The Profits & The Prophets, The Gophers & The Gurus

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While cleaning out the Reporter's Notebook:

* During the California league's recent Big Valley Conference (which takes place on what is technically a peninsula, by the way) in Monterey, Calif., economist Christopher Thornberg said the big problem on Wall Street is that "everyone makes their money on this year's profits." He then asked for a show of hands for those who would like to be the person who bankrupted Lehman Bros.? When no one raised their hand, he asked in a reference to its former CEO, "Who here would like to take $400 million in six years to bankrupt Lehman?" Numerous hands were raised. And as for the rest, he said, "Those without your hands up are liars. The problem on Wall Street is compensation, and until someone figures that out, it will remain a problem."

* Credit union icon Ed Callahan died recently during the same week that two large corporate credit unions were placed in conservatorship by NCUA. It was an eerie bit of timing. Not many are left in credit unions who remember Callahan's term as chairman of the NCUA in the 1980s, when Callahan led the charge to replenish an underfunded NCUSIF with the now accepted "1%" of deposits formula.

The one-time high school principal most certainly knew what it was like to face the ire of parents, so he was well-prepared when the 1% concept was less than warmly embraced by credit unions, who, had they not eventually agreed to the plan, would likely have found their insurance fund swept into the FDIC. And if you don't have a separate insurance fund, then why would you need a separate regulator? Credit unions should keep some of that perspective in mind as they consider the current corporate bailout proposals from the agency.

Speaking of Mr. Callahan, in the mid-1990s I happened to have lunch with him in a pub in, fittingly, Ireland during a World Council event. At the time Callahan had moved on to be CEO of Patelco CU in San Francisco. He was as opinionated as ever, including some pretty strong views on the role of the media.

Credit unions have always honored their pioneers by naming awards or scholarships after them so that their names and contributions aren't forgotten. Ed Callahan deserves the same-perhaps an award recognizing a credit union leader who had the courage to go against the grain. Of course, that would likely mean going against the grain of the organization presenting the award, so perhaps not.

* From the Terms We Never Thought We Would See Dept., Fred Grandy, who may never live down his role as "Gopher" on TV cheesefest "The Love Boat," will speak to an upcoming meeting hosted by NAFCU, which called him a "Renaissance man." In fact, former Congressman Grandy has a degree from Harvard, and also speaks French and Arabic. So be prepared in 20 years or so if you're at a CU conference and your keynoter is "international man of peace, Spongebob Squarepants."

* During the aforementioned Big Valley meeting, technology consultant and guru Ron Galloway observed that many people now would prefer to lose their wallet rather than their cellphone, because the information in the cellphone is more difficult to replace and many can't live without their electronic tether to the world.

Later, Galloway offered a semi-frightening vision right out of the Tom Cruise movie "Minority Report." Noting that digital signage is getting increasingly sophisticated and that more people are also carrying RFID chips in different applications, he said the signage at many businesses, including credit unions, will be able to start greeting people personally as they approach or enter the branch. Creepy.

* Also at the Big Valley meeting, I had the privilege of moderating a couple of sessions in which there was an hour or so of free-flow discussion about events in credit unions, what they were hearing at the conference, issues attendees had perhaps heard about but wanted more information on, etc. The meeting was held early in the same week in which WesCorp would be seized by NCUA, and when I suggested to many people there that there was/is anger in other parts of the country over having to bail out California CUs and their corporate, many expressed shock at the idea. Finally, one person in the audience blurted out, "Well I'm angry at Kansas," a reference to the home state of U.S. Central Credit Union, which would join U.S. Central in conservatorship.

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Frank J. Diekmann can be reached at

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