[00:00] Vince Passione: Welcome back. I’m your host, Vince Passione, and you’re listening to part 2 of our conversation with Samantha Bealer, president of League of Credit Unions and Affiliates. If you missed part one, be sure to check it out. Today, we’re diving deeper into some big topics, starting with taxation. Let’s jump in. So you touched on it, let’s go back to taxation. So I think it was the Joint Committee on Taxation estimates it would cost anywhere between two and a half and $3 1000000000. That’s roughly $600,000 per credit union if we do the math. So, you know, I’ve talked to some credit union CEOs and they said, “I’d swap that for access to the capital markets, right, uh, any day.” And others are just really concerned about how it would affect their balance sheets. Some of them have run this war game scenario out, and some haven’t. So how do the credit unions reframe the tax exemption conversation to focus on community impact and member value, and away from, “Oh, it’s two and a half and 3, to $3 1000000000, so it’s just a rounding error. Why are we paying attention to this on the budget line?”

[01:10] Samantha Beeler: Fantastic question. So much to unpack there. I think the very first part of it is, what I would say, tell a credit union is, do you know that the Tax Cuts and Jobs Act in 2017 that’s, you know, running out of time, which is why we find ourselves in this conversation sooner than the natural appropriation cycle, has a estimated 30 billion to 40 billion tax cut for banks. That’s our 10-year yield for one year of tax cuts for the banks. That should have been our only talking point. We don’t need you know, credit unions for decades we’ve been telling them, “You gotta know your data to win this advocacy fight.” And then we got data, we got smart, we got these impact report, and then we’re like, you gotta tell your story. ‘Cause data without a story, it’s not alive, it’s not breathing, it do-It’s not compelling. We have all of it. We’ve got the data, we’ve got the story, we’ve got the impact in the community, like you said. But the thing that we’ve always missed on is just being very aggressive with what others have and why the myth of the even playing field was always just that, a myth. And we should have fought back on that instead of saying, “Oh, well, we tend to our own knitting.” Well, when you tend to your own knitting, you don’t realize that the people over there, they’re not even knitting anymore. Right. And we’re just sitting over here. And I just I say that, but my daughter’s learning how to knit right now. I think it’s a very useful skill. So no hate to the knitting community. Now, the thing about our tax threat that I will tell you that I’ve been really proud of watching happen is, it’s not easy to mobilize this system, but when we’re defensive, we’re at our best posture. We’re a little bit like, you know, a very large military for a well-established country because we’re not great at offensive fronts. I think all the developed nations have shown that over the last 50 years. But we’re really good at defense. And so what I saw ACU do in partnership with all the leagues was, get really honest really quickly about where our threats are. And until you can do that, you can’t actually win. And so even though our 68 delegation members, I would tell you, we have two and a half weak links, people who are more credit union or more bank friendly than credit union friendly. That’s a pretty good ratio. Neither one of those people are in leadership. None of them are in committee leadership.

[03:30] Samantha Beeler: So it’s my league’s job then to say, “Well, what do we have?”. Well, we have really good capital resources in our advocacy fund. Let’s give those to ACU, so that they can use them in the regions where there are leadership folks who are having these scary tax ideas. That has gone well. The importance of that cannot be underestimated because all it takes is one well-placed person in a committee room late at night. When this first came up, I thought we were, um, putting ourselves on the menu. I think that, you know, as the conversation evolves, it looks like it’s worth defending always who we are and why we’re here. We have a structure that gives us our tax status, nothing else. And, uh, we haven’t always been as vocal with that. And then the last thing I’ll say on taxation is that I know it’s vital, and credit unions have shared that and I echo that. And as their lobbyists, we promote that. But to your point, there are definitely credit unions who have said, “Let me run the numbers. Wait a minute, let me “You know, in fact, just for you, Vince, I, I haven’t really mentioned it to a lot of other people, but there is a cooperative structure in the tax code. It’s under Title T in the tax code, just like there are 501s and s. There is a Title T, it’s for cooperatives. What if we utilize that? What if we built , and now this is not me saying this is what we’re gonna do, so I have to be very clear. But what if we took the next We win this fight because we will and we have to. Right. And then we take a few years and we say, “Well, what could we unlock if we took off this handcuff of saying, ‘This is what makes us special’?”Because it was never our tax status that made us special. It was our structure that gave us our tax status. If taxation is what is separating a credit union from success, I would argue maybe it’s not truly the gift you think it is, maybe it’s a weight, maybe there are other things that we can go and get and be unapologetic about. Now, that is a personal opinion and I will fight tooth and nail with any member of Congress whoever says our tax status should be on the line, ’cause it shouldn’t. We’ve earned every penny. But if credit unions come to me and tell me, “We need to evolve our advocacy on this. “We’ll do the research, we’ll do the relationships, uh, I don’t think we’re even close to that now. I think we’ve got at least half a decade left of fighting and defending our current so that we can see who we need to be in the next decade. So don’t clip any of those small parts there. Otherwise, it’ll sound like, “Breaking news. Samantha Bealer, light on the tax status. “And I’m not. I think, you know, credit unions are We should probably get a even better tax break if you’re comparing us to what the banks are getting in the TCJA.

[06:09] Vince Passione: So you think probability is low, you’d handicap it at what? The tax status goes away?

[06:15] Samantha Beeler: Can I couch it?

[06:16] Vince Passione: Yeah.Sure.

[06:17] Samantha Beeler: And say House, Senate presidency? Um, I think in the House, the probability does not It, itI t’s in our favor, but it doesn’t The trend doesn’t look good. Mm-hmm. So I would say that’s where we need our energy. In the Senate, I’d tell you we’ve got more friends and a better safety net. But if the president leans on the Senate to make them can Uh, to make them move towards where the House budget is, we’re in trouble. If the president leans on the House to make them conform with the Senate spending, better scenario. And then there’s the wild card of the White House and, uh, if they feel like we are doing the right work with our tax status, we’re gonna be in a, in good shape. And I think we are doing the right work with it. Uh, you just heard over the weekend too, 501’s and 501’s are also now coming out with their own, “Don’t tax my association, don’t tax my foundation,” efforts, um, after some of those remarks as well. So we’ll see where that and the universities, where they kind of land- Right. should give us a good indication of where this debate is gonna end.

[07:18] Vince Passione: That makes sense. So we, in the opening, we talked about the league launched a dedicated office of small credit unions this year. And you, you said this about, you said, “Not just preserving them, but positioning them to thrive.”So what does that success look like? What does thriving look like?

[07:35] Samantha Beeler: Growth is chief. I think thriving is credit u- small credit unions really feeling that they are You know, every Feeling like they are this special, un- unwell kept No, I shouldn’t say it like that. Thinking that they are this, uh, you know, secret to our movement. So many people say that the small credit unions are, you know, they’re the backbone of the industry, they’re, you know, they’re our shield for taxation. That, all of that is noise. Small credit unions are serving their members and their communities in a way that others aren’t. That’s what makes them special. So let’s let them do that better, whether that’s with technology, the things that Susan on our team, uh, she heads up that office and in partnership with Toby. Right now, they’re working We asked the small credit unions, you know, “What do you, what do you really need from this?” They’re like, “On-demand training. We need a list of vetted partners who we don’t ha-We don’t have the time to go out and look through 5 different contracts. Can you give us just a trusted list?” The other of that, the other piece of that is a legal retainer. A lot of them don’t keep a lawyer on retainer. Cost prohibitive, but it’s necessary in this day and age. So can we do a legal retainer at the league for them? And then just conversations. A lot of small credit unions face similar challenges, they need an updated policy or, you know, hypothetically, they have a similar member issue. And so we are giving them a platform to connect with each other. And that’s what we just heard at the small credit union conference last week, uh, nationally, is they need more time k- truly hearing from one another because nobody quite understands their issues like they do. And Susan’s the former CEO of a very small credit union in Florida, in Central Florida, and so she, she’s been in their shoes. She’s had to navigate their boardroom, um, well, similar boardroom, uh, dynamics. And so that’s We wanted someone who actually understood and wasn’t, you know, guessing, but really has walked in their shoes.

[09:30] Vince Passione: Now, you touched on fintechs, and sometimes when I’m at these conferences, it feels like fintech seems to be the, the solution for everything and, oh, if, you know, we get these fintechs, if we invest in these fintechs, life is gonna be great, credit unions are gonna get, you know, move forward. And you look at these smaller credit unions and even some of the mid-sized credit unions, and there are over 10,000 fintechs, there’s roughly 4,700 credit unions. I don’t understand how even a 500 th- a $500 million assetted credit union can navigate those fintechs, implement them, integrate them. Don’t you think that s- an integrated solution is the better offering for some of them? Because itY- yeah, trying to pick the best to breed, that’s great. I just don’t know that, that there’s the skill set and the resource to actually do that.

[10:25] Samantha Beeler: Yeah.No, no, ITo, eh, you know, I, I hear your statement and, and agree that there is a really tough environment and, uh, it doesn’t have anything to do with size. I think at that same conference you were, uh, so graciously a partner at, there was a very, very large credit union and, uh, he was very candid that they’re They tried. They tried this AI solution, they tried this big consultancy that plugged them in with this fintech, and ultimately to no avail and they cut the project because there is this my- this scale of my- of myth. There is this myth that in scale, you will solve all problems and I don’t know one credit union who’s gotten to the magical scale number, whether it’s 500 million, then it was a billion, then it was five billion, 10 billion. At some point, you’re just bigger, your problems are bigger and, uh, I do think the fintech plug-in, I’ve yet to I’ve Now, look, there’s a lot of great partners out there. I’ve yet to see someone come back and tell me, you know, this was a lightning bolt, it was so easy. Most of the ones that are being successful are things that are well-integrated into the system, were not that risky, there, there was not this, like, myth or Not myth. There was not this, uh, idea that they might fail, right? ‘Cause that’s the risk you take. That’s why it’s important when you start working with a fintech, but then we keep asking ourselves why they get sold. because we’re not That’s their point of existing, which doesn’t match our point of existence and so integrated technology will be a better solution in the long run which is why I advocate for it.

[12:06] Vince Passione: Excellent. So lots more change even in America’s Credit Union. You mentioned Jim Nussel, right? He announced his upcoming retirement. Big, big pivotal moment in the industry. So what’s his legacy?

[12:22] Samantha Beeler: I think- Hm.that Jim did something that I always respect a leader who can do this and Jim did it. He did something that everybody talked about and he did it.Mm-hmm.unified two national trade organizations who historically had been, um, not the closest of friends, well aligned in our We had common friends. Mm-hmm. Uh, but they had not often coordinated together, maybe with the exception of some really intense pivotal moments, um, I think during the pandemic. There were some best practices of the two organizations and that is tough to do and I, I respect Jim a lot. In fact, one of the stories that I tell about taking this job is, uh, when I was first thinking about it, pontificating on the idea, I found myself at a winter actual. That’s in winter all the associations get together and we were just on some lawn chairs and staring at, you know, a fireplace and he’s kind of a He’s a very good one-on-one conversationalist and he was just kind of pushing, you know, that gentle prodding that, uh, only a, you know, someone who is a good mentor can do and, um, I see that in how he approached the industry. It was a more humble, uh, a more, you know, prod people forward. He, he led that way. He’s alwa- He stands behind his leaders and lets them stand in front. I think he brought a lot of good character, um, to the way we approach our advocacy. I also think he brought He, he, has been in these fights. Like, the It was always nice that he had sat in those rooms and, uh, he understands what a cabinet conversation looks like. That is, you know, that was a really good season for us to understand well as we transition through, what, three presidencies, two presidents during his time. No, three presidents, I guess. Someone can fact-check me on that. But was, uh, was really maturing us in our advocacy and I will always respect that and appreciate that.

[14:18] Vince Passione: So right in the job description for his replacement, what are the qualities that you think the next C- CEO needs to carry us through the, sort of the, the next sort of, you know, decade of what’s gonna happen?

[14:30] Samantha Beeler: Yeah. Should always be different than the current, right? That’s the- Mm-hmm. that’s the key and I think that I’ve been really impressed with the way the AC Board’s, uh, walking through this process because they’ve put out, uh, a bit of a questionnaire, uh, on, on what’s needed and so I’ll say what I said there which is, it should now be a moment where we say we matured as, uh, an industry and as advocates. Now let’s mature as an association. And if we’re not looking to recruit from the best and brightest of association executives in this country, then I will be very frustrated because there are associations that are doing it very well and we should be importing that because now what we’re doing is merging these two things together still, right? NAFCU and CUNA and defining who we are as an industry, not who our mascot or our fearless leader is but who we are as the collective and I think that they’ll be looking for someone who is ready to take on an unknown future. Maybe hopefully somebody who has, uh, had a lot of advocacy success, uh, by utilizing the resources at their disposal, maybe not independently. Uh, you know, an, an advocate or a lobbyist or even a former member and then hopefully, and this, eh, this is a hard This is a tall order but every executive leader needs to be more emotionally intelligent than we were even five years ago, 10 years ago, and they need to find someone who-understands that this is a relationship management job. This is not a brand ambassador job. This isn’t kiss the babies and wave. This is someone who will get into that organi- organization and galvanize the team to be that. Because you can only represent an entire nation of credit unions when that entire nation feels knitted together. And I do think it’s one of those moments where we could do a better job at that.

[16:26] Vince Passione: Excellent. Excellent. All right, last part. We’re gonna talk about VISION. This is the fun part. So your VISION Conference is around the corner. I think it’s August 18th, have I got it right?

[16:35] Yes. Well- Um,

[16:36] Vince Passione: all have bold ideas, right? Give us a preview. So what do you want people walking away with from the, from the VISION Conference?

[16:43] Samantha Beeler: Yeah. So VISION is all about the future for us. So we do Engage, that’s our big annual gathering in June. Mm-hmm. That’s the get-together. We call it the family reunion. It’s where you engage with the movement. VISION is where you look forward. And we always tell What I love about that conference is we tell the keynoters that they can’t talk about anything that’s happening right now. It all has to be five and 10 years out. And so when you walk away from VISION, you’re hopefully equal parts scared and excited. A little scared because you had no idea of this one emerging technology. Like, I’ll never forget, um, sitting at, uh, the VISION Conference and hearing how close we were to quantum computing. And-I was like, “I- am I living in a sci-fi movie? “Uh, but also, so inspired by some of these people who are like, “Don’t worry, I was there when they started crypto. I’ve navigated it all. Let me tell you what’s ahead for d- uh, decentralized finance or tokenization and how credit unions can play a role in that. “And so really seeing ourselves as in the mix. VISION is one of those times too, where, you know, it’s in a good location, great time of the year. And the credit unions who’ve been coming for a long time, they bring their board. And I love that they bring their board to a place that’s all about the future, cause that’s who’s going to take us there, our boards. So highly encourage you and anyone to come check it out, and especially credit union directors.

[18:03] Excellent. So last question. What is your vision for the future of the credit, credit union movement, and what, what’s needed to get us there?

[18:12] Samantha Beeler: My vision is that we are considered the solution for financial services, writ large. We, right now, are consumer-focused with a, a slight emphasis on business. I think that we can be the solution moving forward. I want consumers to know that, uh, they own us, and since they do, we can help solve their problems because it’s ultimately theirs. And the more we lean into that, the better off we’re gonna be. And my vision for that, uh, um, how we accomplish that is a lot more collaboration. I think the industry matured in our collaboration in the ’70s, ’80s, and early ’90s.Then we turned more into the co-opetition, which is fine, and yet, is not what’s needed to get us to this next phase. And I think the other piece of that is letting go, uh, of perceived, not real, but perceived limitations on what we can offer people. Because we can offer a lot to a lot of people, and there’s so many more people who could be members of credit unions. And so the idea that we have to compete with each other to accomplish that is, uh, it’s a myth. And there’s more members who need to get to know us tomorrow. So we’ve got to get our voice out there, be heard, and be very relevant to the problems that individual people are facing every single day.

[19:40] Well put, and we’ll leave it there. So that’s a wrap for this episode of 22 Minutes and Lending. Samantha, thank you for your leadership, your insight, and the time today. It was fantastic. To our listeners, be sure to subscribe wherever you get your podcasts so you never miss an episode, and we’ll see you next time for another 22 Minutes and Lending. Samantha, thank you so much.

[19:58] Thank you, Vince. I appreciate it.

Narrator: Thank you for listening to the 22 Minutes and Lending podcast. We hope you enjoyed today’s episode. You’ll find links to any resources mentioned in the show notes. If you’re enjoying our show, be sure to subscribe and leave us a five-star review.