From A Childhood Of Hardship, To An Adult Life Easing Hardships Of Others

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SANTA ANA, Calif. — In the recent debate about immigrants, one of the points often lost in the discussion is the valued contributions that so many have made to this nation.

Rudy Hanley, who will be honored this week with the Herb Wegner Lifetime Achievement Award from the National Credit Union Foundation, is a noteworthy example. In 1957 at the age of 14, he left Soviet-occupied Hungary with his parents and younger brother to settle in the United States. He would eventually become CEO of one of the largest credit unions in his new country.

Reflecting on his childhood, he recalls a life of measured hardship. "In Hungary I saw one orange, once a year at Christmas, and I didn't know what a banana was. Coming to the United States was exhilarating; there were stores where everything was available. As a teenager, it was the greatest gift."

After the family settled in East Los Angeles, Hanley and his brother spent six months learning English in a "foreign adjustment" program with other immigrant children before being mainstreamed into public school. The faint traces of Hungary are still evident in his soft-spoken speech. While attending classes at the University of California at Irvine during the day—his family now included two daughters—he worked the midnight shift by stocking shelves at a supermarket.

Hanley's degree in mathematics landed him a job teaching math and computer skills to junior high school students. After two years he decided to enter law school and earned his law degree from Western State University of Law. He had plans to become a corporate tax attorney, but fate interrupted in the form of a call from a fellow classmate at University of California-Irvine, Randy Moore. Moore was an attorney at CUNA's Washington office; they were looking for someone to provide legal counsel as well as research and write a white paper about credit unions' tax-exempt status. Moore suggested that he apply for the six month consultancy; Hanley was hired and began a life-long love affair with credit unions.

Improving the Quality of Life for Others

"I just fell in love with the concept of credit unions," he said. "A financial institution that helped people of modest means; what greater job could anyone ask for to improve the quality of life for others?"

Hanley began working as a math teacher as well as head of research for the California Credit Union league. He joined what today is SchoolsFirst FCU, formerly known as Orange County Teachers FCU, in 1982. As CEO, he took SchoolsFirst FCU from $100-million in assetsn to $8 billion, with 440,000 members and 33 branch locations.

But the numbers tell only a small part of the Rudy Hanley story. He serves as a mentor and trusted colleague to many and has the ability to gain consensus from large groups, according to Steve Punch, CEO Pacific Service CU, Walnut Creek, California, $1 billion in assets.

"One of the really great things about Rudy is watching him work with a large group of very opinionated industry leaders at a meeting," he said. "He always starts with, 'I don't know too much about this and I'm sure most of you know a lot more, but…' He comes across more like Gary Cooper than John Wayne and he produces both consensus and results in the process."

"Rudy always is one of the smartest people in the room, but he works hard at making you feel that you are smarter," continued Punch. "It's always about the idea or objective for Rudy, not his ego. There is no higher praise that I can offer than to say he makes everyone around him better."

Corporate Challenges

Hanley was one of the individuals involved recently in persuading NCUA to allow credit unions to account for their assessment payments to the insurance fund to be accounted for over a seven-year period, which was not the agency's original intent. When asked if the credit union system could have done a better job of alerting credit unions to the problems of the corporates and US Central, Hanley was characteristically frank.

"All of us have fallen short. Credit unions lost sight of their responsibilities, me included. Credit unions put their emphasis on numbers rather than the mission. Credit unions started to concentrate on size, capital and growth. We lost sight of the mission."

Even though the corporate mishaps have provoked calls for increased governmental regulations in some quarters, Hanley disagrees.

"There are excessive regulations which hinder our ability to serve members," he says. "It also adds a layer of expense. When something goes wrong, Congress promulgates regulations."

The NCUA board passed a rule in December 2010 that requires that directors of federal credit unions should be able to "understand the FCU's balance sheet and income statement." While it is reasonable to expect directors to be financially literate, some credit unions seek out potential director candidates with specific expertise in law, accounting, data processing and other technical areas.

"The greatest contribution a board member can provide is an independent view and good reasoning skills to judge what management is doing," said Hanley. "I'm not sure that requires a lot of financial savvy. The basics of being a good board member are not changing: keeping the members' interests in front of management. If the board member exercises good judgment, that is more important than having technical skills."

When asked what makes him an excellent leader in the eyes of so many, Hanley attributes part of the answer to "being lucky and being at the right place and right time." But another part of the answer harkens back to those days of law school when he worked the midnight shift stocking shelves.

"You need to have a willingness to work hard and give it your all. Nothing replaces hard work and being inspired by what you do and surrounding yourself with great people."

A Generous Spirit

A component of Hanley's leadership style is a generosity of spirit that is evidenced by the many people he has helped during his career. He is an astute listener, according to Shruti Miyashiro, CEO of the $950-million Orange County CU in Santa Ana, Calif.

"He has an inquiring mind; he doesn't tell you what to do," she says. "He has a wonderful way of posing questions that make you think. The questions are challenging, but not the least bit intrusive. After you walk away, the experience is very inspiring."

One of the management ideas that Hanley espouses is that there are many different models of success and it's not necessary to replicate his business model or others, but one that is tailored to the members' needs, says Miyashiro.

"Rudy is a remarkable consensus-builder," she says. "We've all encountered people who have accomplished a great deal and like to pontificate, but Rudy doesn't."

Hanley's answer for his greatest professional accomplishment? It may surprise some. "I felt it was when we were able to get our only sponsor, the Department of Education, to agree to direct deposit. Their employees were 90% of our members in 1992, and it was really a team effort that made it happen."

Hanley and his management team are able to maintain the CU philosophy as an $8-billion organization, in part, due to a single common bond—school employees. But more is involved, of course. "When you have that closeness, you can build the loyalty. The affinity our members had with us becomes a little more difficult, because as you get larger, it becomes more of a challenge. But if you continually put the members' interests first, the members recognize that."

As for CUs, he said, "The movement will remain relevant as long as we stay close to our original purpose and mission."

At one of the many ceremonies where Hanley was honored and given an award, he said that "In Hungarian, the word 'you' is always capitalized, and the word for 'I' is spelled with a lowercase letter. This symbolizes the attitude we have toward the importance of others. We were raised to be grateful for everything we have, and I still carry this attitude with me."

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