Michael Buckley joins CUTASC as a Technical Systems Analyst, from Absolute Software Corp, Vancouver, where he was a network engineer. He has over eight years experience in network administration, design and support, and holds numerous professional certifications.

Mike Tarr had been CEO of Northern Savings Credit Union for 25 years and a force in the CU movement nationally. He died suddenly in June 2010.

In 2011, Tarr was posthumously inducted in to Canada’s Credit Union Hall of Fame.

Thrivent Financial for Lutherans is an odd nonprofit in that it inhabits the 318 spot on the Fortune 500 list. It is also Minnesota’s fourth-largest privately held company based on its $7.53 billion in revenue as of the end of 2010. The group was established based on two fraternal organizations founded in the early twentieth century, which then merged in 2001. Operating as a mutual support mechanism, Thrivent Financial for Lutherans now provides life insurance, disability insurance, annuities, long-term care, and other insurance needs. It also has an investment arm and a banking arm.

According to Thrivent materials, “The IRS defines a fraternal benefit society as ‘one whose members have adopted the same or a very similar calling, avocation, or profession . . . working in union to accomplish some worthy object.’” The IRS also notes that members of a fraternity band together as a society to ‘aid and assist one another and promote the common cause’ as well as engage in activities of a ‘beneficial and fraternal character.’”

Late last week, word leaked out that the Thrivent Financial Bank, which is a profit-making subsidiary of Thrivent Lutheran, may soon make a very unusual shift, becoming the Thrivent Federal Credit Union. This would make Thrivent one of just two conversions of this type in U.S. history, with the first occurring in 1996, when, according to American Banker, a bank founded for Eastman Kodak employees in the 1920s converted to what is now ESL Federal Credit Union in 1996, an entity with 300,000 members.

Credit Unions are, of course, nonprofit and owned by their members.

We found this an interesting story in the wake of the activity surrounding Bank Transfer Day, a movement that encouraged people to withdraw their money from big banks and deposit them with credit unions, and because Thrivent Financial is such an anomaly in the nonprofit world. What follows is an interview with Todd Sipe, CEO of the bank/soon-to-be credit union, if the regulators approve.

NPQ: We can see in the wake of Bank Transfer Day that there is some degree of increased interest among the public for financial institutions that function more in the public’s interest, but we understand that this type of conversion from a bank to a credit union is very unusual. Is that your understanding?

TS: There’s been some selling of bank branches into credit unions, but I think there’s probably only one that’s converted from a bank charter to a credit union, and that was a mutual bank. Mutual banks, by the way, are also owned by their depositors, so when they move to become a credit union they retain their ownership structure. It’s really rare for a stock thrift to convert to a credit union.

NPQ: What you would say was the major impetus for Thrivent Financial Bank to transition from being a thrift bank to a credit union?

TS: If you take a look at the regulatory landscape and the changes over the last couple of years, it was impactful to bank holding companies, especially if you were an insurance company that owned banks. We took a hard look at what is the most effective way to serve members of Thrivent Financial for Lutherans and clients of the bank. And, how do we do that in such a way as to have the right cost structure and controls in place? The Dodd-Frank act introduced new regulators to organizations like Thrivent. In the past, Thrivent was regulated by the Office of Thrift Services (OTS), which got absorbed into the OCC, so today the bank is regulated by the OCC. At the same time, at the holding company level it went from the OTS to the Federal Reserve. And there are additional costs and a burden associated with dealing with two regulators. We took a look at what was the right type of ownership structure that we could move to that would be the appropriate level of regulatory oversight but not have undue increase in cost or burden. After researching the needs and preferences of our members, the credit union model emerged as what we think is the best model to serve members of Thrivent Financial for Lutherans going forward. Credit unions are member owned and member governed, and that’s very consistent with a fraternal organization like Thrivent Financial for Lutherans , so it just made natural sense.

NPQ: Right. It seems like it is nicely aligned in theory, but why now? Why had this choice not been made before? It looks like previously the bank was actually born out of an earlier merger of a number of credit unions and a couple of other entities. Is that right?

TS: That is correct. Back in 2001/2002, AAL (Aid Association for Lutherans) and Lutheran Brotherhood merged to become Thrivent Financial for Lutherans. At the time, we had five different banking entities that they needed to merge. We had a trust bank andthree credit unions between the two organizations, and then we had a community bank in the Twin Cities. At the time, the thrift charter actually created the most flexibility to continue to offer all the products and services for both bank and trust. So it made natural sense to migrate into a thrift charter at the time. What’s happened between 2001 and now is, of course, that Dodd-Frank introduced new regulations and regulators that challenged us to take a look at our model and make sure that we continue to have the right model in place.

NPQ: So, this time around, were you concerned more about flexibility or more about cost?

TS: I think clearly the cost burden of having multiple regulators in here was a key driver.

NPQ: Have you been influenced at all by the recent flow of consumers away from banks to credit unions?

TS: I think consumers are looking for an entity that they can trust. Thrivent has always enjoyed a trusted relationship with its members, and the principles and values of being a faith-based organization obviously flowed down into the bank, and so we’ve always enjoyed a trusted relationship with our clients. So, I don’t think this move is to regain trust; that trust has always been there. The credit union model is a great model in today’s environment, so as we looked at options and that one emerged, clearly credit unions do enjoy a trusted relationship, so it reinforces the relationship we already have with our clients.

NPQ: How many members will the credit union have if the transition gets approved by regulators?

TS: We’re going to be about 40,000 members at the time of the transition to the credit union. We’ll be about $530 million in assets. It will be a fairly large credit union in the industry—in the top 10 percent.

NPQ: Going back to your survey of members, did you do a survey particularly about this potential conversion, or were you drawing from other questions that you had asked them previously?

TS: We did not have a specific survey that asked about this option. Our information was drawn more from conversations that we had with members, and gathered that insight from members more informally. I can tell you that we nailed it, because as we’ve notified our clients of the change, the feedback has been extremely positive. As of today I have not received one concern or complaint that we’re moving over, which is remarkable.

NPQ: Exactly what are the kinds of the preferences, as you put it earlier, of members that would have driven you toward a credit union structure?

TS: Some of the preferences, of course, would be this member ownership. As a member-owned not-for-profit organization, the profits that are made are usually returned back to the members’ owners in the form of better rates and fees. That was a driver of our decision to move to a credit union. In addition, we have decided that we want to be a faith-based credit union, which is different from the industry in a lot of ways. There are faith-based credit unions out there, but obviously we’re going to serve members of Thrivent Financial Lutherans, and Thrivent Financial Lutherans is a faith-based organization, and the credit union too is going to be a faith-based organization.

NPQ: So will this restrict your membership a bit?

TS: Great question. Obviously, existing clients are grandfathered in, but post-transition the credit union’s field of membership will primarily be employees, our field force, members, and volunteers of Thrivent; and you will need to meet our field of membership test through these.

NPQ: That’s interesting. So it could potentially limit your size?

TS: It could, but just to put it in perspective, at the time of transition we’ll have about 40,000 clients. Thrivent has approximately 2.3 million members and when you add employees and volunteers there’s somewhere between 2.3 and 2.5 million are eligible people for membership inside of the credit union. So, we have a lot of opportunity for growth.

NPQ: Finally, will this structure affect the taxes that you’ve paid as a bank? You will now not be paying them as a credit union. Is that right or not?

TS: A portion of it. The bank currently has assets of $1.1 billion. We’re moving the loans and deposits (worth $530 million) over to the credit union, and then the trust business (with $580 million in assets) that exists inside the bank today will stay inside the bank and convert to a trust company charter, which will remain a wholly-owned subsidiary of Thrivent Financial Lutherans. And the trust portion of it is actually bigger than the bank portion of it. And, so, that will stay as a for-profit tax-paying entity, and then this will move over to the credit union. The tax liability or the tax issue was not a key consideration in this. It wasn’t a driving factor in the credit union model.

Our total tax liability would be well below a million a year. So, the regulatory burden was going to be significantly higher than any tax break.

NPQ: Since you’ve made this announcement, have you heard from any other financial institutions that were thinking about the same thing or is there any sense that there’s a movement in this direction? I know that the field of thrifts has declined precipitously over the past 30 years, but do you hear of anybody else thinking about going in this direction?

TS: No, I have not heard of any bank considering converting to a credit union. Insurance companies that own banks are wrestling with this issue but I have not heard of any that are considering a credit union model.

NPQ will watch this story with interest. Will the ranks of those who put their trust in credit unions continue to rise? Will other banks consider converting? The use of credit unions in this country is already high relative to other parts of the world. According to the World Council of Credit Unions, more than 90 million Americans are members of a credit union as compared to 185 million people who are credit union members globally.

2012 has been recognised as the International Year of Co-operatives by the United Nations. This is an acknowledgement by the international community that co-operatives drive the economy, respond to social change, are resilient to the global economic crisis and are serious, successful businesses creating jobs in all sectors. More

Toronto ON: Canada’s top ten CUs. The big get bigger, the small get …?

The largest 10 CUs reported growth higher than the entire top 100 group. With an 8.9 % increase in six-month growth, these 10 CUs increased their share of total system assets to 45% (up from 43.5% six months ago). This growth is largely attributed to the amalgamation, in June 2011, between Meridian and Desjardins. Meridian, however, remains in fourth position in the listing. The appearance of the largest 10 CUs did change slightly over the last six months. Coast Capital Savings in BC moved into the second position, whilst Servus in Alberta shifted to third. The largest 10 CUs had combined assets of $65.3 billion – an increase of $5.3 billion from the $60 billion recorded at fourth quarter 2010.

A further breakdown shows the 5 largest CUs with gains of 9.9% over fourth quarter 2010. This small group of CUs now account for 34.9% of all system assets in the country (excluding Quebec), with combined assets of $50.6 billion. Those CUs ranked 11 to 100 recorded a six-month growth rate of 3.2% in assets, while assets in the remaining part of the system experienced a mere 0.5% increase.

Regional representation on the list is as follows: BC 25; Alberta 11; Saskatchewan 11; Manitoba 17; Ontario 29; New Brunswick 5; Nova Scotia and Newfoundland at one each.

The top ten CUs are:

• Vancity
• Coast Capital Savings
• Servus
• Meridian
• First West
• Conexus
• Steinbach
• Assiniboine
• First Calgary Savings
• Cambrian

All rankings are the same as for the 4th quarter 2010 except for Coast Capital and Servus, who have switched positions. Further statistics and details and graphs here

Credit unions affiliated with Credit Union Central of Canada may register for access to Filene research for free by using this link:http://filene.org/home/cucc

Rachael King, Bloomberg Businessweek: Michael De Frenza scans the crowd of 50 or so well-dressed professionals mingling near a bar at the W Hotel in San Francisco’s South of Market District. De Frenza, a recent transplant to the Bay Area, is here in search not of a date—but of a job. In the five weeks since De Frenza, 34, returned to the area after a two-year stint in Toronto, he has received five offers. “I’m taking my time trying to find the right fit,” he says.

I Love Rewards, which provides companies with services to motivate employees, arranges cocktail parties like this one every other week at the W Hotel to help it recruit 40 people by Sept. 30 for a new West Coast sales outpost. “Just in time for us arriving in San Francisco, the market has gotten extremely hot,” says Razor Suleman, chief executive of the company. “San Francisco is coming back to the days when candidates have two or three job offers,” he says.

Competition for cloud computing engineers, security experts, and mobile developers as well as sales professionals in the technology industry has gotten so fierce in the past six months that companies are going to greater lengths to woo prospective employees. They’re throwing lavish parties, handing out free food at conferences, doling out $50,000 signing bonuses, and offering perks such as free haircuts and medical care at the office.

MORE SIGNING BONUSES

The tech sector is fueling a job boom that stands in stark contrast to the malaise of the general job market. The nationwide unemployment rate ticked up to 9.2 percent in June, according to the Bureau of Labor Statistics. At the same time, the unemployment rate for tech professionals dropped to 3.3 percent, from 5.3 percent in January. “That’s pretty close to full employment,” says Alice Hill, managing director of technology career website Dice.com (DHX).

“It’s such a thin market, it feels like everybody is employed already,” says Adam Pisoni, co-founder and chief technology officer of Yammer, which sells software and services for social networking in the workplace. The San Francisco company is doubling its engineering staff. “Engineers have 10 recruiters calling them.” The company would like to hire between 50 and 100 engineers this year, Pisoni says.

Companies are employing a variety of strategies to attract talent. Saba Software (SABA) and Digital River (DRIV) recently paid C-level executives $50,000 signing bonuses. “While signing bonuses at tech companies are not uncommon, their use has become more prevalent recently as the economy has improved and competition for talent has heated up,” says Aaron Lapat, managing director of the technology practice at executive recruiting firm J. Robert Scott. Recruiters are also circling Cisco like vultures, anticipating the August layoffs in the hope of finding qualified employees.

BELLS AND MUSIC

Recruiting tactics from the late 1990s are starting to make a comeback, too. Last year, Appirio hired a taco truck and parked it at Dreamforce, an industry conference for cloud computing professionals. Attendees couldn’t help but notice the signs on the truck saying that Appirio was hiring as they waited in line for free tacos.

When Dreamforce happens again later this month, Appirio plans to ply attendees with more food, but the company wouldn’t divulge exactly what it plans to serve. Appirio anticipates that about 25,000 people will attend Dreamforce, the cloud computing trade show organized by Salesforce.com (CRM). “We assume that 10 percent are actively looking for a new job,” says Narinder Singh, Appirio’s chief strategy officer. The company hired 110 workers in the first half of this year and is looking for another 140 by year’s end.

In 1998, when Mark Barrenechea worked for Oracle (ORCL), he hired an ice cream truck and parked it outside of then-competitor Siebel Systems. At the time, he was a senior vice-president for applications development trying to find engineering talent. The bells and music would signal employees to come outside, he says.

WATCHING FOR LAYOFFS

In his current role as CEO of supercomputer-maker Silicon Graphics International (SGI), Barrenechea uses a different tactic. “We haven’t had to resort to ice cream trucks and cocktail parties,” he says. Instead, SGI is going after employee referrals and targeting companies where there’s organizational change. The CEO says the company has found supercomputing talent at Oracle’s Sun Microsystems and may find technical sales talent from Cisco’s upcoming layoffs. SGI plans to expand its sales force 10 percent this year, adding about 25 positions. Cisco declined to comment.

Suleman at I Love Rewards also encourages employees to refer job candidates. He’s offering a luxury trip to Las Vegas in September for any employee who refers a new hire. Even though each employee will stay in a suite, Suleman says it’s 80 percent less expensive than using a recruiter.

In the end, though, some prospective employees will be wooed with competitive compensation packages that include cash bonuses. When Saba Software hired Shawn Farshchi as chief operating officer on June 1, the company agreed to pay him a yearly salary of $265,000 with an annual performance incentive bonus of up to 70 percent of his base salary. That offer also included stock options and a signing bonus of $50,000.

Farshchi previously worked at IBM’s (IBM) Coremetrics Web analytics unit and at Cisco’s (CSCO) WebEx operation, which he took from a $60 million business to more than $300 million, says Saba CEO Bobby Yazdani. Farshchi has expertise in selling a product globally, which is a skill Saba needs, Yazdani says. “He was someone that we had our eye on, and we were not going to lose that battle for $50,000.”

INCREASING CRAZINESS

As companies compete for a limited talent pool, they’re upping the ante. “There’s so much poaching going on, and now we see the rise of the crazy perks,” says Hill at Dice.com. Hill says she’s seeing companies offer a range of services, from car washes and free haircuts to onsite doctors, dentists, and notaries. “Qualcomm has a weekly farmer’s market,” says Hill.

No doubt these developments are a welcome change for workers after the recession. For companies, though, this means an increase in labor costs as salaries rise and businesses try to retain workers with perks and retention bonuses. It may also force companies to grant richer stock option awards to attract the right programming talent, according to a Fitch Ratings report released last month.

The percentage that stock-based compensation makes up of total operating expenses can serve as a proxy for technology labor market tightness, says Jamie Rizzo, an analyst at Fitch Ratings. At Adobe (ADBE), options and other stock awards accounted for 8.6 percent of total operating expenses in 2010, up from 7 percent in 2007. Intuit (INTU) saw that number increase to 5.7 percent in 2010, from 4 percent in 2007.

SKILLS WITH SHORT LIVES

The rush to find workers is symptomatic of a deeper problem in the tech industry. The supply and demand of talent is out of sync, says Professor Peter Cappelli at the University of Pennsylvania’s Wharton School. Companies are looking for exactly the skills they need today to deal with their clients. “We don’t want to have to train anybody, and when those skills become obsolete, we don’t want to retrain them,” he says. Companies tend to hire people with IT engineering degrees, use those skills for five years, and then they want a new crop, says Cappelli, who researches human resource practices and talent management.

“It means they are hiring and laying off at the same time,” says Cappelli. “It’s a really bad thing for the economy and for the companies themselves, because it’s putting them at the mercy of the labor market.” It also leads to labor booms and busts, which didn’t happen as much before 1983 because companies would train and retrain people, Cappelli says.

Still, Michael De Frenza, who sold time shares until the recession, is happy to find the tech job market is on the upswing. In his last job, he traveled 80 percent of the time. He has two young children and says he’s ready to stay put for a while.

By Brandon Michaels, , San Francisco Fire CU:  That’s right! Financial institutions in India, and around the world, are embarking on a risky, but HIP, new branding message: NEXT-GEN branching. Each branch will have approximately 300-500 sf of lounge areas to play video games, conduct business via Wi-Fi, and conduct financial business. The idea is to make banking ‘hip.’ According to OpinionResearch Corporation, only 10% of the general population feel comfortable enough to do their banking transactions in an online format, secure or not. However, they found 21% of young adults, and growing significantly, feel comfortable. Thus, financial institutions in India are playing into that by creating branches that are full of Wi-Fi, video games, high-tech lounges and banking interfaces in order to try to make the population, and specifically young adults, more comfortable.

In direct relation to this, mobile banking is also of imperative stature. Young adults love the ability to do their business in an online, mobile format. But, according to many blogs, such as the wireless weblog, financial institutions are one of the last industries to embrace mobile banking because, in part, “they continue to be run by traditionalists.” The way of the future for banking is via cell phone and/or PDA. 89% of the general population haven’t considered using their cell phones to conduct banking transactions. Banks, according to OpinionResearch, are doing ‘OK’ in this market, but they don’t push the envelope. It’s all “keeping up with the joneses.” Where are Credit Unions in this? Credit Unions are never known to be the movers and shakers in this industry. Is it time that we open our eyes and embrace this advancement of technology and the shifting of societal norms? Is it because we don’t have the right type of leadership in place to embrace it? Ten times the number of people will be using mobile banking in 2011 than in 2007. It’s time that we start moving toward this so that we can have our ducks in a row to capitalize on this market. We need to fight and elbow our way into this industry. They aren’t just going to fly to us. We need to fly to them, wherever they are, and at whatever time.

Photo: Tincho.·.·. / Andrés Martín, using Flickr creative commons license