Many organizations reserve external messages from the president and CEO for major announcements such as financial results, mergers and acquisitions, expansion plans, and new partnerships. Rarely do CEOs issue news releases or tweets about controversial topics such as politics or social justice.
Since June, however, in the wake of racially charged killings of unarmed black men and subsequent protests in all 50 states, CEOs of major U.S. institutions including Wells Fargo, Bank of America, Facebook, Netflix, Apple, and Disney have decried racial injustice and expressed support for the Black Lives Matter movement. They’re not alone. Credit union CEOs around the country also have come out in support of the movement.
Put The Principle To The Test
As topics of discrimination and economic inequity dominate the headlines, CEOs are finding themselves thrust into a new role: Chief Equity Officer.
Bill Bynum, CEO, HOPE Credit Union
In a sense, the BLM movement is a test of the credit union founding principle of concern for community, raising questions of fairness in hiring, upward mobility, and inclusiveness in the workplace.
Bill Bynum, CEO of HOPE Credit Union ($361.3M, Jackson, MS), said in a recent interview that the problems facing minorities are deep-seated and pervasive dating back to before the Civil War.
“When you look at where the health outcomes and the education outcomes are the worst … those are in the same counties and in the region where you have the highest concentrations of African Americans,” Bynum says. “Unfortunately, those communities have not been able to accrue wealth … places like Selma, AL, or Itta Bena, MS. The entire deposit potential in Itta Bena is just over $1 million. That’s not enough to finance the homes, the businesses, and the grocery stores that a community needs to prosper.”
Amy Thomas, Chief of Staff, Arlington Community FCU
On June 30, Netflix announced that as part of its plans to donate $100 million to support minority communities, it would make a “transformational deposit” of $10 million at HOPE Credit Union, a U.S. Treasury-certified community development financial institution (CDFI). Over the next two years, HOPE estimates the Netflix deposit will support financing to more than 2,500 entrepreneurs, homebuyers, and consumers of color.
Protests following the death of George Floyd while in the custody of Minneapolis police have generated greater scrutiny of all major institutions, and public statements from CEOs is fueling the dialog. The response was overwhelmingly positive after Karen Rosales, CEO of Arlington Community Federal Credit Union ($354.2M, Arlington, VA), emailed employees and members to say the credit union stands with its Black colleagues, members, and neighbors who are in pain. But members also wanted more.
“A lot of members said, ‘I hear what you’re saying, but tell me what you’re doing,’” says Amy Thomas, chief of staff at Arlington Community. “They wanted tangible things. They wanted to know how diverse our leadership team is and how are we ensuring our lending policies are equitable? Good questions, and our CEO has been responding to those questions personally.”
Stephanie Miles, talent acquisition and talent management consultant at CUNA Mutual Group, supports Black Lives Matter in Madison, WI.
Work To Do
Nationally, the number of African Americans in leadership positions lags behind the communities they serve. A 2016 Federal Reserve survey found 17% of credit unions members are black, compared with 12.8% of banking customers and 13.4% of the U.S. population. However, just 165 of some 5,800 credit unions — approximately 3% — have black CEOs. Even more telling, says Lynette Smith, CEO of TruEnergy Federal Credit Union ($129.4M, Springfield, VA), is only three credit unions led by Black women have more than $100 million in assets.
“There definitely needs to be more diversity, equity, and inclusion at the CEO level,” Smith says.
Jack Lawson, President and CEO, Clearwater Credit Union
Questions concerning how to create that diversity, equity, and inclusion are undoubtedly on the minds of CEOs. Some, such as Jack Lawson, president and CEO of Clearwater Credit Union ($597.7M, Missoula, MT), addressed the matter head-on in announcing the credit union’s recognition of Juneteenth, a celebration of the end of slavery in America.
“Clearwater is a credit union that was founded by eight Missoula police officers in 1956,” Lawson wrote in a news release. “Today, we are governed by an all-white board of directors and managed by an all-white executive team. We serve a predominantly white membership in the predominantly white state of Montana. We know some will ask us to stay in our lane. We know some would prefer we sit this out. We also know that silence is not OK. Black Lives Matter to us.”
Lawson continued, saying the problems of racism against African Americans, Native Americans, and other people of color are systemic, and the banking and financial services industry has been complicit in this racism. He outlined several programs aimed at driving change including plans to draft and adopt a diversity, equity, and inclusion plan in 2020, inclusive membership guidelines, and philanthropic pursuits to empower people, protect the planet, and build inclusive economies.
“We are listening,” Lawson said. “We know we have a lot to learn. We know we have work to do.”
How To Take Action On Diversity, Equity And Inclusion
Listen to our on-demand panel discussion with credit union executives as they discuss the current challenges facing our society and our industry in the areas of diversity, equity and inclusion. Discover new ideas as to how your credit union can play a meaningful role in pushing DEI forward.
Bend Toward Justice
There’s a sense that issues of diversity, equity, and inclusion are at the forefront of America’s collective conscience. For example, the Pew Research Center has tracked the use of the #BlackLivesMatter hashtag on Twitter since it emerged in 2013 with the acquittal of George Zimmerman in the shooting of Trayvon Martin, an unarmed black teenager in Florida.
Through the years, BLM posts have spiked for a week or two after racially charged incidents, peaking at 1.1 million tweets in 2016. However, However, all records were broken with 8.8 million tweets on May 25, 2020, following the death of George Floyd. Surveys have shown a majority of Americans support the protests for racial justice, particularly among Gen Z. A Morning Consult survey of 1,000 Americans ages 13-23, found:
Gen Z sees the coronavirus pandemic and Black Lives Matter movement as the two most impactful events of their lifetimes.
82% agree racism is a major problem in America; 79% agree Black Americans are frequently discriminated against.
67% say how companies respond to BLM and deliver on their commitments to address inequality will influence their decision to do business with or seek employment at those companies.
Michael MacPherson, President and CEO, Freedom Of Maryland FCU
Michael MacPherson, president and CEO of Freedom Of Maryland Federal Credit Union ($338.3M, Bel Air, MD), likened the movement to the social upheavals of the 1960s.
“Our mission of people helping people requires we not be silent in troubled times,” MacPherson says. “It requires we stand united with all people against racism, hatred, intolerance, and injustice.”
Janie Barrera, president and CEO of LiftFund, a San Antonio-based CDFI that works with credit unions to provide microloans to underserved businesses, quoted the Rev. Martin Luther King Jr. in an interview with the San Antonio Business Journal.
“The arc of the moral universe is long, but it bends toward justice,” Barrera says. “Achieving Dr. King’s vision requires that everyone has the opportunity to prosper through credit and education for their business. We believe standing up and voicing concerns against systemic racism will reduce economic disparities and close the economic divide that prevents too many black entrepreneurs from achieving their dreams.”
Maurice Smith, CEO, Local Government FCU
Maurice Smith, CEO of Local Government Federal Credit Union ($2.4B, Raleigh, NC), says he understands the conflict weighing on many Americans. Local Government FCU counts police officers among its 360,000-plus members, and Smith himself serves on a municipal police memorial foundation board and is a member of the North Carolina Sheriff’s Association.
“Protests awaken in all of us a reaction that should be addressed,” Smith says. “First, we learn about the underlying issues that brought about the protests. Second, we look at our world and develop an opinion on sides, morality, and messages. Finally, decide what action we should take. Even if we choose not to react, that inaction is a decision.”
“Credit unions were invented to address a social problem,” Smith continues. “Let’s not be dismissive of the real mission of credit unions. Providing financial products is only part of the story. Our trade is in financial services, but the reason we offer financial services is to remedy social conditions.”
Turning Words Into Action
To support racial equality, credit unions have many resources available right now, including the NCUA’s voluntary Credit Union Diversity Self-Assessment tool. According to the NCUA’s 2019 survey, which included participants from 118 credit unions:
55.6% of responding credit unions reported a leadership and organizational commitment to diversity.
48.2% reported taking steps to implement employment practices to demonstrate that commitment.
29% were monitoring and assessing their diversity policy and practices.
7.7% had procurement and business practices that promote supplier diversity.
17.2% demonstrated transparency of organizational diversity and inclusion.
Martin Eakes, CEO, Self-Help Credit Union
Martin Eakes, CEO of Self-Help Credit Union ($1.2B, Durham, NC), notes issues of inequality extend far beyond policy brutality.
“They come in the midst of the devastating COVID-19 crisis, a crisis that is disproportionately impacting communities of color,” Eakes says. “We feel the importance of our mission extra keenly today, and we will continue to push ourselves to live up to our values of equality and opportunity in every aspect of our work. That includes the services we provide, the policies for which we advocate, the ways we lift up our community partners, the choices we make when we invest in communities, and the ways we take care of our staff.”
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