual document by Arpil 1 with audits and details of internal processes, albeit little about the state of the industry they were created to support.
How should these documents be evaluated? Are they only the financial stewardship of ;members’ resources similar to any other consumer financial choices? Or should there be an assessment of the cooperative dimension in their role with members?
I have been reviewing the 2025Annual Report and CEO presentation of a virtual Annual Meeting I wnat to attend this week. Here are some issues I would like to see discussed by the leaders:
An on the ground account following an election removing an authoritarian, corrupt leadership group. Caolin Robertson is an Irish born, national affairs reporter now living. in Ukraine. His knowledge of events and local production qualitt is first class. In this report he documents the sheer joy Hungary’s citizens felt after the national election ended the reign of Orban.
(https://www.youtube.com/watch?v=dnPIWfECiNI)
An a nostalgic look back.
(https://www.youtube.com/watch?v=lgCNOsSYP4I)
Two evenings ago I received an email from Scott Rose. This 25 year member of SAFE Credit Union had been prevented from speaking of his opposition to his credit union’s proposed merger with BECU. He had informed the leaders of his intention to speak at the annual meeting. Although the Chair recognized other members, he closed the meeting before allowing Scott to present his views even though aware of his intent.
Scott was infuriated. He disrupted the adjournment ploy, deeply angry and frustrated. He had prepared a thoughtful statement presenting his views on the proposed merger’s impact on the collective future of his 245,000 fellow member-owners.
His pain was real. It is the same deep emotion portrayed in David’s Psalm 52, The Deceitful Leader, opening stanza:
You cunning liar, why publicize your evil need to harm the good? Your slanderous tongue is razor sharp honed to fulfill malicious plans; You love the lie and hate the truth.
Following is the statement Scott wanted to deliver at the SAFE Annual meeting before being silenced by the Chair’s abrupt termination. Judge for yourself the gravity of the issues raised.
Chairman Blumenfeld, Board Members, CEO Nabhani, fellow attendees (Subheads Added)
As SAFE leadership is well aware, I have made clear my opposition to this ill-conceived transaction from Day 1. For those who do not know me, my name is Scott Rose and I have been a SAFE member for nearly 25 years. My sole interest today is to preserve SAFE Credit Union for future generations. I have no hidden agenda and no external financial interests.
The Board of Directors’ decision to terminate SAFE Credit Union’s 86 year old charter is a betrayal of our community. So is their plan to hand over all $4.4 billion in SAFE assets to Boeing Employees Credit Union.
The so-called “benefits” of this transaction, as cited earlier by Ms. Nabhani, pale in comparison to the irreparable losses that our community will endure if this deal goes through.
How can an organization seven times the size of SAFE possibly benefit our members and our communities?
For BECU, this deal is a gift. Free money! Who doesn’t like free? $4.4 billion in assets. $3.9 billion in member deposits! $400 million in member equity!
Why would our directors agree to such a lopsided transaction?
I have met with Ms. Nabhani on two separate occasions for a total of nearly five hours. During our discussions it became evident to me that SAFE leadership not only initiated and negotiated this merger in secret, but deliberately excluded any member participation.
Member opinions were not solicited, there were no surveys, and there was never any attempt to engage the membership. The sudden announcement of a merger last November caught every member by surprise.
What motivated our Board of Directors to pursue this deal remains a mystery to me. But what is obvious is that this board does not represent and cannot speak for the members.
Only three of the current directors were actual SAFE members when they were nominated and elected to the board. The other nine directors were not SAFE members in good standing, as required by SAFE bylaws, until just prior to their nominations. These actions deliberately circumvented SAFE bylaws with the clear intent to exclude actual SAFE members from participating in SAFE governance.
This fraudulent pattern of election manipulation has been occurring for more than a decade, and the current plan to terminate the SAFE Credit Union charter is a direct consequence of this corruption.
The pending consolidation of SAFE and BECU has drawn attention at the national level. BECU is now the fifth largest credit union in the country, and will become the fourth largest after the SAFE takeover. Many experts believe that credit union acquisitions like this will invite further scrutiny by regulators and accelerate recent congressional efforts to eliminate their tax-exempt status. But the truth is, if credit unions like BECU behave like banks, why should they be treated any differently?
Edward Filene was an entrepreneur who ran Filene’s department store from 1891 to 1928, but it was his pioneering effort to establish the credit union movement that is his most enduring achievement. Filene’s underlying philosophy was that a credit union is a member-owned cooperative that is legally and ethically obligated to act in the best interests of its members.
It is evident that SAFE leadership has chosen to disregard their fiduciary obligation to SAFE members by failing to act in their best interests.
On a separate subject, during my discussions with Ms. Nabhani, I noted that Beverly Anderson, current CEO of BECU, gained all of her financial experience as a commercial bank executive at Wells Fargo and American Express. This explains why she lacks an understanding of the cooperative credit union philosophy. Her professed motto of “people helping people” is a just cover for her true goal of expanding BECU’s market dominance by engaging in the same predatory behavior she perfected as a banker.
We have many huge commercial financial institutions and these are readily available to anyone who wants them. But those of us who truly support SAFE Credit Union want a local institution with Sacramento roots. We don’t need the likes of BECU invading our home turf and shutting down our credit union.
Thank you. (Subheads added)
This merger is a violation of every principle multiple generations invested to bring greater economic opportunity to the Sacramento community. This transaction converts members into victims of the very institution they built with their eight decades loyalty.
That is the cooperative way of always paying forward their legacy for the benefit of their children’s children
This transaction is a heartless betrayal motivated by greed. The CEO and Board signed a “definitive legal agreement” negotiated in secret with no member input, knowledge or involvement legally obligating this transfer of all SAFE’s resources-past, present and future. Then SAFE’s CEO issued a press release announcing the deal as all but done and providing no transparency of anything about the process.
There was no explanation why transferring all future operations to BECU was in members’ best interest. Or why the half dozen or more local California credit unions who would be more logical partners to expand member value and convenience were not approached. Nor what the CEO and board negotiated for themselves as the agents of this transfer.
This is not the free market at work. It is back office, private self-interested deal making to benefit insiders clothed in rhetorical promises without verifiable substance.
This is not economic freedom. Instead the 245,000 members’ financial relationships, the 800 employees’ jobs and all local investments are being transferred to the control of a leadership group that has no connection to, knowledge of, or experience in the Sacramento community. All $4.4 billion for free including $400 million member equity. The members are not owners, just customers to be bought and sold to whomever the Board chooses.
How Much Longer?
How long must members suffer in this current environment of private profiteering and community plundering of their mutual wealth and future well being?
This predatory destruction will continue as long as people of good will, courage and belief in cooperatives stay silent. For human greed has no limits. If the leaders of the movement don’t speak out, why should the public, regulators, legislators and loyal members care?
It is time for those who believe in democratic, not autocratic leadership of credit unions, to take a stand. Cooperative credit unions are an interdependent system. Seemingly individual actions will affect the future of all others.
It takes only a few to change the course of events, because that is how all revolutions against misuse of authority begin.
Place Scott’s speech in the public record, with the California Legislature, in the public media, in the Congressional Record. It is a stand made by a person of courage, principle and diligence. It should be in every league’s newsletter and given to every state and NCUA examiner by the credit union.
For if one member of conscience and sound judgment has the fortitude and bravery to stand up, surely those who believe in the principles of the cooperative option can follow his example. We call that democracy, a duty we all have if we want to really remain free.
An unusual poetic sensibility.
Just before the green begins there is the hint of green
a blush of color, and the red buds thicken
the ends of the maple’s branches and everything
is poised before the start of a new world,
which is really the same world
just moving forward from bud
to flower to blossom to fruit
to harvest to sweet sleep, and the roots
await the next signal, every signal
every call a miracle and the switchboard
is lighting up and the operators are
standing by in the pledge drive we’ve
all been listening to: Go make the call.
The example of Boeing Employees Credit Union two recent CEO selections proves the adage that most organizations are onlly two transitions from failure. Not just performance shortfalls, but more importantly the loss or founding purpose and the associated values and culture.
See post: When the Song Fades-Leadership Turnover and the Loss of Cooperative Identity. (Link)
Newly installed CEO’s espeically from outside an organization assume they have been chosen to give new direction from their external experiences, often without first understanding the resources they now direct.
The failures are not due to lack of talent, skills or knowledge, but rather a more fundamental gap, an inability to discern the foundation for the success they inherit. That shortcoming is especially vital in democratically designed organizations such as credit unions:
In democratic organization, It turns out, in the end, there’s only one institutional factor that actually matters: Good character. Everything else in a democratically governed system follows and relies on that simple foundation.
To put the current BECU leadership culture in perspective (link), here is a summary of the legacy that Gary Oakland created upon his retirement in 2012. From a press release by CUNA.
National Credit Union Foundation to Present Four Awards on February 24, 2014MADISON, WI (September 4, 2013) — In recognition of his visionary approach to leadership and extraordinary commitment to the credit union movement, the National Credit Union Foundation (NCUF) is pleased to announce Gary Oakland, retired President/CEO of BECU in Seattle, Wash., as a winners of the 2014 Herb Wegner Memorial Award for Lifetime Achievement.
“Gary is a slam dunk as a choice to bestow the Wegner Lifetime Achievement Award,” said John Gregoire, Chair of NCUF Wegner Awards Selection Committee. “Gary’s contributions to the credit union movement were so obvious as everything he touches turns to success for the average American consumer. It’s evident in the growth of BECU, the state supervision system, dual credit union chartering, Biz Kid$, NCUF, and much more. It’s also an honor to see Gary receiving the award rather than giving one.
Tireless Supporter of the Credit Union Movement
Over the course of his career, Oakland has supported the credit union movement in a myriad of ways. Those include serving on the board of the Credit Union National Association and as board chair for the Washington Credit Union League, the National Association of State Credit Union Supervisors (NASCUS), Filene Advisory Council and Board, and the National Credit Union Foundation. In his time as CEO of BECU, he guided the credit union to provide aid for more than a dozen low income credit unions across the country, often single-handedly locating the funds to keep his fellow members-first organizations afloat in times of hardship.
With his leadership, BECU was also able to play key roles in the founding of two low-income designate credit unions: TULIP Credit Union and Express Credit Union. Oakland also oversaw BECU’s creation of Prime Alliance (now Mortgage Cadence), a Credit Union Service Organization that provides mortgage solutions to approximately 600 credit unions.
“Until his recent retirement, [Gary] ably served as an intellectual thought leader on every important issue facing credit unions,” said Mary Martha Fortney, President and CEO of NASCUS. “Of particular note and importance are his dedication and efforts to make supplemental capital a reality for all natural person credit unions. We are seeing the result of Gary’s work on this issue today as supplemental capital in being considered on Capitol Hill.”
High-Impact Commitment to Member Value Oakland is hailed for his unfaltering dedication to improving value for the credit union member. Exemplifying the effect of this commitment, BECU grew from 108,000 members when he took on the position of CEO in 1986 to over 775,000 members at the time of his retirement in 2012.
Oakland was known for accommodating the needs of Boeing employees and providing guidance in responsible financial practices. He also led the credit union to a statewide field of membership to allow more members of the community to benefit from the credit union advantage: member-focused service with better rates and fewer fees.
While this growth trajectory could have changed the organization’s culture, Oakland held BECU true to its founding principles and the credit union philosophy of People Helping People. In 2006, BECU had an opportunity to return a portion of its reserves to its member base. He instated the Member Advantage account, which reversed the interest rate tiers, providing more return for smaller savings accounts and creating incentive to start saving at a time when U.S. savings rates were at or below 0.
“At the local level, Gary advocated for the member at every turn,” said Rae K. Miles, President of Innovative Resources, LLC. “He changed policy to help Boeing employees when they needed it most and led by example in promoted the importance of thrift to the membership. His ‘people helping people’ efforts went well beyond the membership of BECU.”
Biz Kid$ Spearhead
Among Oakland’s most influential accomplishments was the role he played in the launch of the PBS program, Biz Kid$, an award-winning financial education show for youth. Through leading the production initiative, committing $500,000 initially and $1 million over-all, bringing together a group of credit unions that raised $2.6 million per year, and ultimately making the project a possibility, Oakland has become the face associated with the show’s success.
After five seasons, Biz Kid$ has won 2 Emmy Awards and was nominated for 11 more. It claims nationwide recognition and makes a daily difference in the lives of its youth audiences.
“Had it not been for Gary’s effort, leadership, financial and personal commitment, [Biz Kid$] would never have happened,” said Rudy Hanley, President and CEO of SchoolsFirst FCU. “The result has been overwhelming. After five seasons, 13 Emmy nominations and 2 Emmy awards, the program is being delivered to millions of students through a variety of channels and participating organizations. The stature of the credit union brand has been greatly enhanced thanks to his vision and leadership.”
Steadfast Dedication to Employees
Amidst his countless other commitments and initiatives, Oakland still managed to earn the full respect and gratitude of his employees for his supportive and encouraging approach to leadership. He put his employees before himself and made concerted efforts to urge them to embrace personal and career growth opportunities. As a result of Gary’s compassion and attitude, BECU claims one of the lowest employee turnover rates in the industry and five former BECU employees are now CEOs of other credit unions.
“Gary understands that ‘People Helping People’ begins at home,” said Roger Mauldin, BECU Director. “It was always important to Gary that employees have a healthy work-life balance, be paid a fair wage, receive good benefits and know they are appreciated.”
“Man of Steel” Philanthropist
Described as a “Good Samaritan”, Oakland has left a legacy that extends the credit union philosophy well outside the credit union movement. He is known for his generosity and selflessness as well as a tendency to go above and beyond the call of duty.
In 1995, at a member’s suggestion, he led the establishment of the BECU Foundation, a chartered foundation that provides college scholarships to students who excel in academics, leadership and community service. Since its creation, the BECU Foundation has awarded more than $1.5 million to 715 students.
Oakland served on the Board of Seattle’s Neighborhood Children’s Club, helping many children get on the right track to a productive future, and has guided BECU to support a number of non-profit organizations that provide affordable housing, including Habitat for Humanity, Rebuilding Together, Impact Capital and Plymouth Housing.
“Gary has been a trailblazer and a most generous and dedicated philanthropist, both inside and outside of the credit union movement,” said Robert L. Coleman, Director of Northwest Baptist FCU. “Gary Oakland’s career was spent not only ensuring the absolute best for his membership, but also ensuring the success of those surrounding him.”
(emphasis added)
On April 13, CU Daily reported on a conversation that SAFE CU long time member Scott Rose had with the CEO Faye Nabhani. The article detailed Scott’s objections and the CEO’s response on SAFE’s new merger effort. (link)
The proposal to transfer control of the $4.4 billion SAFE and its 245,000 Sacramento area members to Boeing Employees Credit Union has had coverage in the local press (Sacramento BEE) and on blog sites. For example this post on SECU Just Asking lists four fundamental objections to the surrender of the state charter. It poses the question whether the California CU Regulator is Asheep at the Wheel? (link)
Much information has been provided by Scott and others about what this charter loss would cost SAFE members and the community. Less analysis has been provided about BECU’s leadership and financial trends. Nothing has been in the SAFE’s press releases about BECU’s performance, leadership culture, or strategy.
Last week I wrote a post describing BECU’s high cost culture resulting in an operating expense to asset ratio of 3.33%, much higher than the large credit unions in California. The nine BECU directors were paid an average compensation of $118,000 in 2024 with he Chair receiving $154,000. In California, state regulation prohibits director compensation which is the federal credit union legal situation
But what was new about the situation was the almost dozen responses to the CU Daily article by readers, They all describe a very disturbing leadership environment at BECU.
They report situations that only employees would be aware of. Have these issues been discussed by the SAFE board? Has there been any onsite due diligence? Is this a leadership culture that one would want in charge of 245,000 members’ future?
Whatever the full story might be, there is a lot more for members to know if their future should be put in hands of the BECU board and their
CEO’s recently arrived senior team.
Performative at best.
Glad these conversations are happening and that he’s asking the right questions—he’s pushing in the way more people should.
What’s becoming clear, though, is that the credit unions don’t really have strong answers—they just have strong PR. BECU, in particular, is very good at managing perception.
Underneath that, the leadership approach feels far more like a traditional bank than a credit union. The new CEO comes across as performative at best—saying the right things publicly, but not reflecting that same philosophy behind closed doors.
Internally, employees have described leadership as political and calculated—always saying the right thing publicly, but the moment anyone questions it, they’re pushed out, fired, or laid off.
BECU isn’t new to working the layoff systems with minimal NDA’s and severance packages. Last April, several employees were let go, and shortly after, nearly identical roles were reposted and filled—often through existing networks or familiar circles. All while moving forward with a costly (millions!) and terribly structured naming rights deal.
You can’t claim credit union values while operating like that.
100% a wolf in sheep’s clothing. Just because you “meet them and they said all the right thungs” doesn’t mean they are not well coach and performative AF. What that leadership teams says in public and what they do behind thr scenes are two very different things. . .
Anonymous says:
Someone from SAFE should ask why BECU’s General Counsel, Chief Auditor, Chief Risk Officer, Chief Impact Officer, and Chief Business Officer all decided to leave, more or less at once. Nothing normal about that.
Don’t forget the ENTIRE executive team that left within months of the new CEO coming on. It’s a revolving door in the C-Suite for a reason.
Most of the employees at BECU were very excited with this hire even knowing the CEO came from Wells Fargo, she seemed to say all the right things, talk about the movement, the members first philosophy, actually we all felt a little inspired and then reality hit.
3.5 years later BECU is a shell of what it was and there is no stewardship towards the CU movement AT ALL behind closed doors, it’s 100% toxic and performative. They have pushed out so many of the employees and leaders that made that place special.
So I am so glad Faye liked her and that Bev said “all the right things” but it is shallow and performative just like others have mentioned. She is a very very good actor in public, she very much slips up behind closed doors. To having the table slammed in front of you while profanities were flying to lying about how she was “listening” to employees with “listening sessions” but behind closed doors was saying “Gotta go pretend that I care about what they say” (jaw dropping really….) to being shushed in meetings for no reason, to tearing people up because they got one thing wrong in a speech she was giving.
The executive team is no longer local to Seattle, they live in Atlanta, New York, and LA – flying in on the companies dime with no connection to the region or any care about moving the community forward. Yes, they EMT and Board are being incentivized for a merger, so they chose a “SAFE” merger (pun intended) to get their bonuses and show they increased they asset size, cause their net growth is not great.
Good someone is asking the right questions. Fact is, Bev Anderson and her cadre of big bank execs she brought on Talk the Talk but don’t Walk the Walk when it comes to credit union values. She gutted the original EMT and slowly but surely pushed every exec who challenged what new operating values and the way people are treated out the door.
As another commenter said here, she’s amazing in public but behind closed doors treats people terribly. There is a verb in use at BECU now that you’ve “been Bev’d”, and that means she cursed at you, yelled threw a tantrum and most likely in front of your peers or even subordinates. Very inappropriate. Not to mention the Wells Fargo and Equifax background, hiring of other execs who have no clue about what Coops mean and ongoing performative gymnastics. It’s sad what BECU has become over the past few years. The board should be ashamed of themselves.
Many think of April as the month taxes are due. For the untaxed credit union system there is a more relevant event. In America, April is volunteer month. The country honors the millions of citizens who serve their communities and neighbors by sharing their most precious resource—their time.
This volunteer spirit is a vital part of American history and culture. Because the role of government was either nonexistent or limited in the country’s early years, citizens would volunteer to solve common needs. In 1736 Benjamin Franklin organized the first city fire department for Philadelphia, all volunteers. Today 65% of the country’s fire fighters are volunteers. Their collective effort is estimated to be valued at $50 billion if they were paid.
Down through history to the present day in every community, volunteers are at the center of vital social, civic and cultural activities It is an essential part of American culture. People take pride, have a sense of duty and enjoy the camaraderie these efforts offer. Just inventory your own involvements.
The credit union movement was built by volunteers with governmental oversight often rushing to keep up. In the beginning, volunteers borrowed their “authority” to start the first coop and called it St. Mary’s Bank.
This essential contribution to the coop system’s creation is embodied in the public “definition”—non-profit, member-owned and volunteer-led. Until recently, “volunteer” meant unpaid. which is still the rule for federally chartered credit union board members.
Every credit union active today gained their charter from the sweat equity of volunteer organizers. Often the first managers and staff were unpaid or seconded to oversee the effort while on the sponsor’s payroll. The physical location of these coop startups was donated either by a sponsor or even in a person’s home. These home-based coops were still common enough that in December 2013 the NCUA under Chairman Matz voted 2:1 to prohibit the practice in December 2013 board meeting. The effort was dropped.
The volunteer ethic is embedded in cooperative values. The seven cooperative principles (now eight) all infer or embrace the ideals of self-help and mutual interdependence. The words of the first principle: Credit unions are voluntary, not-for-profit financial cooperatives . . .
Today volunteers remain a vital component of credit union leadership. One example of this energetic leadership potential is from a recent a linkedIn profile. The student is donating part of her undergraduate career to a startup credit union on campus: Student at UNC Chapel Hill *4X World Record Mountaineer*3X TEDx Speaker*Blogger and Research Consultant*MUN Enthusiast*Cyclist* Runner-HM&FM*Badminton player*Artistic Roller Skater.
In the first fifty years of state charters, regulators were also worried about the temptations always present when managing other people’s financial resources.
In the early history of Illinois charters for example, senior managers, officers and directors could not borrow from their own credit unions for concern about self-dealing. The solution was to create chapter credit unions providing leaders an independent coop alternative. While this prohibition was changed, the call report today still monitors the total number and amount of loans outstanding to directors, committee members and senior management.
Unlike the federal system in 22 states the credit unions are permitted to pay directors, some with formal rules, other with authority more open-ended.
For example, several years ago I worked with a state charter where directors met three of four times per month in board and committee meetings. This frequency was because compensation was based on the number of meetings attended. Meetings multiplied.
One rationale for paying directors is the need for qualified volunteers. A long- serving CEO whose directors were paid his entire tenure said the practice had the opposite effect. Less attentive directors became harder to replace as they did not want to give up their extra income.
What can be learned from the increasing payments going to directors of state charters? Are these credit unions better performing versus their FCU peers? Are they more innovative? Are directors contributing in ways that unpaid volunteers may not?
While these are important issues, I believe one factor and the historical concern is already obvious and concerning. Specifically, does paying directors distort decisions away from what is in member-owners’ best interest, into what is in leadership’s personal interest or benefit?
There has been much public commentary and analysis of the proposed merger between Sacramento based SAFE and Tukwila, OR headquartered Boeing Employees Credit Unions (BECU). An important difference in the two states’ chartering rules is that state charters can pay their directors in Washington but not in California which follows federal practice.
Boeing Employees Credit Union’s 2024 IRS 990 shows the total compensation for the directors as $1.065 million. Chairperson Somberg received $154,375. The average pay for all nine was $118,352. Each reported working six hours per week for the credit union which equates to a $380 per hour rate.
In addition, the former CEO Benson Porter who retired as BECU President in December 2022 received $931,665 with zero working hours. The CEO Beverly Anderson who succeeded Benson reported working full time for 2024 compensation of $2,708, 880 or 17 times the average employee’s salary of $159,327.
One result from this compensation culture is that BECU has one of the highest operating expense ratios to average assets at 3.33% much higher than every California credit union over $10 billion. SAFE’s operating expense ratio in 2025 was 2.56%.
If SAFE directors were truly seeking a better performing opportunity, here are California based credit unions who are much superior to BECU in financial management and branch availability:
Golden 1 (Sacramento) Assets: $21B OpEx: 2.20% Br: 62
SchoolsFirst (Tustin) Assets: $35B OpEx: 1.81% Br: 69
Patelco (Dublin) Assets: $10B OpEx: 1.84% Br: 37
First Tech (San Jose) Assets: $30B OpEx: 2.83% Br: 56
San Diego County (S. D.) Assets: $10B OpEx: 1.84% Br: 44
Redwood (Santa Rosa) Assets: $10B OpEx: 2.28% Br: 21
Logix (Valencia) Assets: $10B OpEx: 1.84% Br: 37
Star One (Sunnyvale) Assets: $10B OpEx: 0.73% Br: 7
A second outcome of this high expense environment from one analyst’s review: members of BECU, on average, pay more for loans and earn a whole lot less on savings… The cost of operating BECU is @+15% higher than all other CU peers! (link)
Given this clear underperformance by BECU versus its peers and local California options, why did the directors of the $4.4 billion SAFE sign a “definitive merger agreement” to transfer control of all operations and all assets to an out of state credit union with no local connections, experience or proximity?
The definitive agreement has not been disclosed, except to announce that several SAFE directors will be given seats on the BECU board where in 2024 the average compensation was $118,000. SAFE directors, as a California charter, are unpaid.
Who will benefit from this compensation if the merger proceeds has not been disclosed. What is known from safecu.org and clicking on SAFE management, is that only three of the current 12 directors were members prior to being nominated to the board of SAFE. SAFE bylaws clearly state that nominees must be members in good standing. In other words the board nomination and selection process would appear to be closely controlled if not irregular.
Following the money helps understand motivation. The new director compensation available post-merger raises important questions. What are the conflicts of interest as SAFE’s board decided to transfer the entire future of this strong local Sacramento institution and its 245,000 members’ $400 million of equity gifted to BECU for free? Especially as BECU’s performance on most all critical financial measures trails large California credit unions and BECU’s national peers.
The founders of coops understood human nature. Payments today to state credit union volunteers follow no common pattern or rules, are limited in or disclosed long after the facs in IRS 990filings, and lack transparency and context. In such circumstances human temptations are set loose.
Today there are very limited, if any, checks and. balances on volunteer compensation. As in the multiple situations where millions of dollars are paid to CEO’s who merge their credit unions, the regulators always seem to look away from these instances of self-enrichment. No one and no set of organizations will ever be perfect. Moreover, as BECU’s results suggest, there is no relation between performance and director pay, especially at a high level.
The ongoing credit union merger free-for-alls are opening up this new form of compensation incentive payments. If SAFE is approved, there will be lots of travel to California by credit unions whose boards are paid—think of Colorado and Washington as initial sources.
But the issue is more fundamental than old-fashioned corruption. The director pay practices in some state charters are leading credit unions to an even more critical cliff edge. Recall the public coop definition of non-profit, member-owned, led by volunteers. It is “volunteers” that govern how the other two characteristics of coops evolve. Can paid volunteers be entrusted with protecting these two defining credit union charter characteristics when their own personal well being is involved? Have credit unions morphed into more for-profit leadership behaviors and rewards? But without market accountability?
What’s at stake in the SAFE-BECU proposed merger and in other similar director paid merger initiated combinations is trust in the cooperative system. For the oldest test of character is: “If you have integrity, nothing else matters. And if you don’t have integrity, nothing else matters.”
The 18 month no layoff should be little assurance. BECU needs those employees until they get on the same system. After they do, and when the SAFE CEO leaves at 18 months, there won’t be local leadership and no one to protect the local employees and community. Since BECU’s expense issue is so severe, there will be a lot of job reductions in CA.