Collaboration consolidation Cornerstone/Heartland Merger
By Caroline Willard, President/CEO, Cornerstone League
Sept. 7, 2022 — Here’s a thought experiment for you. If Louise Herring were to somehow time travel to 2022, would she be proud of the legacy she built? What would she think of bankers’ attacks on credit unions, the interchange debate, or the hold financial technology has on consumers?
What would she do to ensure credit unions’ sustainability in today’s environment?
I believe the Mother of Credit Unions would draw from her famous quote, which encapsulates her resolve: “… the purpose of the credit union is to reform the financial system so that everyone can have his place in the sun.”
She would tackle the issue of ensuring credit unions’ sustainability by leveraging the gumption she displayed at 24 years old when she rode the bus to Estes Park, Colo., for the 1934 meeting that would establish the Credit Union National Association. She would tighten her focus, keeping her eye on the prize like she did when she ignored unfriendly comments and stares from her colleagues in those fateful days nearly 100 years ago.
Her resolve prevailed as she signed the original constitution for the national association that became CUNA, later co-founded the Ohio Credit Union League, and organized more than 500 credit unions.
And while in 2022 we find ourselves in a vastly different world, obstacles not unlike those Herring experienced still threaten our efforts to keep the credit union movement alive.
Which brings me back to her quote, “… the purpose of the credit union is to reform the financial system…”
Like Herring, I believe it’s time to reform the infrastructure that surrounds, supports, and advances our credit unions.
As certain forces seek to take us down, dismantle, and discredit the movement, we can mobilize our credit unions to do what we’re meant to do: provide unbridled access to affordable financial products and create financial well-being for all, but in a transformative way. As I’ve challenged my colleagues in the last year to ponder the question “Will credit unions be around in 100 years?” I can’t help but draw a direct line between survival, collaboration, and consolidation.
Courtesy of Caroline Willard, Cornerstone League; featured in CUInsight
August 9, 2022 —It was the Senate bill heard round the credit union movement. On Thursday, July 28, Sens. Roger Marshall (R-Kan.) and Dick Durbin (D-Ill.) introduced legislation that would create new mandates on credit card issuers, affecting financial institutions across America.
Known as the Credit Card Competition Act, the bill would require covered credit card issuers to add a second network to their customers’ cards, allowing them to choose only from certain options set by the Fed.
We all remember the first time Sen. Durbin began his assault on interchange back in 2010, when he slipped the Durbin Amendment into the Dodd-Frank Act, capping interchange fees on debit card transactions for financial institutions with $10 billion or more in assets. The Federal Reserve approved a cap of 21 to 24 cents a transaction, down from an average of 43 cents that had been previously charged.
While issuers under $10 billion in assets were officially exempt from the interchange component of the regulation, downstream negative impact on interchange has indeed been felt by the small issuers.
Furthermore, a second component of Durbin 1.0 was a requirement for debit issuers – regardless of asset size – to maintain at least two unaffiliated debit card networks for merchants to choose from. The Durbin Amendment was basically a flop … and now Sen. Durbin is attempting a do-over.
Financial Services Industry Reacts
The Credit Card Competition Act was met with forceful objections by the financial services industry. A coalition of nine trade associations – including CUNA – issued the following joint statement, expressing that “this deeply flawed legislation from Senators Marshall and Durbin will undermine the significant safeguards and security that exist today to protect credit card payments.”
The American Bankers Association said the bill goes farther than the rules put in place for debit card transactions under the Dodd-Frank Act’s Durbin Amendment in 2010, where a financial institution could choose any two unaffiliated networks:
“Another new provision of the bill not found in the Durbin Amendment is a requirement that banks accept virtually any kind of transaction, functionally requiring banks to onboard potentially many more than two networks. Fed research shows that the Durbin Amendment had a negative impact on community banks and no demonstrated cost savings for consumers.”
Let’s pause for a moment and dig into this statement. Durbin 2.0 requires financial institutions to accept – as ABA put it – “virtually any kind of transaction,” eschewing carefully placed safeguards protecting consumers and financial institutions from fraud.
To onboard “potentially many more than two networks” is burdensome, especially if smaller financial institutions are forced to comply. In a world where they’re already burdened with quickly changing compliance and regulation laws, forcing this untested strategy upon them is unnecessarily risky.
In a June 30 article, American Banker wrote that “merchants have seized on the highest inflation rate in 40 years to argue that so-called swipe fees on debit and credit card purchases are too high. Because the charges, which retailers pay to banks, are capped based on a percentage of the transaction size, they rise as price tags climb.”
The Electronic Payments Coalition—one of the nine trades that issued the joint statement above—has a webpage dedicated to informing the public about interchange. (More on this later in the article).
June 2022 – After serving for eight years as the executive director of Oklahoma Credit Union Association (OKCUA) and for more than two decades in Oklahoma politics, Nate Webb is retiring June 30.
OKCUA is the Oklahoma City-based government relations arm of the Cornerstone League.
According to the Cornerstone league, Webb’s expertise is the culmination of two public-facing arenas, journalism and politics, which spans more than 40 years.
The league reported Webb’s career began as a broadcast journalist covering the capitol in his home state of Maine, before he moved to Florida to become the primary reporter covering the Kennedy Space Center and later a news director in Orlando. He transitioned into politics during Oklahoma’s Right-to-Work campaign in 1994, alongside Gov. Frank Keating, and has since served as a senior advisor in a gubernatorial campaign, as well as several congressional, statewide, and legislative campaigns, the association said.
‘Wish Him Well’
“We wish Nate well in his transition to the next phase of his life,” said Cornerstone League president/CEO Caroline Willard. “Nate is a consummate professional, and we can attribute our success in Oklahoma directly to his accomplishments on behalf of credit unions and his strong relationships with elected officials.”
From 2003 to 2006, Webb served as chief of staff for Mary Fallin in her final term as Oklahoma’s lieutenant governor. In 2010, he again became Fallin’s chief of staff, this time for her two terms as a U.S. congresswoman, and he traveled regularly between Oklahoma City and Washington, D.C., according to the association.
Before becoming OKCUA’s executive director, Webb was a partner with Capitol Gains, an Oklahoma City lobbying firm that represented several Fortune 500 companies and others, including Oklahoma credit unions.
A ’Tremendous Asset’
“Nate Webb has been a tremendous asset to Cornerstone’s advocacy team,” said Jim Phelps, Cornerstone EVP and chief advocacy officer. “For over eight years, Nate has been leading our state and federal advocacy outreach in Oklahoma. His extensive network of contacts in the Oklahoma state capitol and in D.C. have enabled us to effect positive legislative changes on behalf of credit unions. We’ve been very fortunate to have someone with Nate’s political expertise on our advocacy team.”
Added Webb, “I’ve made lifelong friends throughout my career. It’s hard to encapsulate how important that is.”
The Cornerstone league said that in the political arena, Webb speaks “most highly” of Oklahoma Congressman Tom Cole.
“He was a mentor for me before he was even in Congress,” Webb said. “I met him when he was a political consultant on a couple of early campaigns I worked on. Over the years, he became not only a mentor, but also a friend.”
Added Rep. Cole, “I am happy to congratulate my good friend and executive director of the Oklahoma Credit Union Association, Nate Webb, on his retirement. His dedication to bettering our great state is certainly commendable. I wish him well and an enjoyable retirement, but I am sad to see him go.”
December 16, 2021 – The Oklahoma State Credit Union Board voted unanimously at its November meeting to reduce the assessments paid by Oklahoma state-chartered credit unions. This action is in accordance with Governor Stitt’s fiscal responsibility initiatives for state agencies. This year, the standard assessment rate was discounted 25%.
During the meeting held November 16, State Banking Commissioner Mick Thompson explained how the Banking Department implemented several operational changes over the past 18 months that have resulted in savings to the agency. The Banking Department has recommended a discount to credit union assessments each year for the past decade. When combined with previous reductions, Oklahoma state-chartered credit unions have saved over $1.5 million. The Banking Department has used the assessment discount as an opportunity to reduce regulatory burden on state-chartered institutions.
Members of the State Credit Union Board are Johnny O’Hare, Cherokee Strip Credit Union; Luann Schmiedel, Oklahoma’s Credit Union; Cindy White, Oklahoma Educators Credit Union; Steve Rasumussen, Lay Member; and Commissioner Thompson.
May 7, 2021 – Thanks in part to efforts by Cornerstone League’s Oklahoma advocacy division, Oklahoma Credit Union Association, Oklahoma credit unions enjoyed a big win last week after Gov. Kevin Stitt signed Prized-Linked Savings into law. Starting on Nov. 1, credit unions will be able to conduct savings promotions to incentivize savings. Prize-linked savings programs motivate people to save money by offering them prizes that are linked to their savings accounts.
The American Savings Promotion Act—signed into law in 2014—removed federal regulations that kept financial institutions from offering prize-linked savings accounts, in which people are entered into a lottery for cash prizes based on how much money they place in a savings account, certificate of deposit, or savings bond. The removal of these regulations enabled credit unions and other community-focused financial institutions to offer innovative products that could help promote financial literacy.
March 5, 2021 – Cornerstone Foundation recently launched an initiative to attract Financial Capability Service Providers (FCSPs) to the Cornerstone tri-state region: Arkansas, Oklahoma, and Texas. Modeling after Cornerstone Resources’ vetting system, the Preferred Financial Capability Service Provider initiative will help streamline the selection process and enable credit unions to give back to Cornerstone Foundation through the partnership’s referral agreement.
Organizations that enter into such agreements with Cornerstone Foundation will be considered and promoted as a Cornerstone Foundation Preferred Financial Capability Service Provider.
Knowledge of Financial Education (KOFE), a product of Consolidated Credit, is Cornerstone Foundation’s first Preferred Financial Capability Service Provider. KOFE is an online financial wellness benefits platform designed to connect users with the tools they need to be financially successful. It uses a three-pronged approach to financial education: Self-Paced Financial Education, Classroom Learning, and One-on-One Coaching.
FAA credit union celebrates 50K
April 20, 2015 – Oklahoma City, Okla. –FAA Credit Union is inviting residents of south Oklahoma City and nearby communities to a celebration of the credit union reaching 50,000 members. The event, from 4 to 7 p.m. May 15 at the 10201 S Western branch, will include free food, sweet treats, a petting zoo, family-friendly games and a chance to win one of three $500 prizes.
Childs and Boesch Continue Service on NASCUS Credit Union Advisory Council
September 10, 2014 – Nashville, Tenn. – The NASCUS Credit Union Advisory Council held its 2014 Annual Meeting on Sept. 10 in Nashville, where two state credit union CEOs began new terms on NASCUS’ Credit Union Advisory Council. The credit union membership is governed by the Advisory Council, a group of 12 directors who are credit union executives from around the country.
FAA Credit Union Launches Employee Volunteer Program
July 7, 2014 – Edmond, Okla. – FAA Credit Union (FAA CU) prides itself on three words: Serve. Empower. Enrich. To truly demonstrate the organization’s dedication to the first word, Serve, FAA CU has implemented an employee volunteer program. FAA CU employees are passionate about serving our community and this latest program is helping them reach beyond the doors of the Credit Union.
What’s new in your state?
Click here to submit your state-chartered credit union news stories to NASCUS today!