Home-Based Credit Unions, Slow Money, And Constraint

Callahan's leadership team weighs in on what's happening around the industry.


NCUA’s proposed rule to prohibit credit unions from operating out of private residences has far-reaching effects not only for the 74 home-based federal credit unions operating currently but also for every credit union in the country. Absent any legitimate safety and soundness reason, NCUA is legislating its vision of how and where a financial cooperative can best serve its members, usurping a role that belongs to the credit union’s board of directors.

Our Take:

NCUA’s interpretation of its legal authority to condemn home-based credit unions means it could, conceivably, also condemn any credit union it believes is not serving its members as the agency thinks it should.
Chip Filson, cofounder and chairman of Callahan & Associates inProposed Home Based Rule Affects All Credit Unions


The Great Recession renewed a nationwide effort to support local businesses. One outgrowth of that effort the slow money movement takes the view that community impact and need are just as important as financial return when gauging investments and capital. It’s a ground-up approach that strives to support the long-term health of a community.

Our Take:

Slow money may be a current buzzword, but this new philosophy shares deep-seated roots with the credit union movement itself. For more than 100 years, financial coopertives have been taking measured steps to build a legacy that includes patient, local investments, and which offer returns that resonate for generations.
Jay Johnson, executive vice president of Callahan & Associates inThe Value Of The Slow Money Approach


The five largest banks in the United States have a combined asset base of $8.2 trillion. By comparison, the five largest credit unions in the United States have a combined asset base of $126.9 billion. Yet despite these differences in resulting resources and regulatory power, credit unions are maximizing their limited means and holding their own against for-profit banking models.

Our Take:

Small financial institutions that have fewer resources must often think of new ways to tackle problems, which fosters creativity and problem solving. Examples of how this limitation encourages stronger performance abounds in our industry, and the added bonus of a cooperative approach means that such innovations can be perfected and propagated much more successfully than in other business environments.
Alix Patterson, chief operating officer of Callahan & Associates in Unleash The Power Of Constraint

July 15, 2014

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