"My board would never allow me to hire a former banker for any senior-level position."
I had not been to a credit union function since I retired about six months ago, but during this past month I had the opportunity to attend two in my new role as a board member, with a speaking engagement at one of them. When a credit union CEO made the remark, above, from the floor, I was jolted back into the reality that such narrow-mindedness remains a part of credit union DNA.
Hearing it said out loud made me recall my early experiences in credit unions three decades ago when such xenophobia was rampant in the magical world we call Credit Union Land. Back then, not only were "bankers" evil incarnate, even vendors who sold products and services to banks were seen as the devil's spawn, and letting them sell to one's credit union was to be in league with the Dark Lord himself. Any vendor, supplier or consultant who had contacts with bankers had a stained heart-at best. As for the misbegotten who had actually worked at a bank, they were beyond redemption. To let them marry into the family as a senior manager was a sure way to pollute the pure seed of Credit Union Land progeny, leading to a complete collapse of the movement.
I can recall many credit gatherings where those who had worked in banks felt it necessary to introduce themselves as "recovering" bankers. Thirty years ago such attitudes towards banking professionals were not isolated to just a few credit union true believers, it was ubiquitous. Back then, I thought it was part of the amusing quirkiness of credit union folk. Today, it's just idiocy.
The fact that such language even exists today is a continuing indictment of a least one of the major credit union trade association's desperate attempts to remain relevant. In order to keep phones ringing and money flowing in for salaries and bonuses, trade associations desperately need galvanizing issues. Nothing galvanizes a constituency more than fear, and to engender fear nothing works better than a common enemy.
Stoking The Fires
This is true for all trade associations, be they milk producers, oil, manufacturing, mining, banks or credit unions. For credit union trade associations no issue has matched the glory days of the HR 1151 fight. The demonization of banking professionals during that time remains embedded in the credit union psyche. Our trades keep that ember glowing to stoke the fires during quiet times.
Ironically, during the post-HR1151 years, in their desperate search for galvanizing issues, the trades threw members under the bus by cozying up to mega-banks to support bankruptcy and credit card "reform" and by opposing cram-down legislation. Now that trades have won these noble battles to protect credit unions from our own members, they return to the gifts that never stop giving: taxation, bankers and regulators.
However, the trades must tiptoe very cautiously on the regulator issue. Those of us who have deep experience in other regulated industries-in my case both aviation and health care-know that the NCUA is probably the most reasonable, common-sense regulatory body in Washington. The trades won't criticize NCUA directly, but they have no problem providing speakers and venues to whip credit union mobs into frenzied anti-NCUA rhetoric. Plus, the trade leaders have to meet the regulators face-to-face, and that's kind of hard to do after publically questioning someone's motives and integrity.
The One Thing You Can't Fix
That leaves only taxation and bankers as targets of opportunity and the trade diatribes link both in a symbiotic relationship, because it's the despicable bankers who want to destroy credit unions by taxing them. The trade propaganda goes like this: taxes are bad; bankers want to tax credit unions; therefore, bankers are bad people. The corollary is that we don't want bad people working in credit unions. That is why even today, in 2013, we still hear a credit union CEO publically state that his board would never permit the hiring of an ex-banker. Fortunately those credit unions are on the Darwinian Express to extinction.
When hiring top talent, I always kept in mind the insights of St. Teresa of Avila, who lived in the 1500s. When asked how to choose a spiritual advisor Theresa said, "Always choose a wise person over a holy person. I can always make a sinful, smart person holy; but I can't make a holy, dumb person smart." When it comes to hiring, hire the very best-regardless of what industry they're in. To quote today's great philosopher, Ron White: "You can't fix stupid."
Edward Speed recently retired as CEO of a $2-billion credit union. He can be reached at
