Providing Clarity in Chaotic Times

[00:00] Vince Passione: I’m your host, Vince Passione, and today I’m joined by Samantha Beeler, the president of the League of Credit Unions and Affiliates. Representing nearly 400 credit unions across Alabama, Florida, Georgia, and Virginia, the leagues become a bold and unified voice for credit unions in the Southeast. Under Samantha’s leadership, the league has launched major initiatives like its small credit union program, introduced a sweeping rebrand, and welcomed Virginia into its family, all while tackling unprecedented regulatory and economic headwinds. In this episode, we’re going to unpack how Samantha sees the future of credit unions, where innovation fits in, and how recent upheavals in the regulatory landscape, including the shakeup at the NCAA, are likely to shape the road ahead.  Samantha, welcome to the show.

 

[00:42] Samantha Beeler 00:42: Thanks for having me.

 

[00:43] Vince Passione: It’s awesome. Great to have you. So let’s start off.  The name, it’s bold. It’s a new name. It’s the league. And in the recently broadcast that I watched prepping for this interview, you said, we didn’t want to go with something safe. So tell us about the decision and what was the vision behind the brand.

 

[00:58] Samantha Beeler: Well, I think I should start by saying I was going to be a superhero when I was a kid. So the logo was an easy choice.  Now I think like many people, we wanted to meet our members where they’re at. And when we talk to our members about us, they call us the league, their league. And we didn’t need to change that. There’s trust in that reference. There’s trust in that relationship. And then our job is to go out and I do try to galvanize the team around this is to go be bold and be their shield and go navigate this chaotic, crazy environment that we’re always in on their behalf. And so we all ultimately, yes, it was a bold statement. And all it took was deleting one word.

 

[01:39] Vince Passione: Makes sense. So in the middle of all that, you integrated Virginia before the rebrand. So what prompted that merger, and what is it unlocked for your members?

 

[01:49] Samantha Beeler: So first I’m gonna go with what it unlocks. It is the opportunity for credit unions to continue to lean into our superpower, our strength, which is collaboration and cooperation. You know, it’s one of the tenets of being a cooperative. The more we work together, the better off we always are. I’ve yet to find a time where credit unions have come together and not benefited from that shared vision and mission and work that we do that sets us apart from other industries.  And so the things that we were able to do from a really operational sense is one, we were able to hire more people. We have a different structure than the Virginia league. So we have a robust for-profit and shared services, which allowed us to free up some resources for advocacy staff and consulting staff to represent Virginia and stay close to those credit unions. It helped us start the Office of Small Credit Unions, which you referenced very kindly in your introduction. And that took staffing, but then it also helped us add a COO, which would have taken us a few years in budgets to do, and a general counsel, both of whom are fantastic additions to our team and have helped in our other three states. Because you know this, these have to be mergers that benefit everybody, not just the state that’s joining. And once our board saw that, they were pretty clear. And of course, that conversation came about because there was a transition, like so many moments in the business world when there’s a pivot point of change, that board assessed, are we gonna hire again or are we gonna partner with someone? And after many, many conversations and months of searching, we decided to partner with us and we couldn’t be more appreciative.

 

[03:26] Vince Passione: You get really great economies of scale, you get specialization, but now you have to blend these four states, very different histories, very different dynamics. How’s that going and what are some of the challenges and opportunities you face?

 

[03:41] Samantha Beeler: Yeah. So, you know, what’s funny about that is I only know the multi-state world, right? I grew up in the Go West league. So I only ever knew the excitement and fun it is to get to hop over to Idaho and get to know that state to, you know, get to experience Washington and the beauty there and Oregon and really actually leverage those states against each other. So you mentioned how different they are. The thing that is overlooked so often because of how large our country is, how similar we all are. How similar the ag environment is, or the political environment, or the metropolitan environment, or the military bases that make up these states on the east coast. We have a lot in our economies that were very similar. And here’s my little chief that I always did as a lobbyist. So if you go get the fifth-grade history book for whatever state you’re entering, you’re going to find out their origin story as a state, the crops that help build that state, the industry that help form the, you know, the metropolitan areas. And so that has been my way of getting to know each state. I get the privilege of representing and I can tell you there’s a lot more that they have in common.  Georgia and Virginia are cut from very similar cloth and we’re going to leverage those advocacy relationships to influence one another as those two states like to color themselves purple. That is helpful. And when we lobby those governors or those chambers.

 

[05:09] Vince Passione: So Samantha, you now have about 10% of the credit union system in the league, so it gives you a pretty good purview and pretty good estimation of some of the challenges that you probably see at a national level. So what are some of the trends that you think we’re underestimating right now in the credit union system?

 

[05:26] Samantha Beeler: Ooh, I can say trends. I hope that there are bright minds not underestimating them.  I’m happy to see that there is work being done on many of these things. The first one that I would call out, and it’s not gonna be popular, so don’t make a clip of this, if you will, but it’s our board strength, it’s our board health. I meet so many phenomenal directors who have given their time, their talent, their resources to build this industry. And when we’re candid, when it’s just us at dinner, when we’re not in the boardroom anymore, they’ll admit to me just how overwhelmed they are with cybersecurity, AI, technology. Right. There’s just so many moving parts and pieces, and not that we have outgrown that part of our formation, but how do we get them to a place in the boardroom where they are well taken care of from information and training and resource standpoint, but they also feel empowered to help us into the next hundred years. I worry about that, I think about that. There are some great credit unions out there who are doing best practices when it comes to board health. But the other thing, obviously, technology. I once said, and it was also not that welcome, that we are cooperatives doing finance using technology when we should be cooperatives who are technology companies that provide finance. I hope we get closer to that. I haven’t met a credit union yet who leads with technology and not finance, but if they’re out there, I’d love to get to know them and study their model and share what they’ve done with the rest of the industry.

 

[07:06] Vince Passione: It was a lot to unpack. You went there, so I’m going to go back.  So best practices on board governance. I had a chance to sit through the leverage event with you. Lots of commentary, right? Best practices like should we go and pay our board members? Should we shift the model from volunteers to paid independent board members? Some of the best practices that you see and the results of those best practices from a board governance perspective?

 

[07:32] Samantha Beeler: Absolutely. Yeah, in fact, I’ll highlight, you know, more than, I believe it’s more than a dozen, it might be even crawling close to two dozen states do allow for board compensation. And you can be a well compensated volunteer, Georgia and our footprint is an example of that. Not every credit you credit utilizes that resource. And that said, I don’t know if it’s compensation, that’s the best practice. When I’m talking to board members, when I’m talking to CEOs, I hear things like tenure, fresh ideas, just good governance of term limits, as well as different thinking, where 20 years ago, it might have been great to have an accountant on the board, it still might be great. Now you might need a lawyer. But fast forward a few more years, you might have to have some of the IT background. Otherwise, you know, you’re behind the curve ball. So I just think that the skill set will always evolve. And if we don’t have a director base that allows for that, then we will be slightly handicapped.  And it’s not to say you can’t pull from the seg. In fact, I know of a credit union, who is close seg still very, very much so. In fact, they’re in the headquarters of this global corporation. But they because of that, because they’re close, they have an IT expert who’s an IT expert for a global corporation. They have someone from HR and accounting and frontline staff. And so it’s, it’s something all credit unions could do. It’s just going to take a lot of attention.

 

[09:02] Vince Passione: Let’s shift over the NCUA upheaval. Breaking story, just days ago, President Trump removed both Todd Harper, Tanya Atsuka from the NCUA board. Chairman Kyle Hauptman is still the acting board member. As I was prepping for this podcast, Dennis Dollar basically said, this effectively freezes the agency’s ability to act at a time when credit unions need clarity, not confusion.  How is the league advising its member credit unions to navigate the leadership vacuum at the NCAA?

 

[09:35] Samantha Beeler: Vince, I know we’re good friends, so I’m gonna push back on one of those things. I think Dennis later came out and said, that he feels like they can act. And I do think one of the things that credit unions, I was just saying they need to evolve and change. And one of the things they can do is project a lot of confidence into the market at this time and be the consistent voice that they’ve been. The other piece of that is obviously that, I was on two concurrent industry leadership calls today, I thought Jim Nussel did a great job just giving facts and saying, this is where the industry’s at. This is what the charter, or the charter, this is what the statute says and what it doesn’t say. And I think what’s important right now is not guessing what the administration is trying to telegraph. When we met with the White House in March, they were very clear about their support of the industry. And they were very clear that they felt like they, as an administration in their past, right, their first term in office had been very supportive and want to continue in that vein and see us as consumers, cooperatives being different than for-profit banking. The other piece of that is when we ping them midweek, last week to say, hey, what’s the behind the scenes here? They have names, they are looking to fill those positions. And I don’t think this will be the end of the agency. I’ve said to credit unions to not just rest on that, to not think that maybe one day we could be a consolidated regulator because in more than 40 states, there are consolidated regulators between credit unions and banks. And so to not think that the future state will always be thus, but as their advocate, it’s mine to defend our, ours, not mine, but ours to defend our share insurance fund and our independent regulator that we worked hard for. I mean, we started out under an ag regulator and had to fight for 30 years to get our own regulator, actually a little longer than that. And so I understand the fear that comes thinking that’s being questioned. I don’t think we’re in the space though that is doing away with the industry at all. And I think that the next iteration of our regulator will be very business friendly.

 

[11:54] Vince Passione: So let’s talk a little bit about sort of having a single regulator. You know, when I was at Citigroup, I think the number was there are a dozen different regulatory agencies that come in to supervise Citigroup and they’re very uncoordinated.  And there was a Filene paper that went out, I think it was sometime around 2017 that talked about like 33% of the countries already have one regulator, the UK and South Korea being the two examples that they cite. So is there a case and what’s your position on it that it makes sense to potentially simplify the regulatory framework and maybe even get to one regulator that sits over all these financial institutions?

 

[12:36] Samantha Beeler: Yeah, I hope Mark is a sponsor. Filene’s done some great work to research these topics as they emerge into the industry, right? And once we’ve asked ourselves these questions, now, of course, it’s for the industry to decide. That’s what makes our advocacy so special is it is done by committee of credit union. We just simply lay out the facts and the environment. I think that, so I’m gonna, so if I can then, let me take my advocate for credit and hat over here and just put on my kind of beltway, this is their thinking hat. If I were sitting in the administration, I would be looking at all the duplicative regulations. You mentioned the more than dozen entities coming in the city group. I think credit union, especially large credit unions feel that dual charter credit unions feel that if you’re a state charter, but federally insured and they don’t seem to always coordinate worst case, they don’t seem to agree. And then kind of who wins and credit unions are forced to arbitrate that between their provincial regulators, that feels inappropriate. And so the day and age though, where we would just have one regulator, I do think is not one as far as financial institutions, one is far as credit unions is gone because here’s what would happen in that consolidated environment. Yes, you’d have a division of credit unions under some hypothetical umbrella, but then you would probably have an office of cybersecurity. They’d come in and do their own audit. Then you’d have an office of consumer. They’d come in and do, because what you’d want to do, true efficiency is about having those experts and housing them across multiple industries. And so I do think you’d then still be looking at multiple exam-like interactions, even with one regulator, because that regulator is so much bigger. So it’s bureaucracy in a different form. It’s taking the bureaucracy we have layered across agencies, putting it all under one umbrella and making it different offices. I think best case scenario though, is that we differentiate ourselves on structure, but not regulation. I don’t think credit union should react negatively to the idea that we could gain things from having a sophisticated regulator who works across different financial institutions. There is so much we do have in common with the banks. Can you think of cybersecurity threats?

 

[14:58] Vince Passione: That’s right.

 

[14:59] Samantha Beeler: Perfect example of something, we would want a consolidated response on that. So let’s craft it though.  Let’s not get it because someone else forced it on us and said, this is what’s good for you. Let’s get it because as an industry, we’ve done our research or we’ve decided that it’s something that we need and thus go advocate for it. And that’s the thing that gets me, if we could just advocate proactively and be ahead of the eight ball in these things, we wouldn’t be so scared of the change that we’re facing in the advocacy arena.

 

[15:31] Vince Passione: Let’s step back and talk about precedent because you’ve had a chance, obviously, and I’m sure to leverage your network in doing research. You see this precedent, the Humphreys Executor versus the United States, which is back in 1935. It said members of independent regulatory agencies like the FTC and by extension the NCUA couldn’t be removed without cause. That shaped this administrative state that we live in now, an agency independence.  Do you think that that precedent can be utilized to fight back on this? Do you think this is turned and it’s not turning back?

 

[16:10] Samantha Beeler: Thanks for the hard-hitting questions. You’re a good researcher, too. You’ve got a good team because I think that you and a bunch of other regulatory lawyers were googling this weekend and then reading and making yourself smarter. And I’ll say this, I’m not a lawyer and I don’t pretend to be one.  And when I do, my general counsel reminds me that I’m not for good reason. So I think the best answer I have is that there is absolute gray area in the law right now because if you look at the credit union statute, for example, you know, it’s a silent statute, for all intents and purposes. Whereas you have other, like the CFPB or other, the FBI or FDIC, how they’re seated is different, but ultimately the same. Ultimately, the power lies with the executive, the Senate confirms them, and then there is this sentiment to serve at the will. Now, for cause looks different in every credit union, right? What you would separate an employee for maybe in your company is different from the credit union next door. So that’s how I’ve been likening it to our industry is, you know, we are applying what kind of what would have been generally accepted reasons for termination under maybe other regimes to this one. And I think that that’s just, we knew that wasn’t going to be the case, that this administration was going to be the reformation on the agency state, the bureaucrats, the, you know, the alphabet soup that makes up DC. Now, are some of those soups really important and healthy and great for us? Absolutely. Are other ones industry, you know, are they regulators, our industry’s been complaining about for quite some time? Yes. And so it’s, I don’t like when we get as an industry caught up in reacting to a partisan action, thinking that that’s a policy reformation. The CFPB is something that credit unions have been talking to me about since my, since I started right after God Frank in our industry. And so to wake up one day and hear credit unions saying, well, we need to defend the CFPB. I couldn’t, I was shocked. I didn’t know what parallel universe I was in. And I knew it was being, you know, as a partisan statement, what I think they were trying to say, which I love about credit unions is we need to do that. There are too many bad actors still out there hurting consumers and that we can always get behind. And there is, there is a space for that protecting consumers and there isn’t supposed to be a bureau for that, but they came after us and said, in fact, I think 94% of their actions were on regulated depository institutions. That’s not the bad actors.

 

[18:49] Vince Passione: Got it. So so I was listening to your see your broadcast interview at the GAC and you had this quote you said the need for stability and predictability from our regulators and and there’s that need how do you advise your members today given all the look it’s everywhere right we’re seeing it everywhere lots of you know change rapid change uh things things going back to the way they were and then flipping again what’s your advice to to our listeners and to your members these days?

 

[19:19] Samantha Beeler: I’ll give you risky advice because it’s late in the day after a very long weekend of reading the regulatory tea leaves. I mean, my first advice is remind yourself to who the president is, because he is the president right now, leader of the free world. So, you know, do the research. I have recently watched some really good documentaries that remind me that he is a ultimately a businessman and negotiator. And that’s not to justify any, I’m just saying that as I do any research to find out who people are. And he’s always negotiated that way. Like even when he did the whole like save the ice skating rink in Central Park, right? He says big things, he goes all in, and then he lets everyone react. And then he gets to this middle ground. And that’s the state of play.  And we have to recognize that. And once you recognize that as the state of play, it actually does become kind of consistent. It actually does become less shocking, less jarring.

And so know the environment we’re in. And then the second piece of that is kind of the most, the easiest conversations I’ve had over the last few days are, did you open a branch? Did anything change about the insured nature of your deposits? Do you know any regulation, regulatory changes that are happening, impacting your operating environment? Okay. Know to all of those, hopefully unlikely. And then in that case, continue on, keep moving forward on these cool things you’re doing, serving the community. Don’t stop being credit unions, because that’s our secret stuff. So don’t jeopardize any of that by pulling any of that back. Be you, be unapologetic about it. And that will be the best advocacy we have against taxation, against any kind of regulatory environment changes we don’t like. If we’re unapologetically us and doing business as usual and carrying on in times of crisis, that will set us apart.

 

[21:11] Vince Passione: We’ll leave it there. That’s a wrap for this episode of 22 Minutes in Lending. Samantha, thank you for your leadership, your insight, and the time. It was fantastic.  To our listeners, be sure to subscribe wherever you get your podcasts, so you never miss an episode. We’ll see you next time for another 22 Minutes in Lending. Samantha, thank you so much.

 

[21:28] Samantha Beeler: Thank you, Vince. I appreciate it.