The Boardcast

Understanding Economic Complexities - Blogs That Can Help

Blogs can be a source of information and education on many topics of current interest. It is amazing the number of experts who are willing to dispense their knowledge online by blogging on a regular basis. I have found two blogs to be particularly helpful in navigating the complexities of the twists & turns as well as the ups & downs our economy has been taking daily since September. These blogs are designed to provide the most current information on a crisis which is being compared to the Depression.

I am a big fan of podcasts on iTunes. Much of the programing on National Public Radio can be downloaded through iTunes and listened to at a convenient time. Recently, NPR began a program called Planet Money which is both a blog and a podcast and is designed to unravel the mystery of the global economy. Contributors include Adam Davidson, David Kestenbaum, Alex Blumberg and Laura Conaway who travel all over the world to report on stories which highlight and explain the intricacies of the economic news affecting our lives each day. Planet Money bloggers post mulitple times each day. Posts include multi-media resources which provide information from a variety of expert resources. Comments are encouraged and give wide and eclectic views of readers throughout the world. 

Planet Money includes numerous links to additional resources drawing from the best of the web. The Baseline Scenario is a blog which is cited often on NPR reports. This blog was cofounded in September, 2008 by Simon Johnson, former chief economist for the International Monetary Fund and professor at MIT, and by James Kwak who is a student at Yale Law School. They are joined by Peter Boone, Associate at the Centre for Economic Performance, London School of Economics. According to the authors the blog is designed,

"...to present a considered view of the key issues facing the global economy that is rapidly updated as new information and events arise. To that end, we publish an extended Baseline Scenario position on a weekly basis. During the week, we use the blog to develop positions, comment on events, and highlight other perspectives that we find worthwhile."

One of the most helpful sections on The Baseline Scenario is the Financial Crisis for Beginners, a primer for people who want to understand the concepts and terms related to the stresses on our economy.  The authors of this blog cover all aspects of this crisis in a thorough, thoughtful manner.

The Internet Wins This Election

Here is some Election 2008 trivia: Which news source did people use more during Campaign 2008, newspapers or the internet? According to research published by the Pew Research Center for the People and the Press 33% of the public used the internet as their primary source of information for election coverage and 29% used newspapers. Television is still the number one source but internet use for election news has increased by 23% since 2004 while TV use has decreased by 4%. Furthermore, 49% of those under 30 used the internet for their primary election coverage. I used the Internet and social networking sites for campaign news almost exclusively during the past year. Setting up RSS feeds on Google Reader gave me almost instantaneous updates from the candidates' sites as well as my favorite news blogs. Twitter provided immediate access to online conversations. I was able to follow each of the campaigns as well as news organizations like National Public Radio. Twitter feeds were updated many times each day. On election day a variety of "Tweeters" had feeds allowing voters to report voting issues and problems. NPR and You Tube collaborated on a special project called Video Your Vote. This site encouraged voters throughout the nation to submit short videos documenting their voting experiences in the 2008 elections. As of 7pm today, 1372 videos had been uploaded to the map. I believe that this project provides an unprecedented snap shot of our democratic system. There has been no other election in history which has been documented in this way. Of course I couldn't pass up this opportunity and so I submitted a video of the polls opening in Ward Six, Plattsburgh, NY.

I believe that the social impact of the internet has influenced citizen participation in this election. Interaction among the electorate has caused this election to truly be a common experience in spite of our political differences.

Giving Youth The Credit Union Choice - Part One

Through the Boardcast I have become a fan of many credit unions throughout the US and Canada. Online contacts with Trey Reeme and Tim McAlpine have called my attention to a new program being initiated by Texas Dow Employees Credit Union. Young & Free Texas was launched earlier this month and is in the process of recruiting a spokesperson who will be able to spread the credit union message to those who are under 25. The competition has resulted in three finalists who are in the running for this position. I've enjoyed viewing the videos produced by the candidates as they ask for votes. This weekend Young and Free finalist DeAndre' Upshaw from Waco, Texas posted a video challenge entry entitled "Credit Unions Are For Old People". DeAndré interviewed 4 young adults, some students at Baylor University, and asked them what they want from a financial institution. He also quizzed them on their knowledge of credit unions. Their responses are an eye-opener for all credit union fans. These young adults make it clear that credit unions have done an abysmal job in offering young people a credible choice in their search for a financial institution that meets their needs. One of the interviewees, Kevin Satterfield, said that he associated credit unions with his parents. He said that credit unions are for "older people" not for him and his friends or other young people. The impressions these young people have make it clear to me that credit unions are going to need to work harder to change their image. It is vital that we become more inclusive in our message so that credit unions become a credible choice for young people. Since most community credit unions have a local flavor and focus, each credit union will have to discover how to retool their message to attract the youth in their particular area. I also believe that Kevin's comments point to another reality that credit unions need to acknowledge. Everyone who values their membership in UFirst should be an ambassador for credit unions. Young people are often influenced by their parents in their selection of financial institutions. This influence can open up the credit union choice for the next generation of members. The young people DeAndré spoke with also described what they value in a financial institution. This included transparency, accountability, security and open communication. These are all values that credit unions say are priorities in their service to members. Credit Unions bear the responsibility to get this message out to all potential members including young people so that they will have the choice of turning to credit unions for their financial needs. Tomorrow's post will feature a description of how UFirst is working in cooperation with area schools to give young people the knowledge and options they need to meet the fiscal challenges of the future. In the meantime, here is DeAndré's interview in full:

2008 Partnership Symposium - Innovations in the Credit Union World

Posting on the Boardcast has opened a virtual world for me. I have had access to credit union innovators and their work throughout the US and Canada. Last week I was invited to travel to Fishers, Indiana to Forum Credit Union Conference Center for the 2008 Partnership Symposium sponsorsed by Forum Solutions and Trabian. This gathering provided a spotlight on the web based technology that has become part of the credit union world.

One of the unique aspects of the forum was a moderated format. Ron Shevlin of Aite Group introduced each speaker and led a challenging question and answer period at the close of each talk. Ron is the consummate professional. He is well read and insightful and he encouraged a dialogue that provided speakers with an opportunity to go deeper into their content. Each presenter provided their own unique vision of credit union innovations. I'd like to share two of them with UFirst members.

Recognizing and encouraging the leadership potential of young credit union members was a theme that ran through many of the presentations. Tim McCalpine of Currency Marketing gave attendees an update on the Young & Free marketing initiative his company launched for Commonweatlh Credit Union in Alberta last year. The work of Larissa Walkiw has been featured on the Boardcast in the past. Larissa's year at Commonwealth is coming to an end and they have started their search for a new spokesperson. Tim has also brought Young & Free to Texas. There are 11 Gen Y candidates vying for the spokesperson position at Texas Dow Employees Credit Union. Video entries for this coveted position can be viewed here.

The Credit Union National Association Alliance Committee developed 7 cooperative principles which provide a philosophical foundation for credit unions. Principle # 7 highlights the responsibility credit unions have in showing concern for communities. This social focus was the centerpiece of a presentation by William Azaroff on the work of Vancity Credit Union in Vancouver BC. Vancity's values become clear in a quote used at the start of his talk, "We make a profit because we do good things. We don't just do good things to make a profit." William went on to describe the website, Change Everything.ca, which he and his staff at Vancity have developed. This site has become the focal point for change in the city of Vancouver. William described how Vancity has gathered a community of people together through this site who are focused on changing their local community for the good. The social action represented on Change Everything ranges from help for people in need to intelligent and prudent use of resources. As Ron Shevlin said on his blog, " Vancity's story is compelling and inspiring."

The 2008 Partnership Symposium provided me with a wonderful opportunity to meet credit union professionals whose dedication and spirit of innovation are making credit unions shine in the world of financial institutions. I'd like to thank Forum Solutions and Trabian for inviting me to attend this conference. The quality of the speakers and the opportunity to meet with these professionals made the trip to Indiana valuable indeed.

Credit Union Safety

It's reassuring to know that credit union share accounts are insured and that credit unions like UFirst FCU stress safety in our policies and practices. Yesterday the nation saw the largest bank failure in US history with the collapse and sale of Washington Mutual (WAMU). The Credit Union National Association (CUNA) and our regulatory agency the National Credit Union Association (NCUA) have both included information online which seek to be a voice of reassurance in these stressful times.

NCUA has posted the Share Insurance Tool Kit which can be accessed on their website at http://www.ncua.gov/ShareInsurance/Index.htm. The tool kit is designed to provide members with information about the National Credit Union Share Insurance Fund (NCUSIF). This fund insures share accounts using standards similar to those of the FDIC.

The Credit Union National Association President/CEO Dan Mica was featured on the Fox News Business Report this week. Mr. Mica's statement on the safety of credit unions can be accessed at http://www.cuna.org/newsnow/08/wash092508-3.html

Biz Kids Bulletin - Helping Youth Develop Financial Savy

Over a year ago I gave Boardcast readers information on a new educational platform called Biz Kids designed to supplement financial education for youth. Biz Kids was developed through a cooperative effort between Junior Achievement and the National Credit Union Foundation. Recently, I visited Biz Kids and found an attractive, full featured site chock full of resources for youth, parents and teachers. Video episodes covering a variety of topics can be accessed easily. These episodes have the potential to enhance instruction with topics like the importance of saving, principles of entrepreneurship, using credit responsibly, investing and numerous other areas related to finance.  Site registration gives access to information and worksheets that can be downloaded and used for group and individual instruction. A monthly newsletter is available to users featuring tips on starting a business and earning extra money. The Biz Kids Blog complements the newsletter and features video descriptions of successful young entrepreneurs and topics of current interest. Parents, educators and youth have many online resources for fiscal information and training. Biz Kids is one of the more attractive and worthwhile of those sites.

Fannie and Freddie Revisited

A little over a month ago I posted a short presentation on Fannie Mae and Freddie Mac. I closed the slide show by observing that the Treasury Department might be poised to assist Fannie and Freddie with their, sub prime loan- induced, capitalization problems. This post is a follow-up to my slide show. Treasury Secretary Paulson's announcement a week ago captured the attention of the entire world. The US Government's decision to place Fannie Mae and Freddie Mac under the direct authority of the newly created FHFA (Federal Housing Finance Agency) surprised most of the country. FHFA was formed in July, 2008 with the following mission 

“FHFA was established to ensure that Fannie Mae, Freddie Mac and the Federal Home Loan Banks operate in a safe and sound manner,” said FHFA Director James B Lockhart. “We are working quickly to set up the regulatory framework needed to make certain that their operations and activities foster liquid, efficient, competitive, and resilient national housing finance markets.”

The Treasury's move represents the largest and most expensive takeover by the government in US history. This is in question because it's not known exactly what this bailout will cost. Estimates put it at around $1.3 trillion or more.  Many people are asking why this step was taken at this particular moment. It appears that the announcement was timed not to disrupt the two politcal conventions. Treasury deemed the bailout proposal necessary when the assurances and announcements made this summer did not result in an improvement in Fannie and Freddie's fiscal position. In fact, after an examination completed at the request of the Treasury Department, the auditers found that Fannie Mae and Freddie Mac did not have enough capital to withstand possible losses. That was the proverbial straw that broke the camel's back. According to Secretary Paulson, the objective of this plan is to stabilize the housing market by reducing interest rates and making credit more available to the average American. Most analysts indicate that house prices will continue to fall. The question is whether or not buyers will want to purchase homes, even if interest rates are low, in an environment of deflating home prices. Secretary Paulson insists that the plan was developed in a way that places taxpayers in a lead position to be repaid when (and if) Fannie Mae and Freddie Mac recover and/or are restructured. Many questions remain and the credit union will be montoring these economic factors carefully.

The Original Credit Union "Gen Y'er"

Last April I visited America's Credit Union Museum in Manchester, NH. The museum features a series of exhibits tracing the history of the credit union movement in the United States. Museum Director Peggy Powell led us on a floor by floor tour highlighting credit union founding fathers like Alphonse Desjardins, Edward Filene and Roy Bergengren. As we reached the end of the tour Peggy pointed out a plaque dedicated to Louise McCarren Herring known as the Mother of Credit Unions. I was fascinated by the story of this woman who made the spread of the credit union movement her life.

Louise McCarren Herring was the original credit union Gen Y'er. She was born in 1909 in Clinton County, Ohio. She graduated from the University of Cincinnati with a degree in commercial engineering. Like many women of her day, Herring found it difficult to break into a field where men dominated so she took a position as director of women's personnel at the Kroger Company, a Cincinnati-based grocery chain. This job gave her a ringside view of the struggles of company employees. The early 1930's found many ordinary workers unable to get loans and forced to turn to outrageously high interest operations called "Bucket Shops". "Bucket Shops" were the original pay day loans, strapping borrowers with high interest payments which were almost impossible to pay off. Herring read about the work of department store tycoon Edward Filene. He was encouraging people of modest means to pool their resources to establish cooperative financial institutions. Herring established 13 cooperatives among the employees of Kroger's. The small size of these credit unions allowed volunteers to manage them. Herring decided to devote herself exclusively to the spread of credit unions throughout Ohio. In response to the Depression, credit unions developed throughout the United States. It became useful for these cooperatives to organize under one umbrella organization and in 1934 leaders of the credit union movement called a conference of advocates in Estes Park, CO. Roy Bergengren, one of the key organizers asked for representatives to be sent from each state. Herring, who was in her mid twenties was chosen to represent Ohio credit unions. Herring was the youngest representative and presented herself as a credit union leader, much to the chagrin of Bergengren who expected delegates to be older and more experienced in fiscal matters. Herring was known as "the college kid"and she soon proved her worth both in knowledge and organizational skills. She was elected as the secretary of the conference. When she returned to Ohio she founded the Ohio Credit Union League.  After raising her family, she returned as League manager and was instrumental in the establishment of over 500 credit unions.  Young Herring's rise to leadership provides a guiding example to all credit unions and their boards to encourage the contributions of members of all age groups especially those who belong to the Gen Y contingent.

Louise McCarren Herring's legacy to credit unions includes two children who have joined the ranks of credit union CEO's. CUNA (The Credit Union National Association) celebrates the work of Herring by awarding the Louise McCarren Herring Award for Philosophy in Action, which recognizes those credit unions which “demonstrate the exceptional effort to integrate credit union philosophy” (not for profit but for service) into the daily operations of their credit unions and recognize their commitment to superior service to their member/owners.

Teens and Money - A Video Interview

A summer job is an exciting prospect for teenagers. It gives them an opportunity to exercise their talents, learn new skills, meet new people and earn money. Teens have the same problems as their adult counterparts in today's economy. Finding and keeping employment is a challenge no matter what your age. That's why programs like the Workforce Investment Act Summer Youth Employment Program provides a valuable service in many communities. As many of you know, I am a volunteer board member at UFirst FCU. My full time job is as an employment counselor for the Workforce Investment Act in Clinton County NY. This summer my supervisor gave me the opportunity to interview two of the participants of this program.

Stephanie Howard is a 16 year old Junior at Plattsburgh High School. This is Stephanie's first job and the skills she is learning are related to those she would like to develop in the future. Tiffany Morrow is also 16 and attends Saranac Central School. Both young women have ideas about their future careers. They also have definite views on the importance of earning and saving money. Stephanie and Tiffany may be unusual in that they are both aware of the importance of saving. In fact, I think they could teach many adults a lesson in the importance of thrift and making wise spending decisions. An interesting feature of the interviews is how much both young women are influenced by their parents in their attitudes about money. Parents may not realize what a significant role they have in their children's present and future saving and spending habits. Stephanie and Tiffany have also been influenced in their choice of financial institution. Stephanie has a share account at a local credit union and Tiffany uses a bank. My friend Jeffry Pilcher of Financial Brand recently wrote a post entitled Are Your Ignoring Gen-Y? Parents? Gen-Z? He observed:

"Unequivocally, parents are the most important way to win a younger audience. For most kids, their parents (or “the ‘rents” as they call them) set-up their first bank accounts. From that moment on, inertia – that all-powerful force that keeps people stuck in financial relationships – begins to take hold."

This is an important point for any of us who are dedicated to spreading the credit union message to young people. Enjoy Stephanie and Tiffany's refreshing view of what is important to them in the world of work, saving and spending.

 

A Pecha Kucha Overview of Fannie Mae and Freddie Mac

My friends Gene Blishen, Tim McAlpine and William Azaroff are in the midst of organizing a wonderful symposium-like gathering to be held in Vancouver called BarCampBank British Columbia. BarCampBanks are gatherings of people who have a common interest and expertise in a topic related to technology and financial institutions, like credit unions. The informal organization leaves room for creativity and group initiated discussions. One side offering of BCBBC is a Pecha Kucha session. Pecha Kucha is a new form of slide presentation. It was developed by Astrid Klein and Mark Dytham in Tokyo in 2003. Pecha Kucha was devised to give particpants a chance to highlight presentation design talents in a relaxed venue. It has a precise format focused on capturing the interest of the audience with its emphasis on brevity and creativity. This format consists in a 20X20 slide format which involves the use of 20 slides viewed for 20 seconds for a total presentation time of 6 minutes and 40 seconds. It challenges the creator's design strategies as well as their ability to provide a precise and focused explanation of the subject.

I decided to try my hand at a Pecha Kucha, my first, which I am featuring on the Boardcast. This was a challenge. Please feel free to comment on my efforts. 

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Fannie Mae and Freddie Mac Do The Pecha Kucha from Ginny Brady on Vimeo.