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.
Today credit union momentum for the 250th birthday of America was interrupted by a Supreme court decision. The 6 – 3 conservative majority ruled the President had authority to fire members of independent agency boards established by Congress to be partially shielded from total Presidential control.
The decision overturned almost 100 years of precedent. It means Trump’s firing of NCUA board mebers Harper and Otsuka will be upheld by lower courts where the case is on hold. Trump may then choose to select two new board members to join his recently nominated Chair John Crews, a republican working in the Treasury Department. Or he could leave the positions vacant.
This event and its conseqences will be greeted with mixed reactions by credit union supporters.
But history can also provide us perspective to the current moment. And more importantly, point the way forward.
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NOTICE TO THE PRESS
The President has accepted the resign.,tion of Herman Nickerson, Jr., as Administrator of the National Credit Union effective upon the appoint ment and quaJification of a succes sor. He was appointed on September 15, 1970. There is no successor to announce at this time.
This week ends with the 250th July 4th national birthday celebration.
It is a moment of community consequence for a country founded on ideals and a vision begun with the words all men are created. . .
Our implementation of this founding declaration has been uneven. Even with ever increasing economic prosperity that leads the world.
So this milestone celebration creates ambivalent feelings for many who believe our vision is falling short in critical areas of our national life together. For example, those whose families came to America from far away and many who believe immigration has been a source of America’s international standing and internal strength.
Likewise there are strong parallels in today’s credit union story which spans less than half the country’s.
The movement was founded on an ideal that cooperatives could be an alternative to the for-profit capitalist motivation which viewed consumers as profit centers.
Credit unions’ financial success is impressive. These institutions are now the second largest depository system in the country with $2.5 trillion in assets and generations of members numbering in the tens of millions.
However, as financial success is achieved, some ask if the system has lived up to its aspirations.
For in America today, as Jim Blaine stated decades ago, “those who have the least or know the least, pay the most for financial services.”
There have been significant contributions by the movement’s founding mothers and fathers that have given credit unions a legacy to be proud of and a system that can do great things for individual members and their home communities.
But as in the country’s celebrations, there are concerns that the founding ideals are being lost. There is increasing evidence that in some credit unions, and as common practice in many, the impact is to actually widen the gap between those who are well off and those who live on each pay period’s income.
To address any ambivalence you may feel about either our country’s or our movement’s histories, or current challenges, I want to select music that honors our aspirational goals as a nation and as individuals.
When words are sung, their meaning is amplified and transformative.
Visions never die. They lie dormant until leaders arise to challenge our ambitions, to call us to our higher selves and to ignite hopes that spark everyone’s individual pursuits–of life, liberty and happiness.
Here is an anthem for the credit union movement’s collective purpose: Hard Times Come Again No More. Written by Stephen Foster in the 1850’s, it addresses the cycles of economic reality and the collective willingness to help each other when these circumstances occur.
(https://www.youtube.com/watch?v=5Fddr0CTflQ)
One of the vital initiatives Ed Callahan took as Chairman of NCUA was to take the monthly public board meetings “on the road.” Over a period of two and half years, public board meetings wewre held in all six regions. Often in locations that coincided with already planned league or national conferences.
For example the July 1982 board meeting was held in Chicago at the same time as NAFCU’s annual meeting. That was the same weekend that the Penn Square bank failure occurred. Because of credit union investments with uninsured Penn Square Bank CD’s, the Board meetingt attracted widespread interest.
The purpose of these outside the beltway public events was to give credit unions a chance to attend meetings and see the board at work. In addition the visits often involved credit union conversations, local newspaper interviews, all which raised the profile of the credit union system and the movements embrace of deregulation. The visit from DC raised the profile of an areas credit unions and their contributions to their their communities.
These interactions created awareness of NCUA’s activity and leadership. It gave senior DC based staff direct conversations with credit union leaders on their home turf and in the various economic circumstances around the country.
Each board meeting was followed by an open press conference where Chairman Callahan and staff would answ questins from the media and credit union attendees.
Yesterday’s NCUA board meeting was broadcast live, an effort going back years and accelerated by COVID’s cancellation of inperson events. It is a practical way for many to watch a distant public meeting live or later by video. While interaction is not sought, the slides and other presentation data can be downloaded by viewers.
Decades later this board live broadcast have replaced the on-the-road visibility which was discontinued after Chairman Callahan’s tenure ended in 1985.
But does it make a difference whether Board meetings are viewed via digital broadcast or in person in a physical serrting?
Tim Calkins is a marketing professor at Northwestern University’s Kellog Management School. He uses remote learning sessions in both his class room lectures and private consulting assignments.
The Covid epidemic nade virtual delivery a necessity. The use of remote, live virtual meetings has continued as an accepted option for many organizational inernal management meetings as well as public events such as member annual meetings. Sessions can be interactive and seemingly similar in content to in-person events with the same purpose.
Moreover, virtual events can be a more effective use of time by both presenter(s) and participants. No travel, recordings can be made at once, and AI edit summaries produced. The reach can be unlimited by audience size, location, or time zone. What’s not to like?
Following is Tim Calkins’ assessment of why in-person still brings benefits that virtual sessions cannot duplicate from an article he posted last week:
The Project
Over the past quarter, I’ve had the chance to work with a leading company on a competitive situation. There were new entrants in their industry and the company was formulating a response. This was partly a strategy question and partly a political question: getting the team and the senior people on board.
I did the project remotely. I taught a class session for the team on Zoom, had multiple phone calls and then participated in two team planning sessions in a hybrid format.
The Problem
The project is winding down, and I’m not feeling great about it. I think I made a positive contribution, but not as much as I could have, for a very simple reason: I wasn’t there.
This wasn’t a problem for the class session; I can teach effectively on Zoom. It was definitely a limitation in the work session.
There were lots of problems with being remote. The first issue was that I couldn’t hear much of the conversation; I was picking up about 60% of the discussion. I could follow along but I missed some of the context. Then, it wasn’t easy for me to jump in; I didn’t know how I was showing up in the room, so I found it awkward to make a comment. I also couldn’t read the room. I couldn’t see how my comments were being received. Were people nodding and agreeing? Or rolling their eyes?
Perhaps most important, I wasn’t there for the open times: before the meeting, during the breaks, after the meeting. These liminal times are critical when it comes to influencing and building relationships. During a break one can follow-up on a comment, ask a question to clarify a point or just build a relationship.
In hindsight, I should have insisted that to take on the project, I had to travel to the company for the key meetings.
I didn’t do this because my schedule has been hectic, so travel would not have been easy. And the company didn’t request it; they routinely did hybrid and remote meetings.
The Learning
My takeaway is simple: don’t do a strategic project if you can’t be physically present.
I don’t need to take on company projects; I only accept a new program when I think I can add value and will learn something.
Going forward, I’ll pick and choose with a bit more care. I’ll still teach remotely, but I’ll only do strategy working meetings when I can be in the room.
Might a new NCUA Chairman revisit the idea of taking Board meetings on the road? Such events could accelerate relationships, learning about local credit union circumstances and most importantly, building trust that can only be created person to person.
If Senate hearings proceed as planned and Trump’s nominee for the next NCUA chair is approved, todays board meeting will be Hauptman’s final time as NCUA’s solo leader.
As he departs, NCUA situation is like a suitcase without a handle, or wheels. The agency is being led by a single person, not the prescribed board. Its operataing capacity has been reduced by a DOGE induced, staff designed elimination of 20% of its workforce.
Hauptman’s major initiative has been to “flood the zone” with over a dozen regulatory revews addressing such urgent issues as banks purchase of credit unions versus the operational realities of credit unions purchase of banks.
The agency continues to publish a repeating loop of bureaucratic processes such as banning people from further activity in credit unions or periodic issuance of credit union data. When the nexr administrator opens the suitcase, he is likely to find little addressing critical cooperative or administrative management issues, e.g. the effectiveness of agency examinations. One indicator is the growing list of summary liquidations from sudden discoveries of significant, long term large operating deficits.
Hauptman has held board meetings “only as necessary.” His solo tenure of almost 15 months is an example of the shortcomings of a single administrator without either credit union context or regulatory experience. However that resume gap is not unique to him.
Such appointments, especially as Chair, mean the learning curve for new leadership is extended and there is total dependence on the bureaucracy’s agenda. More critically, there is a lack of relationships and knowledge of the credit union system and its different leadership elements. It narrows the understanding of issues from both an historical perspective as well as key differences about current system priorities.
The result is that the cooperative system’s uniqueness and capacity are underestimated. Critical issues are viewed from the more familiar perspective of the banking system. And the siren call of some lobbyists for the false standard of “parity” becomes a basis for decisions.
There has been a vacuum in regulatory leadership at both the state and federal levels for some time. It is hard to think of a comment or action taken in either system that addresses important trends and issues in a considered manner. The issues silently observed include purchases of banks, the merger frenzy driven by CEO payouts, the absence of real member governance rights, and zero transparency in credit union strategy and cooperative accountability to owners.
Leading NCUA is not a one-person job, It requires both administrative oversight plus constant dialogue and initiatives with credit unions, collectively and individually.
Right now NCUA’s suitcase is pretty light. It may be easy to lift without a handle. But sooner or later the movement will experience the consequences of a regulatory system that has no cooperative agenda or engaged oversight.
As the regulatory grasp and staff effectiveness erode, this will create a series of reactive responses to ideological/political priorities or to inevitable external problems or crisis. The system will be at the mercy of events without informed and committed regulatory leadership.
In the CEO’s words: At Good Neighbors we do not have a “growth” strategy; we have a “strength” strategy. Which is to say that we are not looking to increase members by numbers but instead are trying to grow members intentionally by focusing on those who are philosophy/mission aligned and who want to participate as owners. This is because we no longer have exclusively our closed SEG group and are instead tasked with building our own common bond.
Co-op fest (Buffulo) is a great opportunity to meet others in the area who are like-minded and tell them about the credit union. My friends at Cooperation Buffalo call these people the “coop curious” – people who are open and interested in learning more about cooperatives.
We participate in the Cooperative Fellowship.
From that website:
Cooperative Changemakers: A Community Power Fellowship is an intensive 11-week training for cooperative entrepreneurs and advocates building an economy that puts people first.
Cooperative Changemakers aims to activate and empower those interested in joining and contributing to Buffalo’s growing cooperative community. The Fellowship fosters collaboration, knowledge sharing, and the development of skills essential for building democratic power in our communities.
Participants have the opportunity to engage with local cooperators and develop actionable plans to bring their visions to life. The Fellowship seeks to cultivate a vibrant and engaged community of cooperative entrepreneurs and advocates, driving positive social and economic change in Buffalo.
Source: Thank you Emma Smalley, CEO, Good Neighbors Credit Union
At a recent reunion a colleague told a story of his granddaughter’s college interview. The panel was professors and tutors from the college. Her area of study was liberal arts not science.
How might you or your grandchild have answered?
She paused for a time, then said: ” I don’t know the answer. But here is how I would test to determine what might be the situation.”
She was admitted to the college.
Many personal decisions and business options do not have factually provable answers. Such as 1 + 1 = 2. Experts, analysis, prior examples and other learning can suggest possible options. But ultimately many outcomes are unknowable and require reflective judgment.
Last week a credit union professional asked, do credit unions have too much capital.? He provided no background, just the question.
I asked several credit union leaders how they would respond. Their universal answer: “it depends.” They said each credit union’s circumstances are different–the member base, the area’s economy and multiple other factors. . This is something each credit union must determine for itself.
This may be procedurally correct. However, is there a conflict as the persons making the decision benefit most from overcapitalization? One former CEO of a large credit union publicly stated that a net worth ratio over 7% is “stealing from the members.”
Higher net worth takes some of the performance pressures off management and boards. Unlike public companies, there are no market comparisons forcing them to meet a minimum level of return on equity, or ROE. This is the primary measure of effective capital management.
Is a more objective standard required? The distribution of capital ratios suggest the question of overcapitalization is widespread.
This is the distribution of net worth ratios for all credit unions at yearend 2025. NCUA’s rule states that 7% equity ratio is considered well-capitalized.
|
Net Worth Ratio
|
# of CUs at
12/31/2025
|
Total Assets
|
|
13+
|
1,982
|
$408,743,666,638
|
|
12-13%
|
422
|
$246,934,302,564
|
|
11-12%
|
457
|
$520,062,897,151
|
|
10-11%
|
514
|
$523,027,212,223
|
|
9-10%
|
499
|
$428,895,471,832
|
|
8-9%
|
304
|
$264,042,605,226
|
|
7-8%
|
136
|
$57,902,263,277
|
|
<7%
|
61
|
$7,407,376,727
|
| TOALS |
4,375
|
$2,457,015,795,638
|
At the highest ratio level, 45% of credit unions hold 17% of assets or almost double the well-capitalized rule. A number of these are smaller credit unions, but there is at least one top ten credit union in this tier.
Most credit unions report annual increases in net worth, no matter the level, as a success indicator. The common expectation as to how much capital is enough is one word: more.
Because leaders may not know a precise answer, this does not excuse the need for objective processes and relevant comparisons for setting a maximum level and for returning excess net income to members. Effective capital management begins with ROE. Pubic markets generally expect outcomes in the 10-12% range as the minimum standard.
Do plants have feelings? The too much capital question can be answered by every credit union. The analysis should be transparent for members. It is an example of management’s accountability to members of their stewardship of the collective savings.
Public presentation of a capital cap is a sign of thoughtful management. “More” is not a capital plan. Nor is an ever increasing net worth ratio a success.
A cap may even be more important in an era of market exuberance with bank buys, fintech investing and crypto partnerships announced almost daily. A capital maximum could bring some much needed discipline in situations where overcapitalization seems to be “burning a hole in management’s pockets.”
When capital exceeds the well-capitalized level (7% for credit unions) organic growth is sometimes never enough to satisfy ambition. Acquisitions come next. A current example.
From Jamie Dimon , CEO JP Morgn on organic growth and acquisitions:
| “If you sit around a lot of management meetings, the first thing they do when they’re not doing well in organic growth is they start to bulls—t about M&A.” |
| — JPMorgan Chase CEO Jamie Dimon, explaining that he warns his team not to get lost in pipe-dream deal talks instead of improving their own operations.
And yet, Dimon today announced that the bank could consider an acquisition worth up to $20 billion in the next few years now that it has greater flexibility from regulators to spend capital. WSJ May 27, 2026 |
Tomorrow’s followup: with credit unions’ average net worth over 11.3% at March 31, 2026, do individual coops have excess capital? Are these billions of equity above required amounts fueling bank acquisition efforts? Or fintech investments?
A number of economic and business leceaders in this era of stock market exuberance note that many of their peers have never managed through an economic downturn. Not just an nterest rate cycle as initiated by the Federal Reserve in 2022 to fight inflaiion. But an actual recession.
A second potential bubble indicator beyond the stock market’s seemingly unending upward trajectory, is the multiple schemes to get rich-quickly. These opportunities are based on some virtual digital innovation with an intriguing but unknowable future value. Hence crypto, stable coins and other forms of new financial transaction-payment business offerings.
The new CEO of Wells Fargo was asked whether the bank would be offering stable coins for consumers. His reply was pragmatic. A stable coin is just putting a wrapper around the US$. “For countries with higher inflation than the US,it might make some sense. But the use-case in the US is not clear. Every time you use it you incur transaction costs.”
Retired Warren Buffet of Berkshire was outspoken inhis views on crypto and virtual currencies..
“Cryptocurrencies basically have no value and they don’t produce anything… In terms of value: zero.” (CNBC, 2020)
In this 2023 CNBC interview Buffett explains the consumer and market fascination with digital options as another example of the human desire to gamble,. Humans have an impulse to to take a chance on winning big even when all odds are that will not happen.
(https://www.youtube.com/watch?v=vGVt8Y2ZdWI)
This is a trailer for a recent movie on the crypto environment: Everybody is Lying to You for Money:
(https://www.youtube.com/watch?v=DZR7LncSmEE)
McKENZIE-the film’s creator: Crypto is only good for two things: gambling—is the price going to go up or down?—and crime. The amount of crime that crypto facilitates is staggering. There’s a crypto company, Chainanalysis, that estimated $154 billion of criminal activity was facilitated via crypto last year alone. There’s the bubble idea that the price could, over time, keep going up, as new people flock to crypto as the story continues to spread. And then crime gives it a use case, a reason to be valuable.
The future will be different than today. Many physical aspects of our world will undergo makeovers and upgrades.
As stewards of member resources and community investments, the challenge for coop leaders is what changes are based on long understood core values; and what new enterprises rely or prey on human shortcomings.
Are crypto and stable coin “assets” adding to a community’s future or merely facilitating member participation in a gigantic, universal digital game? Is this an area where your credit union should educate versus coordinate member experimentation?
The 2026 irst quarter TrendWatch update from Callahans was a very positive description of a financially sound cooperative system. Here are two slides summarizing key macro trnds. The full slide deck is here.
Two of the five takeaways by Callahan’s staff were:
The commentators referenced the economic stress citizens feel with a 3.8% CPI increase; the majority who feel their financial circumstances are getting worse; and the K-shaped economy in which stock market’s gains are going primarly to those already well off, not those liiving on their weekly paycheck.
With net worth at 11.3%, or over 400 basis points above the 7% well capitalized level, should credit unions continue to add more to retained earnings?
With multiple options, how should credit union leaders allocate their success between these two priorities? How would members view this decision?
From a WW II poster exhibition at the Milwaukee Art Museum.
War as business. America’s advantage.
Multiple examples of concern about inflation in wartime.
War is a shared burden with the home front.
A new war and a new generation.
War and protests
Solid Anchor, US Navy outpost on the SonAnDoc river, Vietnam
Returning to the USS Windham County, LST 1170, February 1971.
Returning home to families waiting for ship to tie up in Yokosuka, Japan.
