Did Enough Happen in 2018?

How did this year feel to you, your members and your community? I’m not a sentimental kind of person, and I’ve been truly asking this question to our staff and those around the credit union universe. I realize that answers to those questions can only be given through the lens of your own eyes and personal lives. But the consensus answer appears to be somewhere in between tired and thankful. From our perspective, that seems fairly accurate in the sense that credit unions have experienced so many highs and lows throughout the year.

Most notably, for our team, those highs came in the form of some regulatory relief efforts happening in Washington, D.C. And the lows … whew. Those came at us hard in the form of so many natural disasters, as well as a few fraud and very expensive taxi medallion calamities.

On the financial side of the lows, we watched the downfall of Kam Wong, the former president/CEO of Municipal Credit Union. Late last month, Wong pleaded guilty in U.S. District Court to embezzling almost $10 million over a five-year period. As a not-even-close-to-a-millionaire, I cannot even begin to relate to needing or using that amount of money on cars, apartments and fake dental work. My first thought really was, “Why fake dental work? For that much money, I’d have some awesome teeth!”

While we wait for Wong’s sentencing, scheduled for April 2019, and wonder if he’ll ever be able to repay the $9.8 million in restitution, we are keeping a very close eye on more fallout from this case. We can’t give away details just yet, so stay tuned for those stories.

We also watched as the radically devalued taxi medallion loans came crashing down on two large credit unions: Melrose Credit Union and LOMTO Federal Credit Union. Most experts realized it was only a matter of time before it was necessary to merge or even dissolve these credit unions. While Teachers Federal Credit Union took over both of these credit unions, it did not take on any of the taxi medallion-related loans.

Our CU Times staff had some internal debates of exactly how much those loans might be worth. We had a pretty good idea, but without confirmation from the NCUA, we never felt comfortable publishing that amount as it was still a hunch. While we still have not received official word from the NCUA about the amount, our readers can take a look at the $744.9 million drop in the Share Insurance Fund in the third quarter of 2018 to get a pretty good idea of how much we’re talking about.

Here’s a bit of 2018 trivia when it comes to taxi medallion loans: President Trump’s former attorney, Michael Cohen, held a significant amount of taxi medallion loans through a New York credit union. We initially reported on it and then had a healthy debate with our full team about how to continue the story. We ultimately decided to stop pursuing it for two reasons: 1) Cohen was tied up in the Robert Muller investigation. 2) See the previous reason. Because when someone as high-profile as Cohen is under Special Council investigation, it’s extremely difficult to secure reliable information that would benefit our audience. Sexy story? Yes. Beneficial to you, our readers? Probably not.

As we turned the page into this year, credit unions were still (and are still) trying to recover from Hurricanes Maria and Harvey. Then, in early January, credit unions closed down from the Carolinas to Maine as a huge winter storm punched the east coast. Fortunately, that was the least-damaging weather event of the year.

Hurricane Florence brought 40-plus inches of rain into the Carolinas. Some credit unions there are just getting back to normal. Hurricane Michael, one of the most powerful hurricanes to make landfall in the U.S., did almost indescribable damage to the Florida panhandle. We interviewed several officials from LSCU and credit unions in the area that were directly hit by the storm, and it was heartbreaking and a little inspiring at the same time to hear their stories and see the images they shared with us and our readers.

Tyndall Federal Credit Union, which took a direct hit to two of its branches, recently notified CU Times that it is giving $2.7 million to its members as the Panama City, Fla., community rebuilds and recovers. According to a statement from Tyndall, “The morning before Thanksgiving, active members who were impacted by Hurricane Michael woke to find an extra $50 in their savings accounts.” A credit union spokesperson said they hope this money can “assist with their storm recovery, pay for holiday expenses or help someone else in need.”

Why did they do this? Tyndall President/CEO Jim Warren said, “This is the time that our members need us most.”

I don’t think we could have a more empathetic and opposite example to what we’ve been reading about Wells Fargo’s “glitch” of accidentally taking away customers’ homes. Someone should think about using Tyndall in a national marketing push to show a literal difference between banks and credit unions.

And finally, in November, we watched as Paradise, Calif., burned. The Camp Fire, as it was called, raced through most of Paradise and some surrounding communities. And the fire miraculously stopped just feet away from the Sierra Central Credit Union branch in Paradise, as we saw from a video shared by a credit union member who shot it while walking around the branch.

The rebuilding of Paradise could take several years. For our team, this story and other disaster stories this year had us holding our breath as we waited for word about the fate of credit union staff and their families.

I’m personally moved by what we often find during the low points – especially when it involves a credit union community.

Because inside those lows, which the credit union industry is still recovering from, are some wonderful and inspiring stories. And we’ll continue sharing those stories with you in 2019.

My best to you, our readers, this holiday season.

Michael Ogden is executive editor for CU Times. He can be reached at mogden@cutimes.com.