Warning Shot Across the Bow

Navy Federal Credit Union really messed up. Considered the golden child and what a lot of credit unions want to model, they've not just created a lot of problems for themselves, but for the reputation of the entire credit union industry.

I'm not the kind of person to kick someone when they're down. But in this case, I feel like kicking. I've had several days to think about it, and I'm still ticked.

I'm not mad because of some disillusionment I had about the credit union industry. I'm ticked because of who did this and with such apparent disregard to compliance and ethical reasoning.

For as much as credit unions enjoy placing themselves on some higher platform than banks, it turns out that they are just as shady.

I've enjoyed reading the comments from readers on the Navy Federal articles because that's when you get a better pulse of how the world is really reacting (if you discount all of the trolls blaming every issue on Obama and/or how this wouldn't have happened if kids didn't listen to rap music). Tell me what you think of these comments taken from news articles about Navy Federal's fall from credit union grace:

"I have been a NFCU customer for over 30 years. Its service has gotten horrible. By contrast, USAA has consistently been the best company I have ever been a customer of. As CEO of NFCU, retired Admiral Cutler Dawson should be ashamed of himself for screwing service members over so badly with these punitive penalties."

Forget the fact that this person ended a sentence with a preposition and focus on the positive position this puts USAA in (dammit preposition)!

"You can't treat people wrong and think you're getting away with it. What you do in the dark comes out in the light. As a retired Navy Veteran, I feel disrespected, the majority of NFCU members are military, and this is how we are treated. I would love to tell my story. REALLY NFCU!!!!! GO USAA!!!!"

Sure, there's an excessive use of exclamation points, but it gets the point across – Navy Federal is becoming synonymous with disrespect. Also, more praise for USAA.

"NFCU and all those so-called 'military-supporting companies' are no different than the hustlers outside military bases. These companies are "FOR PROFIT" businesses and they will say and do anything to get business and say and do anything to anyone who does not pay his/her debt regardless of circumstances."

So now Navy Federal is being compared to payday lenders. That's not good.

"I am a banker and many of the things NFCU was cited for are illegal."

I am not a banker, and we will see if this goes any farther into the court system.

"Wow … what happened to ethics? Yes, these people didn't make a payment. But to threaten their jobs? Lie about what could be done? How does that make Navy Federal right? I don't like the CFPB either. But in this case Navy Federal was over the line and deserved some kind of punishment."

I'd say a lot of comments also defended Navy Federal by saying things such as, "go after the deadbeats who don't pay their bills." And, "NFCU didn't actually take action, they just threatened dumbasses who weren't paying." While that may be true, it misses the point of the way Navy Federal went about it.

Credit unions aren't perfect or untouchable. But they do stand for something greater than the rest of the financial world – your members and your cooperative values. With all of the credit union embezzlement stories we've covered this year and now this bombshell, or torpedo, from Navy Federal, maybe now is a time to rethink how your credit union is capitalizing on those unique values in the financial world.

Just a couple of weeks ago we were reporting on Wells Fargo's massive and ugly practices that were uncovered and how credit unions could capitalize on the Wells Fargo bad press. Well, now that similar(ish) things have been uncovered in our industry, where does that put us, you, your members? We talked a lot about trust during the Wells Fargo coverage. Have we lost that?

Being a credit union requires a constant and very public education to members and potential members about who you are. You have some great rates and incredibly low fees. But if you don't have trust then you're just another Wells Fargo.

In our positions at CU Times, we report the news – good or bad. While we have a mission to help credit union executives and credit unions become better at what they do, we also have a duty to report on what's happening in and around the industry. I think we are on a slippery slope of becoming a news outlet that will be buried in only reporting scandals and criminal activity. If that's the case, then well … get ready for a lot of ugly to be uncovered. That's not a threat. We go where the news goes.

This isn't the 1980s where it's easy to hide your flaws. This is the digital age. The sharing-our-experiences age. The here's-what-I'm-eating-for-dinner-and-oh-by-the-way-I-got-totally-ripped-off-by-my-credit-union age. We are narcissists. And with narcissism comes the likelihood that once we are hurt, we won't come back.

Thanks Navy Federal for the wake-up call and the warning shot across the bow.

Michael Ogden is executive editor for CU Times. He can be reached at [email protected].

NOT FOR REPRINT

Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.