Hornless Unicorns?
Thursday, July 31, 2025
Wednesday, July 30, 2025
The Credit Union Cooperative Model: For What It's Worth...
No longer a movement, no longer an ideal?
"We sold out the magic of financial cooperatives - [link Chip Filson blog] - not for the sake of
being understood for our contribution and confidence in people acting
together. Rather the goal became putting a number on who we are... "
The "new/new" leadership... "strive to be evaluated and on par with ideals that are not the drivers of our member-owners’ success."
"These market driven criteria have a hard time with the ideals
of community ownership ... where acting and living the purpose is
far different from cashing in. "
"This is not a good look for cooperatives. Their “worth” was never meant as one ready to be traded, abandoned ..."
😎 Every credit union member should stop and take a "look at what's going down"...
Tuesday, July 29, 2025
Credit Unions: "Taint" What They Used To Be...
Folks are starting to "nose-tice"!
✅ The credit union movement may no longer be a "movement" as one commenter recently noted; adding: " The term movement is a problem in and of itself. It shouldn’t be used anymore - it discredits an industry already fighting for relevancy."[AnonymousJuly 29, 2025 at 9:43 AM]
Whether you agree with that statement or not, the rapidly advancing trends of commercialization and consolidation within the credit union movement are a fact. And, these processes of commercialization and consolidation do discredit the traditional practitioners within the credit union movement.
The future relevancy of traditional credit unions is indeed in danger. Credit unions are no longer the non-profit, member-owned, democratically-controlled, locally-focused cooperatives they once claimed to be.
The hypocrisy is self-evident in mega-bank purchases, growth for growth's sake, the pursuit of market share, and the board/CEO emphasis on "me" rather than "member".
"One is known by the company you keep"; and, competitors, politicians, and members are awakening to "the new industry". The taint of distrust of "the brand" will eventually become universal.
😎 Do we now live in an era of fake news and phony credit unions?!?
"Well, we're not in Kansas anymore, Toto" ... that's for sure!Saturday, July 26, 2025
Whoa, Whoa! Hold Up! Where Is This Going?!
Help, getting lost in the weeds!
Several readers - SECU members in particular - have asked for a roadmap, since it seems the blog keeps veering from ditch to ditch - issue to issue. A valid observation! Here's the list of concerns for you to think about:
1) The credit union movement/industry is rapidly consolidating for various reasons. There are @4,400 credit unions left - down from @23,000 several decades ago. The largest 400 or so credit unions represent 85% of all members and total assets.
2) Most larger credit unions no longer are bound by the traditional limitations on membership and are able to serve everyone. Many credit unions have moved beyond a traditional focus on consumer finance into commercial financial services and are difficult to distinguish from banks.
3) The similarity of functions between credit unions and banks has brought the tax-exempt status of credit unions increasingly into question. What would happen if the tax-exempt status were revoked?
4) The core cooperative governance and ownership principles of a credit union appear to break down and become irrelevant as a credit union grows large. Boards of directors are still elected by members to direct the day-to-day operations of the credit union. Boards however have increasingly infringed upon or eliminated credit union member governance rights. Is the credit union cooperative model relevant or appropriate any longer "at scale"?
5) History shows that "at scale" cooperative and mutual financial organizations - think savings and loans, mutual insurance companies, perhaps Blue Cross/Blue Shields, etc - are eventually converted into stock-owned, for profit businesses. Should a sensible path for the conversion of credit unions into for-profit institutions be established?
6) If credit unions by choice or "accident" become for-profit financial institutions, how will the accumulated billions of dollars in capital/reserves be disbursed among the member-owners and other stakeholders? History clearly indicates you don't want to leave this "to chance" - think avaricious consultants, lawyers and insiders!
7) Given the preference of many credit unions to transition to a more commercial, bank-like model is it time to redefine the principles and scope of a non-profit, cooperative credit union?
😎 Hope that helps... how would you reconcile these diverging issues?
Friday, July 25, 2025
CU Boards Playing Games With Member Equity: "The Price Is Wrong"...
... Right?
"Come on Down!" Lots of push back on the issue of credit union capital/reserves - member equity!
Evidently those who are mis-hawking "the benefits" of credit union mergers are up in arms over the premise that they appear to be peddling a harmful mishmash of snake oil. Credit union boards have started asking serious questions about their fiduciary responsibility and have awakened to their legal liability. Expect a fuss - and a fight over the future of tens of billions of dollars in member equity.
One commenter sought to claim that the rules of economics, stockholder-rights, and common sense should not apply to credit union mergers. After all, credit union members were much like financial Bambi's - naive, vulnerable, doe-eyed - and must be "protected" from the real world. And besides, those billions of dollars in member equity are "virtual" - not real money, not hard cash, and certainly not theirs!
✅ Is it legal for a merging credit union to look after its members by disbursing the capital reserves to existing members? See what you think...,
The Federal Credit Union Act PART 708b—MERGERS OF INSURED
CREDIT UNIONS § 708b.106:
(ii) A statement as to whether the
members of the merging credit union
will receive a share adjustment or
other distribution of reserves or undi-
vided earnings, including a summary of
reasons for the decision and, at the
merging credit union’s discretion, a
short explanation about the capital
level;
Believe we're still trying to abide by the law in this Country, aren't we?
😎 Should your CU Board tell you that they have decided to give away your ($$$) member equity - and why or why not?
Thursday, July 24, 2025
Contestants, The Final Jeopary Category Tonight Is: "Credit Union Merger Mania"... Misappropriation #7
We've been talking about the principal problem with the escalating pace and size of credit union mergers [7/21 post - link]:
In general, the merger agreements approved by the boards of directors of credit unions merging (selling) to other credit unions defy economic reason and are not in the financial best interests of the member-owners - the folks those individual board members are elected to represent.
As such those merger agreements appear to be a clear breach of fiduciary responsibility.
The proposed merger example given in the 7/21 post was between two Massachusetts CUs: Brightbridge CU and AAHRA CU. You'll note that a much better and more financially responsible proposal would be to payout $2k to each of the 6,000 AARHA members in connection with the merger. The AARHA members are appropriately rewarded for the success of their credit union and Brightbridge benefits from an expanded geographic footprint, 6,000 new members, 4 more branches, and gains @$150 million in assets.
Nothing unusual about the proposal - in fact it mimics "the industry standard" for mergers as outlined by the National Credit Union Administration (NCUA).
Many financial speculators and predators will enjoy "a big unearned payday" if merging credit union members - like those at AARHA - continue to receive less than their fair share of the credit union's member equity.
"But the NCUA and State regulators say it's OK?" Do they?
Tuesday, July 22, 2025
SECU Has Already Misplayed The Jeopardy Game With CIVIC...
A Little Muscle or Gymnauseum?
✅ Commenter on 7/21 Jeopardy post [link]: Anonymous July 21, 2025 at 11:33 AM
Monday, July 21, 2025
National Merger Mania: CU Boards Playing Final Jeopardy Wth Fiduciary Responsibility... Misappropriation #6
"Alex, I'll pick..."CU Member Equity"... for $2,000."
We've been talking about the escalating commercialization of credit unions on both the state and national level... and how credit union members stand an almost guaranteed chance of "getting fleeced"- if history is a reasonable guide.
Been using SECU for examples, but lets switch to a recently announced merger proposal in Massachusetts [link], for a real-life example and let you determine "What's best?"
The two CUs involved are Brightbridge CU [link] and AARHA CU [link]. Both look like fine CUs, run by fine folks, no apparent problems.
Brightbridge is located mostly in eastern Mass, has @$2.2 billion in assets, 19 branches and is very well-capitalized at @10% [to be "well-capitalized" by federal law, a CU must have capital/reserves > 7%]. AARHA - has been around since 1929! - serves mainly western Mass, has @$152 million in assets, 4 branches, and is also well-capitalized at @8.5%.
Brightbridge ia the acquiring credit union, which usually means - at least at first - nothing much will change for AARHA members except the sign on the door. Accounts, rates, loans, checking, etc all just switch over to Brightbridge data systems.
✳ Here's the catch! AARHA CU has only @6,000 members and since 1929 has accumulated over $12 million in capital/reserves - that member equity belongs to each and every AARHA member!
✅ The AARHA Board of Directors has two possible ways to complete this merger "on behalf of AARHA member-owners":
1) Just give AARHA CU to Brightbridge - including the $30 million in cash/investments, $100 million in high performing loans, all those branches and account relationships .... and $12 million in member equity.
or
2) Just give AARHA CU to Brightbridge - including the $30 million in cash/investments, $100 million in high performing loans, all those branches and account relationships .... and send each of the current 6,000 AARHA members a "member equity" check for $2,000 (total $12 million).
😎 Brightbridge gets a "free credit union" either way [and remains "well-capitalized"!], so you know how those folks will vote.
😎 How would you vote if you were an AARHA member? What if the AARHA Board didn't let you vote on those two choices?
Sunday, July 20, 2025
SECU What's Next? Merger Mania, Cash Outs, Member Marginalization... The A, B, C's!
Not "here"!
😎 😎 Commenter: Anonymous July 18, 2025 at 11:48 AM
"What does this have to do with SECU?"
A) [link] Merger Mania - the "no formal proposal proposal"...
B) [link] Cash Outs - "The $ 6 million man"...
C) [link] Kicking the Members To The Curb -
The SECU Annual Meeting...
Recent Year Member May Speak Member Resolutions
2022 Fully Permitted Fully Permitted
2023 Restricted Restricted
2024 Prohibited Restricted
2025 Prohibited Prohibited
D) Well, Duh! [link] Pop Quiz!...
😎😎 Commenter: Anonymous July 18, 2025 at 10:42 AM
"I quit believing in conspiracy theories, they were all coming true!"
Friday, July 18, 2025
SECU What's Next? About That Texas Merger...
Big Hat, No Cattle!
Encouraged you yesterday to take a look at Chip Filson's blog [link] on the Texas Credit Union Regulator's approval of a merger between TDECU and Space City Credit Union.
'Course you didn't listen in on the regulatory meeting, neither did I. Life's too short!
TDECU is the former Dow Chemical employees' credit union with @$5 billion in assets. Space City Credit Union is the former Stewart and Stevenson ( a Texas engineering company) employees'' credit union with @$134 million in assets.
But here's "the raw meet problem" of what's happening nationwide with credit union mergers and misfeasance:
The three top execs at Space City CU will receive a minimum payout of $6.5 million+ to "sell out":
✳ One can be sure it was an impartial decision.
Remember this is a small $134 million credit union. Space City Credit Union has only 12,000 members, after 60 years of operation. Each member is effectively paying $500+ bucks "to get rid of" this management team.
😎 As an alternative to this "merger mayhem", the 12,000 Space City member-owners could have told the staff "Thank you", sold the credit union, and simply divided up the $19 million in member equity, which they own.
Each of the 12,000 Space City Credit Union members could have gone home with a check for @$1,500! And if desired, simply go open an account at TDECU for free... since anybody in Texas can join TDECU!
✳ Which choice would you have made...
✅ Coming soon to a credit union near you.
Thursday, July 17, 2025
SECU What's Next? Merger Mania... Misappropriation #5.
SECU Financial?
Trying to ignite your thinking about what the future may have in store for you as an SECU member... and why you should care.
First lure was to point out the fact that you and your family stand to lose $8,000 to $10,000+ [link] if the bank buyouts, merger mania, insider dealings, and conversions reach your credit union [link].
If a stranger were to ask you to simply hand over $8/$10,000, you would question their sanity; if someone simply withdrew $8/$10,000 from your credit union share account you would hopefully consider it fraud.
Maybe you are of the sort that really could care less about having an extra $10,000 bucks in your pocket - most of us aren't like that! Statewide, would a little $6 billion cash infusion into the North Carolina economy be helpful?
Want to see these trends in action? Then take a look at our neighbors to the south in Texas [link]:
"Credit unions have historically focused on consumer lending, so having “credit union” in the brand implies a limited scope of what the organization may be able to do. With the word “financial,” it more accurately represents the full range of products and services..."
"... open to additional mergers and acquisitions,”; "... will focus on closing its merger with Space City Credit Union and acquisition of Sabine State Bank & Trust before making any more deals,"; "...‘We would like to partner with you. . .”; "We must grow."
✅ Please take time to read the entire article so we can further discuss what is coming to your credit union.
😎 At 10:00 am [ET] Friday [7/18]: You might even want to listen in on the Texas credit union regulator's meeting [connect info at bottom of article]. See if their regulators are also " sitting on their as-... e-r-r... hands"
Wednesday, July 16, 2025
SECU Board Election Procedures - Still Making News In North Carolina
A Boogie Board?
BusinessNC [link] readers are evidently not yet bored with board election antics at SECU.
This latest article provides an across-the-board recap of SECU's on-boarding process for 2025. Critiqued for less than bulletin board transparency in the nominating process, SECU continues to claim all procedures were above board and handled strictly by the board.
SECU didn't really go overboard with clarity, as several responses appeared to be all over the board. Asked about the number of board applicants for 2025, the "no comment" response seemed stiff as a board.
The Chairman of the Nominating Committee, Mr. Chuck Stone, seemed to confirm independently, that beyond the 4 recruited candidates, only one other SECU member sought to be interviewed. 1 out of 2.8 million members isn't exactly an "all aboard" shout out.
"Asked about meeting procedures, a spokeswoman said details about the format will be published on Aug. 29."; but confirmed that members' ability to speak will continue to be boarded up at the 2025 Annual Meeting.
Guess members can try checkers or chess while the other details get ironed out... "You'll know what you need to know when you know it."
Tuesday, July 15, 2025
SECU What's Next? No Adults In The Room?... Misappropriation #4.
Playing at being a banker.
We're taking a look at the growing sense of internal rot within the credit union movement nationwide and specifically at the financial loss credit union member-owners are, or may soon incur. Using just SECU members as an example, the stakes are high in North Carolina [link] - $6 billion!
The national alarm is being raised on many fronts, one example of which you saw yesterday in MisApp #3 [link]. Chip Filson's blog is full of detail and a difficult slog. But, here's the bottom line: What is a Massachusetts credit union chartered in the 1950's to serve a local Air Force base doing buying a commercial bank on the eastern shore of Maryland?
There doesn't appear to be any sound economic nor financial justification for this non-transparent and perhaps non-arm's length purchase. The member-owners certainly didn't come up with this idea and appear powerless to object. The regulators are sitting on their as-... e-r-r... hands. There are no adults in the room to supervise the "child's play". Any of this sound vaguely familiar?
In the last 18 months 32 credit unions have acquired 35 banks with assets of $10+ billion [link]. Would you suspect these sort of for-profit, commercial bank purchases will reinforce support for the tax exempt status of credit unions - including SECU?
😎 If you answered "yes" to the above question, I have a bridge in Brooklyn - and a bank on the eastern shore of Maryland - to sell to you.
Can't happen in North Carolina... you're at risk, already has!
Monday, July 14, 2025
SECU What's Next? The Honey Pot... Miappropriation #3
Show me the money honey?
Winnie the Pooh had an insatiable appetite for "hunny", some people have the same problem with money! Where I live folks are often willing to stick up a convenience store for $50 bucks!
What would happen if you had $6 billion bucks lying around in North Carolina with nobody's name on it? Would the flies find the honey? You betcha!
We've stopped to take a look at a growing nationwide threat to credit unions and their members - that means you! The threat is the misappropriation of a credit union's "member equity" (also sometimes called reserves, capital or net worth) via mergers, insider trading and payouts, bank purchases, and charter conversions [link]. The flies are circling, folks!
Using SECU as an example in MisApp #2 [Pot of Gold - link], we figured out as an SECU member that your "share of the pot" was at least $2,000, family of four - $8,000+! That would be sweet, right? That @$2,000 individual member-ownership amount is about the average for every credit union in the U.S. - including your credit union!
So are you interested in hearing about what's going on, or do you prefer to just let someone else grab it?
Could never happen in North Carolina? Wanna bet... say $6 billion bucks?
Your choice, your money!
$6 billion bucks is a lot of convenience stores!
Saturday, July 12, 2025
2025 SECU Board Candidates Announced - Two Incumbents Stepping Down.
An "illiberal democracy"?
The SECU Nominating Committee has announced the slate for 2025. Chris Ayers, Nneamaka "Amaka" Flynn, Ben McLawhorn, Thomas Parrish. Two incumbents are stepping down.
Mr. McLawhorn and Mr. Ayers (famous when chair in 2023 for the "no formal proposal proposal") are incumbents. Mr. Parrish is a former board member, "un-elected" in 2023 and Ms. Flynn is a long-time advisory board member.
In contrast to the absence of direct notice of changes in this year's election procedures, the candidates were announced broadly by email to the SECU membership.
The email stated: "The Nominating Committee is encouraged by the level of candidate engagement and participation in this year’s election."
Other than these four nominees, recruited by the SECU Board, would you like to guess how many other members - out of 2.8 million SECU members - submitted nomination packages to the Committee?
Commenters have asked: 1) "Can a member self-nominate now?" No, a candidate must apply through the nominating committee. This was challenged in 2023 as not in accordance with the SECU bylaws; the Administrator of Credit Unions said the Board may do as it pleases; 2) "There wasn't proper notice of election procedure changes." This was challenged in 2025; the Administrator of Credit Unions said the Board may do as it pleases.
The Nominating Committee did note: "As members, your active participation in our democratic process is crucial to SECU's success."
Should be a memorable Annual Membership Meeting!
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"What does this have to do with our organization [SECU]?"
Well, in case it has slipped your mind the "new/new" at SECU tried - ineptly! - to run a little merger gambit on the folks at Local Government FCU back in 2022. As we all know, it didn't go so well, to say the least.
SECU keeps trying to claim it never happened - "the no formal proposal proposal!"; but it did. Far too much evidence and too many highly reliable witnesses for that truth to be suppressed. Best witness ever is Mr. Maurice Smith, CEO of LGFCU at the time. Take a look: [link] [link].
So, we're left with two possibilities concerning the LGFCU merger proposal: The SECU Board and ELT either 1) knew what they were doing , or 2) didn't. Hope the commenter now understands why this matter applies to SECU. Megalomania or stumble-bumery? Not exactly a confidence inspiring choice.
Using the "Jeopardy formula" from yesterday; in 2022, LGFCU had @$3.5 billion in assets, @$300 million in capital/reserves, and @ 400,000 members. Each LGFCU member had a "member equity" stake of @$750 in the credit union.
SECU seems to have implied to the LGFCU Board: "Give us your credit union for free or else!" Given "that offer", the LGFCU Board rightfully pointed a middle finger at the SECU Board and gave them a Bastogne, Battle of the Bulge reply.
The credit union "Merger Mania" game is being played by hardcore, financial professionals at the national level. It's winner-take-all, fools-come-last with billions of "member equity" dollars up for grabs. Credit union members are, and will continue to be "put-in-play" - presented with "offers" which they should refuse.
Whether the SECU Board and ELT don't have a clue or just play poorly is a high risk problem for SECU members, as the tsunami of mergers continues to roll in. Is the Board's commitment spelled out in "Our Strategic Plan"? Nah, nothing of substance is...
😎 BTW, if LGFCU members had been given the choice to each receive a "member equity check" of $750 bucks and move over to SECU, how do you think the vote would have come out?