Tell Me Why I'm Wrong

Feat. Randy Karnes

Trust the Future to Those Willing to Lead

by Leave a Comment

At the recent NCUA Board meeting, a new rule was approved in a 2-1 vote governing succession planning at credit unions. They wrote, “The proposed rule would provide federal credit unions with broad discretion in implementing the proposed regulatory requirements to minimize any burden.”

BS. Rules seldom “provide” credit union operators “broad” discretion, due to the fact that the regulator and their agents are the judge and jury on how that discretion is used. Broad discretion to me means the operators can simply say “hell no” and not follow the rule at all. Discretion is in the eye of the beholder, and the NCUA is the only eye that matters most of the time.

Why does the regulator write “minimize any burden”? This is going to cost and hurt the operator, but do not worry, we do not want it to hurt too much, says the NCUA. Why say that? Why not say this is going to be a win-win rule for everyone? Why not spell out the burdens and the tactics to minimize them, or sidestep them?

Half of our industry will read way too much into this, the other half will not read it at all. They will add a person to their staff and designate them the next great leader. They will add the expense too early. They will risk destroying team continuity and a negative shift towards team/career politics. They will use this all as an excuse towards breaking the camel’s back – and a rush to the exits. Because they are probably already late to the game; not a critical game, but just a “we know better than you game.”

I agree with planning for leadership changes, planning your response to them, organizing for the potential deer in the headlights look you get when your leader decides or has it decided for them now is the time to step off. But I do not agree with many of the things that succession consultants and “we can fix it people” will cast upon organizations in the quest to “predict the future and pick people now.”

By forcing your hand to do something, NCUA has made it all too easy to simply check the box (possibly at great expense) and move on. But succession planning is important for an organization’s longevity. To be successful at succession/continuity planning and its execution:

  • Create an organization that expects, demands, and wills the organization to have a future that needs a leader. Build that expectation every day.
  • Present a firm to the marketplace, candidates, and stakeholders that is based on a dynamic mission worthy of its individual contributors’ time and efforts.
  • Focus on the key processes to complete the task more than you are on the subjective evaluations of human social tradeoffs. It’s a project with tasks to manage, not a social dilemma for the ages.
  • Focus on expected outcomes and their priorities more than the way to achieve them. A prospective CEO needs the assignment as the compass and goal more than a blank page to assign leadership skill to.
  • You need everyone to lighten up and avoid the drive for certainty and perfection from ensuring the paralysis and regrets of failure. It’s a 50/50 proposition picking a new leader, and one that gets better with doing it multiple times, not just once.

Have plan, budget a course of action, and trust the future. And then get back to building the will, the confidence, and the positive belief that your organization will survive. Because the most important thing to your team’s future is not the person in charge; it is the confidence that your design, your stakeholders, and your membership can sell their intent to survive.

I hate that so few CUs today can proudly declare we are valuable, we are the ones our members need, and we see this mission as important, intoxicating, and something to hand off to our future leaders. Please do not see this as a task to simply put a new butt in a seat… it’s not. It is a constant culture of building a case to always be in the game and trust the future to those willing to lead.

Courtesy Pay May Have Lost Its Way Via Predatory FIs, But…

by Leave a Comment

We all know that consumers should not spend money they do not have or do not have a way to finance, but they do all the time. Do we really want to throw our members under the bus and leave them hanging? Are we going back to retailers abusing them for NSFs? Do we really want to push them to the “buy now, pay later” FinTech pay day lenders’ reimagined solutions? Do we really want to put the retailer back in the position to control consumer ghost loan balances that compete with our credit products? Nothing is free, and when members spend money they do not have our for-profit competitors and retailers will find a way to take advantage. 

If credit unions are the “consumer’s ally”, we will champion positive, ethical, and fairly priced solutions for when there is a gap between my money in hand and the things I need. Short term, small dollar solutions for those honest gaps. “Credit unions have your back Mister Member. Here are my credit union’s “positive, save you reputation” solutions. Here are my credit union’s ethically designed and properly disclosed solutions. Here are my credit union’s new and fairly priced alternatives, including Courtesy Pay done in a way that adds to your family’s safety net for banking at the speed of light.”

Courtesy Pay is not a poor solution for members and consumers. It’s a solution that has been abused, misleading, and unfairly priced. And if you are honest with yourself and board, you probably participated in the abuse on your way to rethinking the future. Those things can and will be corrected, and it can start with you. Do not just throw away the opportunity to do it right, because you assume everyone does it wrong. Learn, adapt, and earn while you help members.

Or solutions like “buy now, pay later” will be the next big abusers of sound banking processes, member financial hopes, and the intermediation of our services by others. Tell Me Why I’m Wrong.

Harper’s Opposition to the CUSO Rule Points to an Unwillingness to Innovate

by Leave a Comment

If you haven’t read it yet, Vic Pantea expressed his displeasure with Todd Harper and his statements decrying the CUSO rule that was recently passed 2-1.

I agree Harper has been a breath of fresh air as to the hope for the future of our industry and ALL credit unions, but his response here is straight out of the NCUA we all see as an agency that will never save a single credit union. They simply quote the status quo that change is never right for today; it is always clouded by the view of the long term and that once approved, nothing can be adjusted.

The NCUA is an organization of no vision for making a series of moves, or being confident in their ability to adapt and modify solutions once they get rolling. One and done in their opinions as if they were the Supreme Court setting precedent. Instead they should be acting consistently to try new things, then improve on and rethink them for current organizations that need innovations, not trust in the tried-and-found-lacking approaches that are leading only to the consolidation of our industry.

Everything is a slippery slope, and will too quickly get out of control before they can adjust—because they cannot adjust—they simply copy others or stick to the guns that will doom the players who need change the most.

Harper should show more faith in the future, and the need to adapt the agency for living and adapting solutions based on new leadership traditions at the NCUA. Ninety percent of all credit union opportunities that will be sourced to credit union balance sheets and income statements will come from indirect outlets in the future, and hopefully from collaborative industry organized outlets. Why not start with CUSOs as the major player in sourcing opportunities to credit unions? Do it now, evaluate them often, and adjust while there are still credit unions to save.

Car dealers might have made the concept of indirect a negative one for some, but others may find ways to source members, source loans, source all account types, and service income to credit unions with different results. One day an industry that aggregates opportunity sourcing as well as maximizing direct opportunity might be the model even the NCUA counts on.

As non-credit union industry players make more and more proposals to create opportunities centers for credit unions to draw on—such as third party sourced Neobank vendors—our industry and regulatory leaders might regret shutting out industry efforts to be the primary players that would fit our industry’s motivations, ethics, and constant investment for all credit union ships to rise. Trust CUSOs, do it now.

Harper is wrong here…. Tell Me Why I’m Wrong!

A CEO’s Current Analysis—and How to Respond

by Leave a Comment

As I write this, we’re deep into preparations for our 2022 business plan and budget. We’re in the mood to look forward and say, “yesterday’s numbers are yesterday’s numbers.” And, as of June 30, yesterday’s numbers are spectacular.

I could wax on about all of the effort, the good luck, and the wonderful contributions of everyone involved. Credit unions put forward the capital and embrace our alliance; we go about our day-to-day business; and the results are great.

But I have a nagging feeling about the future. We all have the sense that we’re making money by hunkering down, by avoiding aggressive investment, by just riding the wave of a national COVID approach that will leave us hanging in the future.

American citizens will all have to wake up and face the day after all the free money expires. As American businesses, that means we are going to wake up to consumers being resentful about how hard life is, the day after the COVID relief funding ends.

I wonder what a marketplace of resentful consumers means to credit unions. I wish I had a crystal ball and could tell you exactly what it means, but I don’t. I can only tell you what we’re planning for 2022 and how we hope that will pay off in the coming years.

  1. We’ll have to be more aggressive about investment and think hard about what we’re committed to as a community of credit union operations. We need to fuel the future with investment. The hunkering down is over.
  2. While we have a bit more time to analyze business trends related to the COVID pause, we’ll have to quickly identify the game-changers that will last, versus the over-reactions and over-estimates of how things like remote work will affect our future. We can’t throw out the baby with the wash based on an interruption in economic models. What will we count on? What will we bet on? What will we make work? I’m not sure it’s going to be as radical in the next two years as most people think. We have options if we’re patient. We have a future if we don’t shoot ourselves in the foot.
  3. We’ll have to avoid being disappointed by the fact that COVID might not end as cleanly as we all hoped. We’re making progress, but that progress may not be without some setbacks. Things like vaccines, wearing a mask, and social distancing might not just end, never to be seen again. It may feel like these issues linger right through 2022 and 2023, like a bad hangover after New Year’s Eve. Optimism, and a realistic evaluation that things are getting better, will have to rule the day for business planners.

Wow! These three marketplace realities confront every in-place or new leadership team.

The pressure will be high to pick the right investments, to choose the right trends to run towards, and to maintain an optimistic viewpoint, when pessimism is all around. No easy missions for any CEO.

The pressure is not on a single individual; it’s on a network. For a network to work, we all have to help our peers be successful by contributing to each other’s success. If you want to contribute to our CUSO’s success, spend a few minutes thinking about how each of us can be the person who helps us all avoid dropping the ball.

The numbers as of June 2021 are great. The predictions for September 30 are as positive as any year I can remember. My faith in the future is constant, given my faith in all of you.

Tell Me Why I’m Wrong.

Avoiding the Weeds is the First Sign a CEO is on Their Way Out to Pasture

by Leave a Comment

I recently called CEOs’ attention to an announcement of an early look at a newly constructed and designed online banking. It’s Me 247 has had a 10-12 year ride….and now we are resetting for the next evolutionary period.

As a CEO can you site the top three trends/ideas that signal the reset? As a CEO can you site the top 10 tactical plays in the channel that signal your new retailing focus? As a CEO can you do more than just coordinate the board and broad stroke ideas that related traditions to the present? Can you sell the future?

Do you know why your teams only focus on the right now? Because you might not be focusing on the tactics and the connection of those tactics who prove you are marching into the future. Life is lived in the weeds, and if you are afraid or bored with the weeds defining your futures… well I’m just saying.

Micro-awareness is the fuel that lights the fire of where you are going, and the strategy verification on how you might get there. What does micro-awareness mean to you?

Tell me why I’m wrong.

The DANCE goes on to a sleeping puppet theater’s crowd

by Leave a Comment

Free tickets to watch the show

Vic Pantea is a good teammate and a good watch dog for NCUA activities. Check out his call to the industry below.

But even Vic tires as he sounds the alarm and tries to rally all of us to act in our best interest. But we lazily watch out the window as the players play out the moment mandated by tradition and circumstance. The bunglers (NCUA) top the fence and the our trustful dogs on leashes (associations) sound off, yapping and hoping the intruders will take notice. And from perches on high the birds, still believing they are free to fly, watch as the scene fades for a lack of energy by any of the actors.

It’s a dance we all play. The tap dance called a budget process. We lay out the history of compromises and everlasting moves to increase the game. We fence with our heart strings and good intentions as to try and push back the creep, but we always accept it. Instead of admitting defeat we simply shirk and call it the cost of doing business and retreat to other distractions in our business world. And in the end the players that feast on our funding simply cut their notches in the history books and look forward to next year.

And when next year comes, and the NCUA and associations hang out the budget banners and pass out tickets to the show, take little notice that FEWER PEOPLE ARE IN THE CROWD. And given good fortune, my good friend and teammate Vic Pantea will rally his call for all of us to feint interest one more year.

I guess wisdom allows me to accept this fate, but for that I might still have the passion to mount a fight, to rally a resistance, and to see the effort my responsibility. Good for the agencies. This year Vic rated their “vigorous objections” some of the best ever.

Tell Me Why I’m Wrong.

Last week’s budget hearing saw some of the most vigorous objections the agency has ever heard from the association trio of NASCUS, CUNA, and NAFCU about NCUA’s proposed budgets for 2021 and 2022. It is good to hear the concerns that we should all be supporting, but it was Lucy Ito who said it best that the futility of their testimony is evident in the total lack of agency action on any of the previous years of testimony. It’s as though the agency grudgingly permits the annual budget hearing, but fails to pay any respect towards the comments. Well, what’s new? Isn’t that the usual agency response to 99% of the comments made by credit unions for any request for comment made on any regulatory actions or operational concepts? It pledges it will build stronger collaborative efforts with credit unions, and almost as importantly its fellow state regulators, but where’s the evidence?

While yesterday’s testimony was well researched and hit the target of major concerns with the agency budget, it failed in one aspect. It lacked the weight of our pledge to take action. It lacked the punch of telling them what we are going to do to make them pay attention and involve us actively in their governance and their strategies. It failed to remind them that the $19 B+ of CU capital now in the NCUSIF is not a donation, but remains as the fiduciary responsibility of the 5000+ federally insured credit unions, and that we will act upon any irresponsible misuse of our owners’ capital.

Let’s do something today! Let the NCUA know that you care and hold them responsible. You can start by sending them your budget comments and the action you will consider appropriate if they continue to refuse to listen. May be you evaluate a charter change or if you are a state charted CU and allowed by state statute you consider a change to private insurance.

You have until December 11 to comment. Join the efforts of the CUSO Challenge (www.CUSOchallenge.com) to make a difference.

Vic Pantea

Digital Marketing is Word of Mouth

by Leave a Comment

In response to Chip Filson’s blog on the future of advertising, NACUSO’s Denise Wymore had this to say:

I wrote a book in 2011 titled The 2020 Vision of Marketing: A Focus on Purpose.

I predicted the demise of traditional marketing channels (TV, radio, newspaper). I was correct in that assumption…

I did not predict the rise in digital marketing (not for credit unions anyway) the message in my book was that we have to get back to word of mouth marketing by focusing on the member experience.

To that end if credit unions had been more prepared with the digital experience we would have won in COVID. Now many are playing “catch up.”

While I agree that the prioritization of marketing channels is shifting, “demise” is a very strong word at the current time. In reality, CUs had really not prioritized traditional channels to any GREAT or comprehensive model in any way. Traditional marketing channels never counted on CUs, or are they now missing our industry in any way. We were not players and we now seem to be justifying it by saying it was based on us walking away.

I do agree with Denise that “word of mouth” is the foundation of all effectively scaled marketing for credit unions of all size. And would now add that digital marketing from a self-serviced publishing approach is “word of mouth”. The revolution for credit union marketing and investments will be when CUs start to use digital marketing concepts as the PUBLISHERS of digital content directly to their audiences. Digital magazines, direct content publishing, press release style postings through their own outlets. Word of mouth delivery is digital, and it’s self-directed community pushed. Eliminate the middle man (somebody else’s eyeballs) and go direct to your community. 80% of your spend at least is cultivating your community directly, and no more than 20% of your outreach digitally is for new community prospects.

All of this was true for anyone really understanding community affinity and how to cultivate relationships at the lowest cost prior to COVID. COVID is just shining a light for cooperative community marketers to follow. What I worry about is that if we promote this as the COVID catch up then people who are waiting for post-COVID returns will never engage at all.

Tell Me Why I’m Wrong

Merging Around the Power of Ownership

by 1 Comment

2020 has become the year in which it’s popular to have the discussions you wished you never had to have

A few people reached out to me based on being contacted by promoters of this topic (mergers)/conference/consulting approach. They were less than excited about the whole deal. But based on the year we are having as American citizens this might be the most modest of insults to one’s senses. I will not bore you with a long list of topics that we are all researching, staring at in disbelief, or counseling our friends and family about in this political, pandemic, and overall just chaotic-charged-debate season. You all have your top 10, or should I say bottom 10 headline grabbing crap to think about.

As to this one, consolidation is a fact of our business environment today. From CUs to CU vendors, to trade, and hopefully eventually regulators – options are declining, ideas are merging, and new competitive challenges and opportunities are emerging. 2021 and 2022 will be much of the same, and unfortunately the general business community will join us as all business segments reinvent themselves in a changing, devolving, and fearful confirmation of the “pandemic-charged” way to do things.

Government no longer has to spend the time to create laws, evolve regulation, or even consider the enforcements of mandates. Government now just assumes mandates are enough to move the majority of the herd out of the way. Sure, at the edge their will be dissenters and fringe resistance. But on balance the herd will fall into line and accept what appears to be the movement of the many. So why wouldn’t credit unions be subject to the same “go with the flow” mirage presented here?

I wonder. I worry. And finally, I plan.

I plan for first my allies that will emerge from this stronger, more confident, and more committed than ever before to foster strong cooperatives that are good planners, effective merger managers, and see how to integrate in the cooperative movement post all of the coming consolidation across our economy. These allies will live with their cooperative participants and push forward to prosper in the next era of our country and industry. They will lead, and they will be resolved to the fact that cooperatives will drive through based on the will of their owners to do the same. They will connect with a set of ownership-personalities that see more in their cooperatives than simply a banking channel, a kiosk, a website, a phone center, etc. These owners will see an organization, a community, and their personal solution worth BUILDING.

Do not fear the word MERGER. You have a MAJOR MERGER project ahead of you and so does every one of these credit unions that will survive. Get BUSY and MERGE people around the Power of Ownership in your efforts. MERGE your members, merge your owners, merge your teams, and merge the conviction not to give up or lean into the downside of credit union mergers as a business solution to wind things down. Look up to the merger project to accelerate things up.

Integrate for independence. We can do more together, while all along independent in charter, independent in the focus on our communities, and independent with a sense of creativity that is sometimes lost through merging as convenience, instead of merging with a purpose. See the opportunity in all CHAOS today and TURN the table on all of the marketers of downside themes, destructive platforms, and doomsday revolts. There is a flip side to every coin — make sure the positive side is up and in the light at the end of every day.

Tell Me Why I’m Wrong

NCUA Continues to Prove Almost Everything Government is Worthless Today

by Leave a Comment

Going back to 2016, the NCUA started an initiative to “evaluate the agency’s examination and supervision program.” One year later they had made changes but found they could only remove on site time by 30 percent. Since then, they’ve seemingly gotten no where–stuck in the research and discovery phase to this day, leading up to a recently shared Request for Information on how they might accomplish these goals…

All of government at the bureaucratic level is worthless today – land locked by resistance and paralysis of just waiting out issues real or made up. Leaders ducking the crowd for having to make unpopular comments and deceivers stirring the pot in a time lying is without challenge.

If I ran a CU, I would run amok with the audacity of a looter and the spirit of a pirate. Suffering no indignation or penalty for my boldness.

Worrying only about what I could secure before my deceptions would once again be called out.

Now is the time to be a pirate true of heart and young enough to be a passionate scoundrel.

And it appears that the local mayors have no trouble with being the most powerful pretenders in government today.

All of government is worthless today.

Live it up CU CEOs….and make some moves before the crowd even sees your motion.

NACUSO White Paper: Does it get you thinking? I am not sure it’s as simple as all of that…

by Leave a Comment

When I was young I was sure my success was based on consuming three peppermint patties every day – super food, and it was the magic ingredient for all things called success. Until one day my doctor related three peppermint patties more to my diabetes than anything else. Darn it, I was sure I was going to have a long career as a spokesman for dark chocolate and sugar. How could I be so wrong about the connection – you have to be careful. And that is why I am always careful when it comes to credit unions too. Credit unions and their members do a lot of work to be successful, and connecting the dots between their success and a single ingredient seems a bit misguided. Could it be as simple as hooking up with a CUSO?

So when I saw this white paper come across my desk, I was a bit surprised that NACUSO was drawing this picture for the markets to consider. Could it be as simple at this? CUSOs help CUs do a bit better than the other guy? Could it be as simple as firms with a customer-owner win-win architecture lead to a small advantage in some cases? Could it be possible that combining tech with additional operational resources means that business is more complex than just plugging into the net? Is there really an advantage to all of this stuff?

Something to ponder. But one thing is certain, at CU*Answers we take no credit for the success of our partners and allies in trying to serve members. That belongs simply to the people–members and staff–that believe a customer-owner is the missing ingredient for success. Make more, make winners every day, and leave the peppermint patties to misguided souls like me.

Take a look at NACUSO’s white paper and judge for yourself.