Heroes In High Places

Good leadership requires addressing the causes of problems, putting solutions in place that eliminate repeat problems, and taking accountability for institutional failures.

SAFE Credit Union was chartered in 1940 to serve the Sacramento Air Depot. It later changed its name to Sacramento Air Force Employees Federal Credit Union (SAFE). Today, SAFE is the second-largest credit union in the Sacramento, CA, area and among the 15 largest credit unions in the state. It has $2.1 billion in assets and serves more than 173,000 members through a 21-branch footprint. Here, CEO Henry Wirz talks about his professional heroes, strong leadership, and how to overcome adversity.


SAFE Credit Union
data as of 12.31.14

  • HQ: North Highlands, CA
  • ASSETS: $2.1B
  • MEMBERS: 173,679
  • 12-MO SHARE GROWTH: 7.16%
  • 12-MO LOAN GROWTH: 15.65%
  • ROA: 0.39%

Over the years I have learned quite a bit about what makes a good leader and how to move on even in the face of adversity. Credit unions thrive under good leaders. One hero of mine is my predecessor at SAFE, Bob White. I made my career at SAFE because Bob was a good leader. He took a credit union that was in danger of failing and reformed it by putting in place strong internal controls, written procedures, and a professional staff the fundamentals for a great credit union. He was one of the first to have a senior team with professionals in finance and accounting, marketing, human resources, information technology, and legal counsel.

Bob invested in modern facilities and was one of the first to invest in an in-house computer system, which he hired professionals to run. In fact, our IT manager went on to become president of the largest data processor for credit unions. Bob was an innovator in credit union services, and under his leadership SAFE was an early adaptor of share drafts, VISA credit cards, mortgage lending, ATMs, audio response, drive-up tellers, certificates of deposit, safe deposit boxes, and ACH.

Bob taught me that creating a culture was critical. Our culture at SAFE is to do the right thing for the right reason. We are focused on excellent member service and supporting other credit unions.

My other heroes inside the movement are those leaders who have helped improve credit unions and increase our market share, like Ed Callahan. At Patelco Credit Union, Ed supported the concept of shared branching and said it was his goal to put dots on the map.

I also admire credit union CEOs like Ron Martin, Gordon Dames, Bob Brain, Perry Dawson, Rudy Hanley, Stan Hollen, Pat McPharlin, John Fiore, Buck Levins, Rick Craig, and others who built great institutions and contributed to public, regulatory, and legislative advocacy on behalf of the industry. I also admire the CEOs who built great credit union CUSOs: Bob Rose, Tony Boutelle, and Sarah Canepa Bang. I admire Dick Johnson, who as the former CEO, built up Wescorp. I watched Dick try to prevent NCUA from selling all of Cap Corp’s investments in the 1990s, forcing a loss on its members. Unfortunately Dick was similarly unable to save Wescorp and the corporate credit union system. He retired before the collapse and could only watch the carnage from afar.

The M in CAMEL, management capability, is the most important part of the rating, but NCUA gives it the least attention. Good leaders address the causes of problems and put in place solutions that eliminate repeat problems. Good leaders develop a professional staff that understands the credit union’s products and services and can help members improve their financial well-being.

Everything you achieve as a leader is the result of working with other people. You have to hire the right people, develop them, inspire them with a mission, give them an understanding of the values by which you will operate, indoctrinate them in your culture, praise them, and give them balance in life so they become all they can become. This pertains to both employees and volunteers. By the same token, you also have to please your members and other stakeholders such as regulators, vendors, and your community. In 2013, SAFE was involved in more than 600 community events. We are engaged in every aspect of the community, including working with elected officials, chambers of commerce, non-profits, schools, churches, and a host of other organizations.

This is all I want to be. From those who failed, I learned what I didn’t want to be.

I’ve seen how other credit unions have failed, sometimes repeatedly, because of bad leadership. I’ve seen credit unions replace one bad leader with another who makes the same mistakes. Weak leaders hire bad subordinate leaders. They foster poor cultures that lead to poor member service, which, in turn, leads to poor financial performance. I believe bad leadership causes every credit union failure.

Failure is a good teacher.Innovation happens through an iterative process of trying and failing until you get to a good solution.

Small failures, of course, are to be expected. Failure is a good teacher. Innovation happens through an iterative process of trying and failing until you get to a good solution. We have closed branches when we chose the wrong location. We have terminated products that didn’t work. Those are failures in an iterative process.

The biggest failure during my 35-year career was our investment in member capital at Wescorp. SAFE was one of the biggest investors in Wescorp. I served for 12 years on the Wescorp board and my CFO was the chairman of Wescorp’s supervisory committee when it failed. We were surprised by the failure and lost about $13 million in Wescorp member capital, which we have since rebuilt. I still don’t know if there is something I didn’t do that could have prevented that loss. I feel responsible for not doing more to protect our investment, but I also feel NCUA and the other regulators that oversaw the investment bankers who defrauded Wescorp let everyone down. I have read Michael Lewis’s books about the practices on Wall Street and I believe the loss we suffered at Wescorp was the result of Wall Street fraud. Yet no one on Wall Street has gone to jail.

At SAFE we no longer have corporate credit union accounts. We manage our investments internally and our credit union transaction account is with the Federal Reserve Bank. The Wescorp failure taught me that regulators don’t do much to prevent problems and even less to learn from them.

Good leaders have shown me that you learn, and you press ahead.

As told to Brooke C. Stoddard

July 16, 2014

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