Reflecting On Two Lifetimes

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A retirement typically marks the end of a career. But in the case of Bob Bianchini here, it will mark much more than that; the end of a second life that has meant living and working in a place that in his first life he would have never imagined.

And a second life that sometimes looks back on his first in disbelief.

Bob Bianchini will retire Jan. 25 after 11 years as president of the Oklahoma Credit Union League. He says he's proud of what credit unions in the Sooner State have accomplished over the past decade, proud of what the league has done in government advocacy and lobbying, and especially proud of the quality of credit union people with whom he has worked in the state.

But for all those accomplishments he also knows his career will likely best be remembered for what happened in 1990 1,550 miles to the East, when an embezzlement by a bank president whom Bianchini knew well brought down a private deposit insurance fund. That in turn forced the closure of numerous credit unions, and left furious Rhode Islanders without access to their savings in scenes straight out of a Depression-era bank run.

What would follow would be years of finger-pointing, accusations, criminal trials, Congressional and statehouse hearings, the end of all but one private deposit insurance provider, and whether it was deserved or not, a big, black eye for credit unions.

The Lone Bright Spot In A Tragedy

All that was a decade ago. Today, in his last days in the league's offices in Tulsa, Bianchini has an immediate answer when asked about his tenure in Oklahoma. "There's a uniqueness in the folks who are part of credit unions in Oklahoma," he answers. "There's always been a cooperative spirit in working together and accomplishing things. If that element does not exist, then leagues cannot accomplish anything."

For Bianchini, and the nation itself, what credit unions can accomplish together was never more evident than April 19, 1995.

Bianchini was in a league staff meeting when a field rep called in with news of an explosion at the Murrah Federal Building in Oklahoma City. By a strange twist of fate, the field rep was supposed to be in the Murrah building at the time of the explosion visiting with Federal Employees Credit Union, but had been delayed after deciding to stop at another credit union first.

At the time, no one knew just how devastating the explosion had been for the credit union and its employees, 18 of whom were killed. Bianchini left for the airport where he picked up his then 15-year-old son, David (who today is responsible for handling the Oklahoma league's website.) While at the airport, Bianchini said he and others watched news reports in disbelief, and the next morning made the 106-mile drive to Oklahoma City.

"I'll always remember the way credit unions embraced Federal Employees and took on reestablishing the credit union," said Bianchini. "It was something to behold. I have never witnessed something like that in my lifetime. By that next day Tinker Federal had dedicated itself to the restoration of Federal Employees. Tinker had converted its training room, and CEOs from across the state were there working to help members. There was an outpouring of assistance. It became a way of instilling in my son what credit unions are."

Events surrounding the tragedy at Federal Employees and its resurrection in the following years would consume much of the league's efforts. But Bianchini said the OCUL has accomplished many other things during the past decade.

"Initially we had very little presence with government affairs and that is the heart and soul of what we should be doing," he explained. "We really have established a very, very good organization in terms of making that happen."

Aiding the Oklahoma league's introduction to and growth in lobbying expertise was that Bianchini never had to overcome the hurdle of understanding how government works. He understood legislators and even regulators. He had, after all, been both in his first life.

An Unhappy New Year Phone Call

Bob Bianchini was president of the Rhode Island Credit Union League when he received a call on New Year's Eve, 1990, from the state's brand new governor. Gov. Bruce Sundlun wanted Bianchini to know that effective Jan. 1, 1991, one of his first acts would be to order closed all financial institutions where deposits were insured by the Rhode Island Share and Depositors Insurance Corporation (RISDIC). Sundlun further ordered that each of the 45 banks, savings and loans and credit unions would remain closed until qualified for coverage by the FDIC or NCUSIF. Many qualified quickly, but many others, with problem loans on their books, were unable to re-open for business, prolonging the pain for 350,000 Rhode Islanders who had gone six months without access to their savings, and keeping the story on the front page for much of the year. In all, nine credit unions never again reopened their doors.

The governor's phone call came as a disappointment, but not a surprise to Bianchini, who's life began the process of turning upside down in November of 1990 when state auditors concluded that $12 million had been embezzled by Joseph Mollicone, president of Heritage Loan and Investment Co., which was insured by RISDIC.

With rumors swirling, lines of panicked depositors seeking to withdraw funds spread from Heritage Loan & Investment Co. to all RISDIC-insured institutions. On Nov. 8, 1990, Mollicone, having already met with investigators, disappeared, spending the next 17 months on the lam. (He was recently reincarcerated after violating his parole.) With Mollicone missing the public and the press turned its anger toward many of those viewed as also responsible for the mess, including legislators and trade group executives. For Bianchini, that meant double the venom, for he was both, representing the 23rd district in the Rhode Island legislature in addition to his job as league president.

State Banking Commissioner Before He Was 30

As a young man Bob Bianchini became involved in political campaigns, including that of Frank Licht, who was elected governor. Licht eventually appointed a 29-year-old Bianchini as Commissioner of Banking in Rhode Island, where he oversaw all state-chartered institutions. While bank commissioner Bianchini came to know the state's credit unions and was approached by the Rhode Island league about taking its vacant managing director slot. After Licht was reelected, Bianchini accepted the job in 1971, and began his career in credit unions. Bianchini said he soon threw himself into his new work, becoming active in the Association of Managing Directors (which later became the Association of Credit Union League Executives and today is the American Association of Credit Union Leagues). He participated in a task force in Vancouver, B.C., that led to the creation of U.S. Central ("That was a thrill to me") and served as U.S. Central's chairman from 1976-78.

Decades before it became part of the job description, while at the league Bianchini had remained active in politics and was eventually approached by his state representative saying he was going to retire and urging Bianchini to run for the seat. "My first reaction was thanks but no thanks," said Bianchini. "But he persisted."

In 1978 Bianchini was elected to the statehouse to represent Cranston, R.I.

Providence became the home to some of New England's fastest growing credit unions and Bianchini and the league helped push through the legislature laws that fostered innovation, such as permitting state charters to offer share accounts and, later, a new deposit insurance company. But Bianchini, who noted he continued to make it a priority to walk his district even in off-election years, said that despite the innuendo and reports that would come later, he never sponsored any bill related to RISDIC or financial institutions. Rather, he focused on one of his "loves," which was education.

Working In the Statehouse

"I never sponsored a bill that would effect financial institutions, and that was on purpose," he said. "That's not to say my peers didn't come and ask me questions about bills affecting RISDIC. We were all volunteers making $300 a year. I spoke to doctors (in the legislature) if a bill affected the medical community."

By the same token, Bianchini said inferences in the media that he used his influence in the statehouse to kill a bill that would have required federal insurance for all state-chartered institutions were also wrong.

None of that mattered in the storm that followed the declared insolvency of RISDIC.

"Initially I believed we could have pulled together the resources, human and financial, to resolve (the liquidity problems)," Bianchini said.

The Providence Journal-Bulletin would eventually win a Pulitzer Prize for its coverage of what was widely viewed as a scandal, and Bianchini's name appeared prominently in that coverage. Today, Bianchini says he doesn't dispute the facts that were reported. He disputes what was missing.

"As often happens it's not what was said in the press, it's what was not," he said. "The approach taken by the press was that the entire private insurance program was a scheme, a scam that was endemic to Rhode Island. That was not the case; there were a number of private insurance companies."

Bianchini also stresses another point. "No one misunderstood that there had to be a better way to tie the private insurers together and that a broader base was needed," he said.

The reference was to the so-called "tall tree" insurance scenario in which one large institution can fall and damage all the others.

Bianchini said that he and others within the credit union community had been actively working to help spread that risk among the private insurers, and in the years prior to RISDIC's collapse there were ongoing discussions among the share insurers, CUNA, CUNA Mutual and others about those tall trees.

In remarks before a meeting of the Georgia Credit Union Affiliates in Savannah in May of 1994, Bianchini said, "It was no secret that a single state insurer did not possess the broad base of risk distribution necessary to underwrite a major loss."

That became obvious when Heritage Loan & Investment was seized by regulators.

Blame & Accusations

"I was looked at as someone who helped establish an environment that was in the best interest of a guy who ran off with $13 million," noted Bianchini, who knew Mollicone. "What I was blamed for and accused of was supporting private insurance. I did. But what was never reported was that four or five years prior to the embezzlement, private share insurance was the only alternative for credit unions in Rhode Island."

That's due to one of the ironies of the RISDIC crisis, according to Bianchini: that NCUA was viewed as the White Knight in rescuing some of the RISDIC credit unions, even though it was an NCUA decision that led to the creation of RISDIC in the first place. Following a difficult legislative session in the early 1970s, Rhode Island's state-chartered CUs were approved to offer checking accounts. But NCUA's Executive Director, Gen. Herman Nickerson, Jr., rejected insuring the funds in the checking accounts.

"Without that I don't think RISDIC would have even gotten off the ground," said Bianchini.

There was another unreported irony in the RISDIC failure, according to Bianchini. In 1976, after the state required deposit insurance, the state regulator said it would establish a second insurer if the state's banks weren't permitted to join RISDIC. "Looking back, we probably should have told the state, 'Go ahead. Take your best shot,' and kept RISDIC a credit union-only insurance fund," Bianchini said during his Georgia remarks.

An 'Awful Time'

The two years that followed the failure of Heritage and the shutdown of the banks and credit unions became a low point for Bianchini.

"It was an awful time," he said, noting his own savings and that of his mother were in one of the shuttered credit unions. "It was the worst time of my life. I've never experienced anything like it and I had been in the legislature and president of the league for almost 20 years. It was terrible, absolutely terrible. It was so intense in terms of the media and the opportunities taken to make headlines and embarrass people, and not just myself."

Bianchini, who was called to testify before the commission investigating RISDIC, watched as the Rhode Island league was "decimated" by the scrutiny and the nine credit unions that remained closed.

Bianchini also watched as not just his friends in the Ocean State's small community disappeared, but America's credit union community kept its distance. With media reports quoting members as saying they would never do business with a credit union again, Rhode Island became a big piece of mud on the credit union white hat, and the trade groups repeatedly emphasized the problem was unique to the state.

"It became a circus, and you couldn't blame people for not wanting to be involved," he says now. "Do I have some disappointment that we really didn't get any assistance? Yes."

In June of 1991 Bianchini resigned from the league, which is now part of a larger association for credit unions in Massachusetts and New Hampshire. He finished out his term in the legislature in 1992 and didn't run for re-election, and eventually went to work for an engineering firm.

But he also had stayed in touch with his former colleagues, and in doing so, helped to start his second life.

At the invitation of Georgia CU Affiliates President Mike Mercer, Bianchini attended the Georgia meeting in 1994 where he spoke. He was later asked if he was "ready to get back into credit unions."

"I never thought I would," he said. "But at that meeting I realized how much I missed league work."

Bianchini said he was offered a few opportunities that he turned down before the Oklahoma league came calling. He was familiar with the state having done an analysis of the league in 1987 while with the Association of Managing Directors. He interviewed with the league's board, which asked questions about Rhode Island, but while flying back to Rhode Island he admits thinking, "I did not think it would lead where it did."

Not long after, then OCUL Chairman Florence Rogers called and asked, "Are you ready to come to Oklahoma?" After the hiring was announced in the Providence media Rogers' phone was deluged with calls from Rhode Islanders critical of the hiring. In another of life's turns, it would be Rogers, the CEO of Federal Employees Credit Union who barely survived the bombing in Oklahoma City, and her credit union that would come to exemplify the spirit of cooperation Bianchini said he has found in Oklahoma.

What Shouldn't Be Forgotten

"I think it is so important that we protect the cooperative principles," he said, "and that we never forget what makes us successful. I hate to see things occur that don't respect those principles."

As he retires, Bianchini considers himself an Oklahoman. At his church he met the Oklahoma woman he would marry in 2002, his wife, Lana. But if both feet are in Oklahoma, he still has family, including three children and what will soon be five grandchildren, in Rhode Island, and he plans to look at rental property in the state.

"A part of me will always be very attached to Rhode Island," said Bianchini, who is being succeeded as league CEO by Lisa Finley. "I came to Oklahoma and it was like a world apart. I never thought that at age 50 I would have had that kind of transition in my life."

Bianchini is hopeful credit unions will not have to experience a similar transition. "We can accomplish anything as a movement if we act cooperatively," he said. "We are limited only by our collective imagination and that means we are limitless."

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