By Frank J. Diekmann
You never know from what corner of the world you might hear an observation made that changes how you think about something. Or from whom you might hear it. Or whether you will ever cross paths with that person again. In my case it was a funny but pretty insightful remark made by a woman from Macedonia. And earlier it was a passionate, conscious-tugging admonition from a gentleman from Kenya. On the flip side, you also never know when your elevator pitch won't leave the ground floor.
I heard and learned from those people and many others when the World Council of Credit Unions hosted its World Credit Union Conference in the Bahamas last week. Americans are often criticized for a worldview that is sadly parochial and dismissive of the rest of the planet (don’t think so? Watch this Jimmy Kimmel Show clip of people being asked to name any country on a world map. Any country.) You won’t see so much of that kind of dismissiveness from the Americans on hand for the WCUC, but you also won’t behold a lot of appreciation for what is going on in other countries, either. And that’s too bad.
The world has changed, and with it so have the world’s credit unions, especially those in what were once called third-world countries but which are now known as “developing” (with CUs playing some expansive roles in the development) and which have leapfrogged forward in many ways.
It wasn’t that long ago at WOCCU meetings you would encounter movements struggling with the basics of CU operations. I once had a good friend from Australia share with me his excitement at helping to establish CUs on some Pacific islands. When he returned a year later, the CU volunteers were happy to share they had lost money, just as they said he had instructed, after misunderstanding the whole “not-for-profit” thing. For the most part, that stories are no longer told.
In 1990, WOCCU created its PEARLS measures for key areas of CU operations, and while it remains a foundation, many credit union movements have moved beyond the basics and even into some pretty sophisticated offerings themselves. You just have to listen. Here’s a quick trip around the world (CU Conference) and some of what you might have missed:
Attention Privileged People
One of the biggest difference between credit unions in the U.S. and those in many other countries is how they view their roles. U.S. CUs are financial institutions that also play a role in the community. In many other places, credit unions view themselves as community institutions that offer financial services. Part of that is simply because in many parts of the globe the credit union is the onlyorganization in cities and villages, where other provident enterprises and even government are lacking or absent.
I’m lucky enough to be among the judges in one international CU organization’s annual awards program recognizing individual achievement, and nearly every entrant talks not just of the credit unions, but of using cooperatives to address food challenges, markets, education and even electricity.
At the World CU Conference, George Ombado, CEO of the African Confederation of Cooperative Savings and Credit Associations, which represents credit unions in 28 countries, challenged CU leaders to think beyond just their role in finance when it comes to their communities.
“When we talk about sustainable development, it means we must try to balance the needs of the economy and society with our living environment,” said Ombado. “What is the objective of the credit union? That is a question we must as ourselves. Is it to make profit? I think no. It is to meet the needs of the people. We cannot avoid the pain, but we can help to make it less painful.”
Ombado’s perspective isn’t limited to Africa, as he shared an experience that’s as true on the North American continent as it is on his own.
“Cooperation among cooperatives–we don’t seem to do so well in this particular area,” he acknowledged.
And Ombado had one other little reminder for everyone in credit unions, especially those staying at the Atlantis Resort in the Bahamas: “This room is full of some of the most privileged people in the world. You may not think you are privileged, but if you think about the billions of people in this world, you are among the most privileged. And you need to thank God for that.”
The Future of MAGA?
At international CU gatherings of the past few years there is a fair amount of discussion about what’s happening in politics in the U.S. For many Americans, it may be the first time they are exposed to people from other countries who have questions. For the perspective of one former advisor to presidents and prime ministers on what might lie ahead, how Donald Trump became president, and more, go here.
You Are Nothing But Data
Enjoy privacy? It’s likely you’ve given up much more than you realize. Or, as Pippa Malmgren observed during the WOCCU meeting, “Amazon’s Alexa has been subpoenaed in trials because it’s such a good witness. Your vacuum cleaner is gathering data on size of your rooms; your refrigerator is capturing data about you and your life; sensors in your shoes capture data on the way you walk and your health. Do you think the sensors in beds are only capturing data on how you snore?” For more, go here.
Elevator Pitch Never Leaves Ground Floor
After getting into an elevator at the Atlantis, a young woman said to me, “I see a lot of you wearing those name tags; what’s going on?”
Wow! it occurred to me; an opportunity to make an actual elevator pitch.
Me: It’s for a conference of credit union people from around the world. (Seeing the look on her face, I added,) “Do you know what credit unions are?”
Young Woman: No.
Me: They are (I almost said financial institutions, but realized that jargon wouldn’t work) like banks, except you are a member, an owner, and you have more control over your own money.
As we approached her stop on the eighth floor, I knew I. Had. Nailed. It. Until…
Young Woman: “So, do you ship them here?”
I really didn’t know how to answer.
Making Space on the Board
Board turnover can be a touchy subject in credit unions. Ironically, the board members who are most innovative and open to change realize the need for new blood, and step away. Those who are often least innovative hang around. And around. And… So there was an interesting observation made by Stacey Walker, a board member at XCEL FCU in New Jersey, during an Underground Collision discussion held in conjunction with the WCUC.
Walker framed her thoughts in terms of creating her own legacy. “To me it’s a personal,” said Walker. “I’m at the crossroads myself. I was the young professional who joined my board years ago, and as I get older and age out I think what’s next. Who do I pull behind me? What’s my legacy? I noticed in my credit union, if we identified a person who was young, ready, willing to the work, we didn’t have space on the board. All the positions were filled. I looked at this and thought I’ve done this for some time, and I’m willing to step back. I said I want to make space. That led to a lot of discussion, a lot of pushback, but also other volunteers on the board doing self-assessment. Ultimately, we did have some individuals who said this has been great, but I’m going to make space as well.”
A Universal CEO Challenge
Paul Norgrove, CEO of Police CU in the U.K., had this observation that will have CEOs everywhere nodding in agreement: “Our tech guy made me feel stupid in two days. I hate when his performance review comes up. He’s like, ‘How much are you going to pay me?’”
A One Question Test
Eleonora Zgonjanin Petrovikj, general manager of FULM Savings House in Skopje, Macedonia, offered a number of intriguing observations on the whole challenge of age and generations, including this funny but probably pretty true one-question test for whether a new employee is adaptive to change.
“When I am (interviewing) a new person, I ask, ‘What do you do for your holiday?’ I am not impressed if they go to the same place every year. If they cannot change where they go on holiday, how can they make the change needed to make at credit union?”
(CUToday.info will have expanded coverage of Ms. Petrovikj's comments and those of four others in our The Feature section this week.)
A Turnaround Story
One small U.S. credit union shared its story of how it has gone from the brink of conservatorship in 2010 to 2.67% annual ROA today, including 27% annual loan growth. Its rebound began with a “decision to survive,” and that started with cooperating with other credit unions. For more on the story of Ironworkers USA FCU, go here.
Extra! Extra! Reading All About It
It’s safe to say that no American CU reps returned home to face news reports of the money spent to travel to the Bahamas (which may not be a good thing, as CU board and management travel costs should be disclosed to the members. If you don’t want members to know, maybe you shouldn’t be heading to the airport. Just sayin’.)
The same can’t be said for Ireland’s CUs, which regularly find their international travel expenses splashed across the press. This most recent international CU meeting was no exception.
“Credit union board members and partners head to Paradise Island,” read the headline in Ireland’s Business Post. The story noted a dozen CU execs were traveling at a cost of €60,000. “A dozen senior Irish League of Credit Union figures have landed in the Bahamas for a week-long programme of learning and fun courtesy of their members’ funds,” the story began.
And Speaking of Costs
Anyone who has ever been to the Atlantis Resort comes to understand that what eventually sank the island after which it is named was the weight of the gold it had collected from its visitors.
I travel pretty regularly and sadly have become accustomed to being shaken down by payday loan industry hotel business models, mob-inspired add-ons, this-definitely-isn’t-Costco restaurant pricing, and the ubiquitous rip-off “resort fees” even at places that are four stars short of being resorts. But the Atlantis Resort takes costs to new heights—or perhaps, more appropriately, I should say new depths. I won’t itemize just how expensive the property is; will say only that the “side” of vegetables at the Virgil’s barbecue restaurant inside Atlantis is $24. That is not an anamoly.
Hey, I do get it. The World Council, like every association, is in a tough spot. Whether anyone cares to admit it or not, it’s location, not agendas, that drives meeting attendance, and meetings revenue increasingly gooses the bottom lines of associations. And at a meeting like the World CU Conference, the reality is you need to draw a lot of Americans, who made up half the attendees at the Bahamas gathering, and their deeper cooperative pockets in order to cover the costs and make the meeting possible.
Preaching Vs. Practicing
But there is also another issue at play here that is truer for the World CU Conference than any other credit union event, and that is the disconnect between the preaching and the practicing. There was all the usual preaching about serving underserved communities and just everyday folks, including in the U.S., where many are in fragile economic states. Outside the U.S., the World Council is trying to find ways to help millions of desperate refugees around the world. And yet the practice is to discuss all that while staying in pricey Caribbean resorts (even if you don’t order the side of vegetables).
By the way, I was told most of the workers at the Atlantis are paid the country’s minimum wage, $5.25 an hour, plus tips for those who get them.
As they say so often in politics, the optics aren’t good. And as the Irish press reminds, never forget all of it is “courtesy of their members’ funds.”
Five Star Discomfort
If there is some good news here it is that that kind of self-reflection has been raised before and by a board member of the World Council itself. WOCCU’s former chairman, Brian McCrory from Northern Ireland, told credit unions when they were meeting in Vienna in 2017, “I must confess that sometimes I come to these credit union conferences and it creates a little sense of personal discomfort. I know that there are many developed systems in the world and many of us exist in economies that are vastly richer than other parts of the world. Even in Ireland, a first-world country, the average deposit and loan tends to be in the low and modest thousands. Many of our people are still suffering because of the global financial crisis…“Sometimes, when I come to these conferences and I look around and see us resplendent in our suits and finery and five star hotels, in many instances it’s beyond the widest experiences of many of our members, and that leaves me uncomfortable. It may be common in developed countries, but for half of our worldwide membership, that is not attainable for them.”
If there is any bad news, it's that I’m not seeing anyone else willing to make the comfy credit union folks squirm a bit.
You can read Mr. McCrory’s full comments here.
The 2020 Vision
This year’s event drew more than 2,000 people from more than 60 countries. The World Credit Union Conference is being held next year in Los Angeles in conjunction with CUNA’s America’s Credit Union Conference, July 19-22 (that’s right—it will be Nirvana for you fans of abbreviation, as it’s the CUNA ACUC WOCCU WCUC in LA). Should you attend, make sure to listen carefully and never forget, as Mr. Ombado reminded, “This room is full of some of the most privileged people in the world.”
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.infoor @FrankCUToday on Twitter.