by Mark S. Brantley, Esq. – CUEvangelist

The late Luther Vandross was an American singer, songwriter, and record producer. His elegant, soulful style of music graced the musical airwaves with hits such as “Never Too Much,” “If This World Was Mine,” and “Here and Now” to name a few. But the most memorable song I remember is entitled, “A House Is Not A Home,” a 1960’s original song written by Burt Bacharach and Hal David and first performed by Dionne Warwick.  It was later re-recorded by Vandross in 1981. In the first stance of the song, Vandross would serenade, “A chair is still a chair, even when there’s no one sittin’ there, But a chair is not a house and a house is not a home, when there’s no one there to hold you tight. And no one there you can kiss goodnight.”  The lyrics are simple, yet they illustrate a profound truth about homeownership. That is, a house is a home when a family is there, loved ones are kissed goodnight, and parents hug their children tight. Conversely, a house is not a home unless a credit union is there to provide its members the financing needed with reasonable rates and friendly terms. Credit unions have a long history of turning houses into homes and have been there financially when other institutions have not.

A house when constructed is just that – a house. Whether a mansion in Beverly Hills, a newly renovated brownstone in Harlem’s Strivers Row, or an A frame house in Boise, Idaho, when unoccupied it is only a standing structure with a roof, walls, pipes, and other fixtures.  Without a doubt, that house can become a home when a credit union is there to provide the mortgage. Credit union roots run deep in our communities of modest means because they are the stalwarts against the social injustices of anti-family redlining and predatory lending. It’s the credit union philosophy of “people helping people” that drives lower mortgage rates and access to credit to allow individuals to realize the American dream of homeownership.  That said, the placement of families and individuals in homes is only part of what credit unions do. Staying in one’s home is also a priority. Typically, credit unions keep member mortgages in their portfolios and do not sell them onto the secondary mortgage market. So, when families experience financial hardships, they can count on their credit union to see them through challenging times.  Many credit unions have developed coronavirus mortgage relief programs. For example, Desert Financial in the state of Arizona has provided struggling homeowners with a reprieve from their mortgage payments through forbearance and moratoriums on foreclosures. This is what makes credit unions different!

There are countless stories of credit unions assisting homeowners to achieve their goals. GreenState Credit Union of Iowa has recently committed one billion dollars over the next decade to help close their state’s racial homeownership gap (Credit Union Times, March 10, 2022). In California, Logix Federal Credit Union just in April rolled out a mortgage platform called “Mortgage Coach” to help members understand how various home financing strategies can best actualize their homeownership dreams and build wealth. Additionally, Redwood Credit Union announced a multi-million dollar partnership with Napa County to develop ADUs. ADUs or Accessory Dwelling Units are small residence buildings nicknamed “granny flats” built from the ground up by existing homeowners who desire to provide needed housing to those who may be unable to afford a market rate apartment, co-op, or condominium. This innovative ADU credit union loan product opens the door to existing homeowners of modest means to access capital they would not otherwise be able to obtain.

Although mortgage originations overall are forecasted to be down in 2022, the Mortgage Bankers Association has predicted home purchases will increase this year compared to 2021 and will continue to grow in 2023 and 2024 according to their April 2022 report. For future homeowners, the outlook is bright since homeownership is the key to building generational wealth and is the largest source of wealth among families. The National Association of Realtors (NAR) reported “A homeowner who purchased a typical home five years ago would have accumulated $146,200 in home equity, of which $125,300 would be from price appreciation of 86% of total home equity gains” (NAR, Metro Area Housing Wealth Gains). Unfortunately, NAR also noted “the U.S. homeownership rate experienced the largest annual increase on record, though Black homeownership remained lower than a decade ago (NAR, Racial Disparities in Homeownership Rates).”  This fact makes the wealth gap between White and Black families more apparent.

That said, credit union financial inclusion is not just a grassroots bottom-up effort but should also flow from the top down. Fortunately, the National Credit Union Association (NCUA) has made financial inclusion a top priority. Current NCUA board member Rodney Hood when he was chairman back in 2020 announced that financial inclusion is the “civil rights issue of the 21st century.”  He further stated, “There is a clear business case for credit unions to enhance their outreach to underserved and underbanked populations. The NCUA will dedicate resources from across its lines of business to bring more Americans into the financial mainstream and provide them with greater access to safe and affordable financial services” (NCUA, October 2020). Hood’s ACCESS initiative “through credit, education, stability, and support” is a big step forward to narrowing the wealth gap among minorities and the underserved through homeownership and financial equity.

Aligned with ACCESS, the African American Credit Union Coalition (AACUC) is also commended for its efforts in bringing diversity, equity, and inclusion to a financial cooperative industry that has embraced these important values as its 8th core principle.  AACUC is actualizing its commitment to change via three signature programs: a “Commitment to Change Conversation Series,” the Diversity, Equity, and Inclusion Leadership Academy for Financial Professionals, and the “Financial Change Experience” credit card and pre-paid card that debuted this Spring 2022.

Yes, it is true a room is not a house, and a house is not necessarily a home. But whether you prefer Dionne Warwick or Luther Vandross, we can all agree that a house is not a home unless a credit union is there.

“Originally published on CUInsight.com.”

What is CUEvangelism (q-van-gel-ism)?

If evangelism is simply defined as the spreading of the gospel or the good news of Jesus Christ. Then, CUEvangelism is the spreading of good news about credit unions. Credit unions are not for profit, member owned, financial cooperatives that encourage individual saving, provide affordable loan products and access to credit as well as a host of other financial services. Credit unions are quite different than other financial institutions, not just in their governance structure, but in the philosophical value of “people helping people.”

History teaches us that Jesus was the most transformative person to have ever lived.  He sought out the poor, the wounded, the powerless, and the hopeless. He fed the hungry, healed the wounded, gave power to the powerless and inspired hope for the hopeless. He served his fellow man!

In a way, credit unions are on the same mission seeking out the unbanked and the underserved. Giving hope to families, credit unions continue to provide services to those who are in financial need.  Since the financial crisis of 2008, credit unions have stepped out of the financial services shadows and are actualizing the motto, “Not for Profit, Not for Charity, But for Service!”  Credit unions are not your local churches, but they do want to financially transform lives.  They want your latter to be better than your former.  Credit unions want you to tell your financial story.  They want you to testify to your neighbors and to your friends the good news about financial institutions called credit unions.  The CUEvangelist is here to “Spread the Good News About CUs!”

Train up a child in the way he should go: and when he is old, he will not depart from it.

Proverbs 22:6

Growing up in an entrepreneurial environment, I was fortunate to learn about money and finance. Math was one of my best subjects in school and I endeavored to become a certified public accountant. I remember the days when my dad sent me to the bank to obtain coinage for the family’s retail store operation. For me it was a profound moment in my life because my father had instilled in me a great level of experience, trust, and responsibility. Despite growing up in a business environment, I was never introduced to credit unions until after college. The Church where we worshipped and attended Sunday School had a credit union, but I was unaware of its existence until well in my late twenties. As I reflect on my childhood, I wonder if credit union professionals and volunteers were doing the best job at creating credit union awareness or could they have done better”?   How many others graduated from high school without knowing the difference between a credit union and a bank? Teaching young people in schools at an early age is a great way to introduce credit unions and the credit union difference. Young people should also learn about personal finance and credit unions can take the lead in making sure that happens.

In a report entitled, Translating Financial Education into Behavior Change for Low­Income Populations, the research authors claimed, “those who are taught about personal finances at a younger age tend to do better financially than those who were not.” The study strongly supports the notion that financial literacy training should be part of an early childhood education. Parents however should not wait for someone else to teach their children about finance. Be proactive and take your son or daughter to the local credit union in your neighborhood. If you are financially able, open a savings account in their name. Typically youth accounts do not incur minimum balance service charges so it is a great way to promote savings. Instruct your child how to count money, how to save it in a piggy bank, and then have your son or daughter personally deposit it at the credit union. Have her interact with the member representatives and tellers; also take the time to explain to her what is on the deposit receipt. Finally, when the credit union statement arrives in the mail review it together. The savings dividend is a great entry point to discuss interest rates and A.P.R.s.

Make it your business to train your child at an early. But more importantly, make sure they are proficient in math. It’s great to teach children the concepts of money or finance (e.g., interest rates, assets, liabilities, and mortgages to name a few), but the underlying basis of each financial term is mathematics. Generally speaking, “the focus should be on math first, not money” stated Harvard Business School’s professor of finance Shawn Cole in a February 2015 Wall Street Journal article. He said, “A lot of decisions in finance are just easier if you’re more comfortable with numbers and making numeric comparisons.” In the study conducted by Professor Cole, he concluded that students who came from states that required additional math courses, simply did a better job at managing their credit.

Finally, many studies have shown the connection between financial education and sound personal finance practices. There is no doubt financial literacy training has its place. Overall, adults are not doing well managing their personal finances. The 2015 Consumer Financial Literacy Survey conducted by the National Foundation for Credit Counseling published the following key findings: 1) only 40% of U.S. adults claimed to use a budget to closely track spending and 60% did not, 2) only 30% of adults use household income to save for retirement, 3) a third of adults stated that their credit card debt is rolled over month to month, 4) 75% of adults agree they would benefit from advice and answers to everyday financial questions from a professional and 25% strongly agree about the same, and 5) 52% of adults admitted to not knowing their credit score and 66% percent did not obtain their credit report within the last year.

Give children the financial head start they need. Train them up in the way they should go and when they are older they will not depart from it.

http://www.cuevangelist.com

“Behold, how good and how pleasant it is for brethren to dwell together in unity!” Psalms 133:1

On Wednesday, April 26, 2016, the credit union movement scored a huge victory in a show of unity between the Credit Union National Association (CUNA) and the State Employees’ Credit Union (SECU) of North Carolina. The $32 billion asset-sized credit union under the leadership of President/CEO Jim Blaine decided to re-affiliate its membership with CUNA, the largest credit union trade organization in the country.

Mr. Blaine withdrew SECU’s membership in 2014 over the requirement that his credit union must be a member of both CUNA and its state league. As a consequence of SECU’s disaffiliation, some argued that CUNA decided to launch a taskforce to review its longstanding policy of dual membership. Subsequently, the newly formed taskforce recommended to the CUNA board to change its bylaws to adopt the concept of membership choice. After CUNA’s membership overwhelming approved the by-law change for choice, SECU chose to re-affiliate and was welcomed back into the trade organization with open arms after a two year “leave of absence.”   In addition, it appears that President/CEO Maurice Smith of Local Government Employees Credit Union, a large credit union also in North Carolina, played a part in helping to facilitate SECU’s re-affiliation (pictured in the April 27^th Credit Union Times article with Jim Nussle and James Blaine).

In a family, brothers and sisters disagree, but at the end of the day each sibling is welcome to return home. Dissent and constructive criticism can give pause to self-examination. Iron sharpens iron and as a movement we become leaner and stronger. An important voice in the credit union industry has returned to CUNA and the trade organization has taken a hard, deliberate look in the mirror, saw the need for change, and restructured for the better. That is the credit union difference!

Behold, how good and pleasant it is for brethren to work together in unity. Welcome home Brother Blaine, welcome home!

http://www.cuevangelist.com

“And I will restore to you the years that the locust hath eaten, the cankerworm, and the caterpillar, and the palmerworm…….” Joel 2:25 KJV

Last week, the National Credit Union Administration (NCUA) announced that Goldman Sachs had agreed to pay the federal regulator $575 million to settle claims the agency filed against the investment bank. As the liquidating agent on behalf of failing corporate credit unions, the NCUA litigated claims against certain large banks like Goldman that sold faulty mortgage-backed securities to the corporates prior to the financial crisis of 2008. Although highly rated, these same mortgage-backed instruments plunged in value, resulting in huge losses and ultimately caused the failure of five large corporate credit unions. An important point to make here is that the credit union industry did not receive a bailout from the federal government. On the contrary, the NCUA turned to natural person credit unions to absorb the losses via payments into the Temporary Corporate Credit Union Stabilization Fund and share insurance fund premiums. Seven years later and the crisis now over, it’s time for the NCUA to provide a little R&R. It’s time to refund and restore capital back to natural person credit unions.

Both leading trade organizations have gone on the record to state that the NCUA should someday return or refund capital back to natural person credit unions. The Credit Union National Association (CUNA) stated, “We welcome the news that NCUA has settled another suit related to the corporate stabilization fund.  This will increase the amount that is ultimately refunded to credit unions, although those refunds are unlikely to occur for a few years.” According to the National Association of Federal Credit Unions (NAFCU), “NAFCU will continue to urge the agency to pursue its aggressive legal recovery efforts and to be transparent in how and when the funds recovered will be refunded to credit unions.” To date, the NCUA has obtained well over $3 billion in recoveries from large banks. Moreover, UBS has agreed to settle with NCUA for $69.8 million according to Reuters’ April 15, 2016 article and the agency is also poised to receive an additional $50.3 million from Credit Suisse Group AG. In the coming days, it is my hope that the NCUA will be more transparent regarding the settlement costs (e.g., attorney fees) and one day report the good news of credit union R&R. It’s time to refund and restore capital back to our credit unions!

The cuEvangelist – http://www.cuevangelist.com

“Why was not this ointment sold for three hundred pence, and given to the poor? This he said, not that he cared for the poor; but because he was a thief, and had the bag, and bare what was put therein.”      John 12:5-6 (KJV).

Credit Unions do recognize the need to be charitable and to assist the poor.  However, charity is not our mission. The mission of credit unions is to render quality service and to provide affordable financial products to its members. Credit unions should aim to become the preferred choice for financial services. Profit is not the primary motivation, rather it is only a means to accomplish the mission of providing services and returning gains back to members. Members then reap benefits through lower interest rates, better products and delivery channels, and reasonable dividends.  A focus solely on high margins could result in mission failure.  In addition, credit unions are not beholden to shareholders.  Therefore, the long-term values of thrift, service, and sustainability are not sacrificed for the short-term strategies of immediate returns.

Judas’ strong desire to profit caused him to lose sight of what he was chosen to do – to serve.  In contrast, Mary the sister of Lazarus was very motivated and thoughtful in rendering her service. There while sitting at Jesus’ feet, she was not careful to open the expensive alabaster box and began to pour the fragrant ointment upon His feet.  However, Judas who held the moneybag as treasurer objected to what he perceived was waste. Rather than using it on Jesus, he felt the ointment should have been sold for a profit and then given to the poor.  Judas utilized the profit motive under the selfish pretext of charity.  Why? Because in reality, he was a thief.  He had no intention of being charitable and every intention of being profitable, but for himself.

Greetings all and welcome!  The cuEvangelist is committed to the spreading of the good news about credit unions and the credit union philosophy of people helping people. Credit unions are financial cooperatives that are Not for Profit, Not for Charity, but for Service!