Six years ago, two players for the Central Washington University women's softball team carried an injured player of their opponent around the bases so that Western Oregon University's Sara Tucholsky could count her first collegiate home run. Under NCAA rules none of Sara's team members were allowed to assist her and her "home run" would only be counted as a single — if two Central Washington players hadn't come to her rescue. The homerun eliminated Central Washington from the playoff hunt.
Just this year a Minnesota high school wrestler hugged the father of the opponent he lost to in the state championship finals. His opponent's father is terminally ill with cancer. And in Ohio's high school state hockey championship game, which extended to seven overtimes, the game ended in a tie and co-championships were awarded to avert injuries to players.
From the Field to the Boardroom
But as we reflect on the mortgage and banking crisis, Peter Eavis, who writes for the New York Times, wrote a story entitled "Questions Are Asked of Rot in Banking Culture." He writes, "Money laundering, market rigging, tax dodging, selling faulty financial products, trampling homeowner rights and rampant risk-taking — these are some of the sins that big banks have committed in recent years."
Eavis then goes on to assert some regulators' observation that the "misdeeds are not just the work of a few bad actors, but rather a flaw that runs through the fabric of the banking industry. And after years of saying little about the behaviors of bankers, even as one scandal followed another, regulators are starting to ask: Is there something rotten in the bank culture?"
In an interview with William Dudley, president of the Federal Reserve of New York, he states, "There is evidence of deep-seated culture and ethical failures at many large financial institutions." In asking if "too big to fail" was at the heart of their trouble, Dudley rebuked with the quip: "I think that they have a serious issue with the public... and I think that the trust issue is of their own doing — they have done it to themselves."
And more recently we learned that GM engineers could have corrected — with a 59 cent solution — the ignition switch of the Chevrolet Cobalt, a move that could have prevented 13 deaths. Floyd Norris, who writes for the New York Times, noted that "GM told customers there was no evidence of a flaw."
While engineers proposed fixes, they were rejected by GM executives and GM has yet to explain why. Norris asserts, "I suspect that every one of the people at GM considers himself or herself to be an honest, ethical person. Yet collectively, they acted in a way that is absolutely stunning in it callousness."
Wall Street Accountability?
He goes on to reflect on Wall Street: "That was also true of much of the conduct that brought on the financial crisis. Unethical behavior was present in large amounts. It was not clear who should be held responsible, and in the end few actual people were."
So why are the adults in charge? The adults who perpetrated the predatory lending, the banks who took their cut and dumped subprime mortgages on Wall Street, and then the "boys on the street" who packaged and sold it back to Main Street. But you know we in credit unions are to blame as much as New York. Our own breaches of ethics have cost the insurance fund nearly $9 billion over the last five years as reported by the Office of Inspector General on the NCUA's website.
So what legacy should we leave for our kids and what can we learn from them? The parents in my neighborhood growing up had lived through the Great Depression and the wars in Europe and the Pacific. Their life experiences helped them discern what was important and what was nonsense.
Kids Getting It Right
My Little League program in the Appalachian Mountains was started by two highly decorated soldiers who fought in The Battle of the Bulge. Their message was "we kept the parents out... it's for the kids." Maybe we should keep the adults out and let the kids be in charge. When you think about it, who would you rather have making a decision about how we treat mortgage customers or car owners? And why is it that kids figure this out quicker than we do?
Have you ever told your kid to look in the mirror because of his behavior? Well maybe it's time for the adults to do the same.
Ron Schmidt, CPA, is with CBS Certified Public Accountants LLC in Solon, Ohio. He can be reached at 440-542-1536 ext. 28, or
