Rekindling A 30-Year-Old Vision

Discussions held during the largest ever credit union conference still resonate today.

 
 

Thirty years ago this week, in December 1984, NCUA conceived and held the largest ever credit union conference. The unprecedented gathering in Las Vegas included every federal regulator and examiner, most state regulators and field staff, volunteers and managers from 800 credit unions, and trade association officials. More than 2,500 participants attended the conference to “share expertise and experience.” NCUA had to limit credit unions to two registrants only, and even then, the conference reached its capacity two months before it began.

Who Was There?

Can you name the attendees of the 1984 National Examiners' Conference? Check out the photo game at the end of this article

 

Why So Popular?

The meeting’s goal was to explore the challenges of operating in a totally new environment. The economy had pulled out of a recession with double-digit inflation and unemployment and now had an expanding GDP.

Recovery was occurring in the midst of a megatrend transformation from an industrial to an information society. Detroit, the Midwest, and the rest of the Rust Belt represented yesterday’s business leaders. The country’s economic momentum and entrepreneurs were moving to the Southeastern and Western Sun Belt states.   

Simultaneously, the financial system and other key sectors, such as airlines, were deregulating. Credit unions, banks, and savings and loans had been chartered as local quasi monopolies with government regulators setting precise limits on most rates and products. That day was over — now success would depend on the ability to compete in the open market.

Industry experts led panels, workshops, and case studies. The meeting’s gigantic educational effort resulted in more than 60 sessions with more than 300 speakers. All conference goers attended general sessions with speakers that included representatives from the Fed, the FHLB, and then-vice president George H.W. Bush.

Questions such as the ones outlined here were intended to stimulate debate:

  • Is the regulator obsolete? Will credit unions be taxed?
  • Common Bond Associations: Where should we go?
  • How can personal computers improve management decisions?  
  • How do credit unions evaluate the performance of the share insurance fund?

The purpose of this unprecedented gathering that brought together all segments of the credit union system was to, in Chairman Ed Callahan’s words, “discuss current concerns and share problem-solving techniques. Examiners need to be exposed to a wide range of ideas that will enable them to a better job … particularly in a deregulated environment.”

Preceding Events Form Common Efforts

In the 18 months prior to the conference, the credit union system and NCUA had undergone dramatic change during deregulation, including:

  • Adjustments to field of membership policies to respond to changes in the new economy.
  • Access to the Central Liquidity Facility for all credit unions through a partnership with the corporate system and a government lender sensitive to their needs in the event of a liquidity crisis.
  • Deregulation of all share and loan activity to the extent permitted by the Federal Credit Union Act.
  • Enhanced supervision using 5200 Call Report data, annual exams, and toll-free hot lines for credit unions to stay current on events.
  • Cost reduction in NCUA’s federal operating fee schedule of 64% over three years.
  • Restructuring of the NCUSIF along cooperative principles to become the strongest of all federally managed insurance funds.

The public press noted these changes, and credit unions had become America’s favorite financial institution, according to a consumer survey. In 1984 alone, shares grew 16.1%, loans grew 26.9%, and reserves grew 22.2%. In the first three years of deregulation, 1982-1984, total shares grew 54%, increasing total system assets to almost $100 billion.  

The Industry Needs A Vision For The Future Now More Than Ever

Callahan’s closing comment presented a vision for the cooperative system.

“We are the future,” the chairman stated. “Seventy five years of success should tell you what the future is — it’s been people in the beginning, people now, and it will be people in our future.”

That conference 30 years ago offered a glimpse of how special the future could be; yet, today, the industry still has not fully realized this vision of a cooperative system with all segments working in common cause for the member-owners.

A CUSO’s Efforts In Reigniting The Vision

One CUSO is trying to start a movement that could reignite this cooperative purpose from 30 years ago. CU*Answers has developed capabilities that enables credit unions to share data, quickly make data available, clearly measure comparisons, and enhance transparency for member-owners.

These are significant innovations in the examination process, but their purpose extend beyond making exams more timely and cost effective. CU*Answers believes that having the best, most innovative exam processes can be a key competitive advantage for the cooperative system.

That’s why a conference held 30 years ago still provides insight today. Back then, regulators and credit unions were in common purpose; they were not engaged in endless rule-making exercises or debates over future speculation that constrain opportunity.

The largest conference ever that brought together all of the stakeholders in the cooperative system did not happen overnight. It was the result of a series of confidence-building steps, system innovations, and open dialogue. All combined, these efforts built confidence that such an event would be meaningful and productive. It still stands as a beacon of hope for what can be, even in a system that has grown more than 10 ten times larger.

“We are all about people,” Callahan said.

That simple message is needed now in today’s financial system more than ever.

Who Was There?

Can you name the attendees of the 1984 National Examiners' Conference? Click here for answers.

RexJohnsonBarryJolletteSolo

A/B

EdCallahanMarthaSeeger

C/D

MikeRiellyAlanCarverMaryDunn

E/F

 
 

Dec. 19, 2014


Comments

 
 
 
  • Thanks Chip. Based on your account the NCUA stood on two pillars - advocating for Credit Unions and "safety and soundness" of Credit Unions. Somewhere along the way we have lost the very important pillar of having an advocate. If you look at the number of credit unions before 1984 and now we are losing our brethren at the rate higher than 300 a year. Why not take up the challenges of 30 years ago? How about as you wrote: Deregulation of all share and loan activity to the extent permitted by the Federal Credit Union Act. That would help keep a lot of border line CUs alive and save the sacred share insurance fund. What about expanding FOMs to serve those who want to join us. Bravo Chip
    Jordan Modell
     
     
     
  • Great reminder Chip. My God, 40 years ago I was a 32 year old punk who had just moved into the big leagues of credit union upper management at the largest CU in Indiana. I went to Vegas for my first time, sat in the back and listened to Ed reshape our world and the world of more than a few old guard. It was a meeting that moved me to believe that everything and anything could be changed for the better. No process, no rule, no reg, no agency was sacrosanct and couldn't be innovated to make both the NCUA and the credit union work better for the member. It was the Reagan message, less was more. Smaller budgets but better oversight. Effective efficiency. A truly transparent agency regime that practiced the word in all actions. The audacity of it all was impressive. The glimpses of such leadership since Ed's departure and the agency management team he built have been few and far between. Foolish youth that I was, I thought it would always be that way and that regulator and the regulated would forever forge a balanced alliance that worked together for the people who believed in the cooperative business model. Boy, what a dumbass I was at 32. In fact, I still think and hope we can return to a similar environment, so I probably still am! Let's keep the hope and work that much harder in 2015 to see a return to some of the objectives of that 1984 Las Vegas meeting.
    Vic Pantea
     
     
     
  • Thank you, Chip. This is an excellent reminder of the leadership principles that built the credit union movement - working together, dialogue, commitment, and a common purpose: serving members. You have been a beacon within the industry and your voice, your message is stronger than ever. Your blog also served as a challenge. Maybe 2015 is the year to ask our leaders to speak out; their voice matters and is critical at this time!
    Susan Mitchell
     
     
     
  • I have a strong regard for the careers and legacy of Chip Filson and Ed Callahan. I have experienced the impact of their accomplishments as a credit union professional, I have benefited from their counsel and the bar they have set as leaders, and I have grown through time I have spent with them both in the past and still today with Chip. They lead and have led not only with their ideas but also through their actions. This blog posting by Chip is a reminder that this NCUA has been lost to us all: an NCUA that would face diversity through exchanging ideas openly, an NCUA that would gather leaders with transparency, an NCUA that was aware our efforts were important to the American system, not just a risk, and, finally, an NCUA that inspired us to work with them and even follow their lead.    As we approach the time of year when we mark accomplishments and think about goals for next year, I reminded myself that we, all of us, have the ability to inspire the same kind of NCUA and leadership moments for our futures. Today is not so different from 20 years ago. We still need leaders, we still need a strong regulator, and we still need hope that our system can stand out from the crowd (Ed’s constant vision).   Thank you Chip for the reminder.
    Randy Karnes