Credit Union Exam Solutions Presents With Flying Colors

Mark Treichel: Hey everyone,
this is Mark Trekel with another

episode of With Flying Colors.

I am back here today with Mike
Mola, a partner at Olden Lane.

Mike, how you doing today?

Mick Mac: Doing great, mark.

Thanks for having me.

Mark Treichel: You got it.

Glad to hear it.

Now, one of, one of the episodes you
and I have done and I can't remember

if we've done this two times or just
once, but we've talked about the NC

annual NCUA annual report and your
takeaways, and then my takeaways about

your takeaways, but that's most of
what we're gonna talk about here today.

For listeners or watchers who have
not seen you or heard you on the

podcast before, could you give a
little bit of background of yourself

and Olden Lane and what it is
you're all doing for the system?

Mick Mac: Sure.

Olden Lane is located in
Bridgewater, New Jersey.

We've got nine professionals working
here now and we fashion ourselves as the.

Only to our mind investment bank
that deals exclusively with credit

union and credit union issues.

We represent credit unions, large
and small, all across the country.

If we've made our name anywhere, it's
been predominantly insubordinate debt

where we've done about 60% of the
deals that have happened in the last.

Six or seven years by either
deal count or dollar amount.

We're increasingly moving into
the m and a sphere because that's

a pronounced need in this in this
environment and in this movement.

And as of yesterday we're
announcing this is a worldwide

scoop for Mark Tris podcast.

As of yesterday, we're announcing that
we're taking our talents, if you will.

LeBron said to Stifel.

We will be joining Stifel
Nicholas and Company very shortly.

We are tremendously excited about that
because our two business lines slot in

perfectly with what they already have.

They're a massive player in the
credit union space and we are just

thrilled about what we can do together.

Mark Treichel: That's exciting.

I know, when you and I when you told
me about that, and it was explaining

how what you do and what they do fit.

Yin, ying, yin and yang.

Yin and yang.

I'm gonna get part of that wrong.

The Chinese is not my expertise,
but it's, it seems like it's a great

fit and I'm excited for you and your
clients and of course for Stifel.

Mick Mac: Yeah, we've got
a lot more capabilities.

We've got a bigger team and a and
we add, smarts all across the board,

and we've worked with them on a
number of projects over the years,

and we could not be happier about the
quality of the person we're joining.

So it's going to be great.

Mark Treichel: That's awesome.

It's so we're recording this April 21st.

This episode will be out April
28th, I think, next Tuesday.

And, as we're sitting here I've
got my half zip on and that's it.

You referenced LeBron James.

So I'm gonna reference Peyton Manning.

I've got my Peyton Manny inspired half
zip 'cause it's really cold where I'm at

today and the NFL draft is on Thursday.

Your New York Giants I think have a
couple, two of the top 10 draft picks.

I'm hoping they screw those up.

So some guys fall to my Vikings, but,

Mick Mac: don't worry,
they'll screw it up.

What do they say?

Past performance is not
necessarily indicative of.

Mark Treichel: I love it.

I love it.

All and by the time this plays more
people will know about your merger

and how that's all gonna work out.

And more pe and everybody will know who
their teams picked or should have picked.

So with that.

Let's jump into the annual report and
I saw your LinkedIn post and you broke

it into the Mag Magnificent seven.

So I'm gonna, I'm gonna walk through the
seven topics you brought up and we'll walk

through that and then maybe do a cleanup
at the end if there's anything else

that that we still need to chat about.

Sound good?

Mick Mac: Perfect.

Mark Treichel: All right.

So item number one.

Your takeaway from the annual report
was that the system is strong, but

the tone is cautious and rightly slow.

Rightly can you dive into that?

Mick Mac: Sure.

The first thing I would say is that I have
a sign above my desk and it says, the laws

of economics are like the laws of gravity.

They are non-negotiable.

So that's the lens through which we look
at everything here at Olden Lane, and

when you look through that lens you've
got to be honest about what's going on.

So the count of credit unions we're
at 42 87 at the time of this report.

It.

Down from 44 55 last year.

So a three and a half, 3.7%

decline.

Why consolidation?

Mostly right.

We've had a few liquidations in the
last year but it's really consolidation

and with 4,200 left on the playing
field, losing close to 200 a year,

you can do the math mark on how
long we can continue to do that.

On the creation side, we
talk a lot about de novo.

I know Chairman Halman cares a lot
about de novo, but we're nowhere near

where we need to be on de novo, and
we're not de novo ing, if you will.

I'm turning it into a verb new credit
unions that are significant in terms

of size, shape, and member reach.

If we're going to be replacing
folks, we need to replace 'em with

credit unions of Hef, then frankly
the regulations don't allow it.

We can go into how you can
grow a credit union, but you

can't start big and grow big.

You have to start small and it
takes many years and a slow growth

pattern to get anywhere of size.

Asset level, we're at 2.43,

2.43

trillion at the time of this
report up slightly from last year.

Nothing to say there.

That's natural growth.

Average asset size per credit union.

Interesting.

We've gone to 568 million up from five 18.

That's a 10% increase in a year, so
our credit unions are getting bigger.

Why?

The ones that we're losing are on
the smaller end of the barbell.

So the asset size is
gaining some good news.

The average ROA at a credit union up
to 79 bips from 63 bips a year ago.

I think that's part of the story
we're seeing, repair in the overall

macroeconomic picture, although
again, I'd be a little cautious.

We've got 144.7

million members up from 142 million.

I hate the member number.

I think we've talked about this before.

It's a tough number to
put your arms around.

I don't know who's a member
of multiple credit unions.

I don't know how many of these members
are true core members in a geography

or a seg base versus indirect members
or foundational associational members.

So it's hard to say anything
about a membership number per se.

I can tell you that the membership
skews heavily to larger credit unions.

If you were to plot out over the last
decade where the growth is, all of

it is in the larger credit unions.

The largest cohort of credit unions
is growing at about 10% annually.

Over the last decade, the
smallest group of credit unions

are declining in membership.

In fact, the median credit union
in the US has negative member

growth for the last six quarters.

New membership per
branch is in a free fall.

It's now half of what it was in quarter
two of 2023, and the cost of acquiring

a new member is insanely expensive.

About to touch $900 per member.

Mark Treichel: Wow.

Mick Mac: That's up from $400 per
member just two, three years ago.

So there's a lot underneath.

The net worth is healthy at 11.3,

but I always caution people the
median or mean net worth credit union

is not what you're worried about.

It's the one on the low end and
there is some error, if you will,

or some artificial bolstering of
that number because there's still

tax credits that are in there from
the employee retention tax credit.

I can tell you we worked with
firms and added $250 million

by ourselves to net income.

I would assume that the industry probably
did about three or four times that number.

And that's still in that retained
earnings or in that capital number.

The other thing that's in that capital
number is the effects of the generational

capital that came from the EIP program,
the US Treasury bolstered to the tune

of about north of $2 billion bolstered
this industry with 30 year capital.

So again, overall good numbers,
but there's reason for caution.

Mark Treichel: When I wrote down a
few different things that you said.

The median credit union has
shrunk for six quarters.

That's like a wow statement to
me, and I think as you said it, I

think of some other analysis I did,
and it's a reminder of that, but.

And of course you're a bigger
math guy than I am, but the

median is the middle most, right?

That's the one smack dab in
the middle asset side wise.

But to have shrunk in,
is it members, right?

For six straight quarters?

That's that's off the hook.

Crazy.

When you think about that, what and the
odds are those less than that are nine

times outta 10 doing something similarly.

The one other item, as you're
talking about new charters.

And I don't know, every
time I go to nnc.gov,

I wonder if they're gonna
change the photo on the front.

'cause the photo on the front is
nnc a Charter's Haven Federal Credit

Union, which happened, I don't
know, 3, 4, 5, 6, 7, 8 months ago.

They haven't, they've been doing a lot of
things, updating regulations, but they're

not dropping that into their headline.

They're they're proud of one charter.

And those new charters
that come in, some of 'em.

Survived two years.

Some of 'em survived five years,
some of 'em survived 10 years.

Meanwhile, you've got fintechs doing
a lot, which we're gonna get into.

And you've got the Trump administration.

Being appearing to be willing to charter
some new banks, which is gonna create some

more competition for credit unions and
in particular, those small credit unions.

Yeah, it's a, the numbers look good
but there's challenges rolled up

underneath and brewing, which goes
to that headline of the numbers.

I gotta pull back.

Let's see.

I got your notes here on the.

Yeah, but the tone is cautious, right?

That links back to the tone
is cautious in my mind.

Mick Mac: You've also got, look,
we, you guys, like you and I,

we dig deep in these numbers.

We live in this world every day and we
pay a lot of attention to it, and we get

a lot of insight baseball, but we have
to pull back and we have to remember.

All of these institutions combined
are 60% of JP Morgan, give or take.

Mark Treichel: Sure.

Mick Mac: So somebody wakes up on
the wrong side of the bed in terms of

a policymaker or a real influencer.

And we may all be looking at
something very different tomorrow.

And you gotta fight.

Like you're the somebody told me you
gotta fight like you're the third monkey

and Noah's Ark is only bringing two.

That's kinda what it is every day.

And you're doing it obviously for a
good reason and on behalf of members.

Mark Treichel: Absolutely.

Mick Mac: But, let's understand
the world in which we're playing

and, one of the pieces we did about
six months ago was, SoFi, which

is not a top 50 bank in the us.

They gathered as many new members in
Q3 of 2025 as the 4,400 institutions

that we call credit unions.

And that's just staggering.

Mark Treichel: Staggering indeed.

Mick Mac: The other thing is for caution.

If you take delinquent loans and
charge offs and add 'em together,

and then you put 'em all on top of
the average loans at a credit union,

we're now at about a decade long high.

So the credit quality of what
we're holding is still tenuous.

Now, it's not breaking the glass
kind of nervousness yet, but

the trend line is not great.

With that trend line is a lot of the
deflating of the air that came from some

of the pickup we had because of this
COVID relief and some of the changes that

happened behaviorally among our members
and among our ability to staff things.

So opex is flying.

It's hard to control.

We're in an inflationary environment.

The biggest contributor to
everybody's opex is their staffing.

And everybody seems to be, not able
to reduce head count and or having to

continue to put more fuel in the furnace.

And so it's weighing on our prospects.

Mark Treichel: Yeah.

And

Mick Mac: then, and then the
other thing go ahead Mark.

Mark Treichel: No, I was just
gonna say, even though the ro

a's up, what, 16 basis points?

That can be eaten up real quick with
with a little bit more delinquency,

10 15 more basis points of delinquency
that turns into charge-offs which

then hyper hyper impacts your Cecil.

And I, we, Cecil would behold, I
was just doing some analysis on

how the funding is in Cecil, right?

And there's, some folks out there
looking through rose collar glasses and.

Exams will eventually pick up on that.

But yeah.

So you were gonna say
something, I'm sorry.

Mick Mac: The last thing I would
say is, I deal in the world of

aggregates in a certain sense.

So you and I get together and I say
this is my view of the overall industry.

We, the last piece we did on
our newsletter, I think it

was entitled, everything Has a
Season And the point of it was.

Each credit union not only has
to understand where it is in the

macroeconomic picture, which again
we can understand in a big way, but

also has geographic particularities.

But the other thing is you have
to understand where you are in

your own business maturation.

How far along in your tech refresh are
you, how far along are you in your core

that you're gonna be looking at a core
conversion next year, or you just got

it behind you and it's free sailing?

Where is your member base and how old are
they vis-a-vis where you need them to be?

And so what we've said to people is
you've got to understand not only.

The best practices of the
industry and where you are in

a big, broad, macro picture.

But you have to understand your
own decision making with a tailored

approach that accounts for the
specific time, place, and prospects

of your business, all of which are
unique credit union by Credit Union.

Mark Treichel: No, makes total sense.

And I like your reference to the Mamas
and papa songs under the seasons there.

That's awesome.

A me.

So no.

Let's pivot to number two.

A meaningful shift in regulatory
philosophy is in full swing.

Mick Mac: Okay.

This is, this is a way of just saying
there are Democrats in the world

and there are Republicans in the
world and sometimes Republicans take

control and have a philosophy, and
sometimes Democrats have control.

Look, it's not lost on
anybody that this is thematic.

It's similar to.

What's happening in the banking world?

We're seeing the elimination
of certain things.

We're seeing an emphasis on deregulation
or, whatever buzzword you want to

you wanna use, but essentially more
permissive from the regulatory standpoint.

We can argue about whether that's
good or bad, but that's a pendulum.

It swings, it often swings too far
in one direction, only to swing

too far in the other direction.

When we sweep in a new government.

But we're seeing things like the
elimination of reputational risk

a formal rejection of what they
call regulation by enforcement.

This is a particular
one for Chairman Halman.

They've extended exam cycles and we're
seeing, I think we saw today, number

10, in the deregulation efforts.

Mark Treichel: Yes.

Mick Mac: Today's was
particularly interesting.

I haven't read it yet, but certainly
I, pulled it out, looked at it.

Mark Treichel: Yeah, so number 10 was.

Lightening up the rules on credit unions
being acquired by banks and I don't know.

Chairman Halman, if you're listening,
how about coming out or finalizing or

providing some guidance on credit unions,
purchasing banks that was promised a

long time ago in a proposed regulation.

And Mike, I'm gonna go
down a rabbit hole here.

And in that proposed regulation, it
said that we will disclose in the

National Supervision policy manual.

How you can how you can structure
your packages for for acquisitions

of banks and we'll put it in a
national superposition policy manual.

Since then they haven't done it.

They haven't finalized the regulation,
which they're not gonna do, because

Trump doesn't want regulations.

And you can be on either side
of where you wanna be on that.

But the link where they
used to actually show.

A little bit of what they looked
at on, on acquisitions is dead.

And it's not redacted.

It's just dead.

Which is a whole other issue
I bring up occasionally.

The NSPM, but and on the regulatory
philosophy in my seven and a half

years as executive director, I worked
for four NCA board chair and it

swung back and forth DRDR, or RDRD.

And one of the things that
was exhausting for me.

Was when orange was per, orange was
orange one day, and the next day orange

was purple, and purple was orange.

And having to, circle the wagons
and go in the other direction.

And that's just the, that's partially the
beauty of the country we live in is that

the pendulum swings and you go too far
this way and you get Brock back this way.

And and the middle is where the most
of us are in reality other than the

fringes, although the fringes seem
to control conversations sometimes.

But that was one of the things that,
you know made me wanna depart from

government work and get out and work
in the real world with credit unions.

Not that NCA wasn't the real world.

But that politics side of it where the
pendulum can swing is pretty dramatic.

And, the items you raised are
substantially different than what it

would've been under Harper, what it
would've been under Matt's Rick Metzker

and the, the extended exam cycle, I know
that staff is a little worried about

losing 27% of staff and delinquencies
at the highest point in time in how

many years charge offs are high.

And the agency is pushing innovation
which is great innovation.

You need to innovate or die, right?

But having less people to look at that and
then going in less frequently is a, is a.

Recipe for insurance fund losses
and credit unions, smaller credit

unions that are gonna go away.

And again, that's just,
it's part of the cycle.

Mick Mac: Yep.

No, I listen I agree a hundred percent,
but we see it, those of us that have been

around long enough or somewhat used to it.

And just again, have your head
on a swivel and understand the

environment in which you're playing.

There's not much to say other than.

You know that, that's understand,
how the deal is dealt.

Mark Treichel: Yeah.

You gotta, everything in life
is a game with rules, right?

You gotta figure out the game,
figure out the rules, and then

figure out how to succeed.

Yep.

So item three on the magnificent seven,
innovation is no longer peripheral.

It is central to the agenda.

Mick Mac: Look, it's difficult for a
regulator to do much here to push the

horse out of the barn, but they're
doing as good a job as they can.

They're telling you, look,
you're gonna have to innovate.

To your point earlier, let's
take stable coin for example.

They set out in, in, in
early 2026 some rulemaking.

Trying to remove the ambiguity, trying to
tell credit unions, you can embrace it.

It's now permissible, albeit through a
subsidiary signaling that they're not

prohibited, they're legitimate, and, go
get 'em and don't complain that others

are doing it faster because it's not gonna
really be the NCUA that's in your way.

Of course there's a lot of other things
to navigate here, including a coordination

problem and a, and an understanding about
your own bigness and your own ability

to survive with a coin that may or not,
may not get adopted on a broad scope.

But again, it's early days and
here's where the regulators

doing the best they can.

And they're, we've seen it time and again.

We saw it in derivatives.

The regulator was actually faster
to tell people to use them than

the people were to adopt them.

And those that understood it could
read the tea leaves and got in

front of it were probably helped.

When we had the interest
rate volatility that we had.

I, I believe the NCA was early
on the pro permission to up the

ability to take non-member shares.

They upped that limit earlier
than people needed it.

And honestly, when people did
need it, it bailed them out

of a hell of a lot of trouble.

Mark Treichel: Yeah, great point.

Mick Mac: And I think we're slow to
give credit to the regulator where

the regulator is actually further down
the road than we're willing to adopt.

So again, I think.

Them signaling out loud that,
we're open for innovation.

Of course Chairman Halman has
been a proponent of everything,

innovative from crypto to stablecoin,
to, to anything in between.

Certainly we will love to have those
conversations and is not shied away

from embracing people who want to get
into that realm in a responsible way.

There's a lot of work to do.

It's still early days.

Just by nature, their size, their shape.

Credit unions are not gonna
be the tip of the spear at the

innovation here, most likely.

But you gotta be a fast follower
and you gotta understand a path and

you gotta keep an eye on it because
otherwise you're gonna be swept away.

Mark Treichel: Great point.

And I saw chairman Hotman speak at
GAC and he talked a little bit about,

about, crypto and stable coins.

And made a reference that I
hadn't heard before and then

did a little bit of research.

And it's it's a narrative that I am
growing to understand, but essentially

that if stable coins help the US
dollar re remain the focal currency

in the world, that's a positive thing.

And I think to me, that's a better.

That's a better use case than
I've heard from other things

where people are thinking stable
coin is going to make sense.

And then earlier last week I was
listening to the FinTech Takes podcast.

A great podcast out there.

And there was a passing reference to
North Korea stealing 80, I don't know,

70 or $80 million of stablecoin from a
provider within like a seven hour window

where they hacked it and took it over
and now this money is in North Korea.

And I'm thinking I thought crypto and.

Stablecoin, we're supposed to be like
the most ultimately secure thing and

better than all the systems we got now.

And if you don't have that with
Stablecoin, what do you have?

I took a screenshot of that podcast.

I'm gonna go back and try and
research that for a future episode.

But that kind of didn't surprise
me, but it surprised me.

Mick Mac: Yeah, there's
two things I would say.

One is I have long thought.

Designed it this way, but it's, when
you look at the collateralization and

the requirement that it's supported
by treasuries you can back quickly

into an understanding that it creates
demand, albeit, artificial or real

demand for us treasuries, probably,
that otherwise wouldn't be there.

And that is a defense of the US dollar.

And that's probably not by accident.

Mark Treichel: Yeah.

Yeah.

It's,

Mick Mac: second thing is I've

Mark Treichel: always probably
got by accident that's, I'm glad

they're talking about it now is
'cause I was always trying to figure

out, so what does this really do?

If that's what it does, it's awesome.

Mick Mac: Yeah.

The second thing I would say is look
like every new innovation technology,

there's always a, a blow up.

Someone, we're going down the highway,
everything looks great, and someone

blows a flat tire and it is what it
is, and they'll be the poster boy.

And, then we will address it and,
understand it and fix it, repair

it and hopefully have a better,
smoother ride going forward.

But, look, it, it's being adopted quickly.

It's certainly got legs, and again, the
whole thing could come to a screeching

halt if we change administrations
and they change their view on it.

But, for now, you've got to understand
where you are in that ecosystem

and have a plan of some sort.

Mark Treichel: Sure.

And remember, there are no
blockbusters and there are no horses.

When you go outside, you're not
gonna see any horses and buggies

unless you're in in Pennsylvania.

Let's pivot to consolidations.

So consolidations continue.

We touched on that a little bit,
but there's a lot there to unpack.

Mick Mac: Yeah.

Look, we've talked about
how many are disappearing.

They're disappearing either,
mostly by consolidation.

The charts are crazy.

There's a few things you have
to understand in the background.

The first thing is, even with the numbers
that we have, even the good credit

unions, we're a little bit miscast.

One of the things that we're discovering
here is that the average age of a credit

union member is just simply too high.

It's sitting at 53 today.

The average age of a US
person is 38 and a half.

So we're aiming at.

Customers who are older, and that's not
per se bad except when you start getting

into the habits and whether they make a
good customer for a financial institution.

Baby boomers represent the largest
share of credit union members today.

They're about 39% of credit union members.

That's up from about
28% a year a decade ago.

And credit unions are falling
behind in new account openings.

If you asked respondents
in a recent survey, did you

open a new deposit account?

10% of those people opened it at
a credit union, and that's down

from about 16% a few years ago.

So what does it mean?

It means that the group that we're
facing are in the baby boomer

generation, and we talk about that
generation as being between 62 and 79.

Right now, 62 is important.

It's the age of retirement.

70 nine's important.

It's the age of life expectancy.

So if you're in that group, you're
not a great banking customer.

In reality because you're
drawing down savings.

You're not adding to savings, you're
giving away your savings to the next

generation, and they may be going
to a different financial institution

and you're not originating loans.

In terms of profitability, you're not a
great solution for credit unions today.

So the answer lies in finding
the younger customer who you

gain some lifetime value with.

And here the number is, are startling
because while we have a big advantage,

we're sitting on $2 trillion of
deposits in the credit union space.

Fintech's up to about 127 billion.

When we look at a group, a basket
of FinTech, it's SoFi, Robinhood,

Wealthfront, Coinbase, none of them have
massive deposits yet, but what's scary is

the way in which they gather deposits and
the competition and how it comes from.

So those names I gave you, SoFi
Robinhood Wealth Front, coin Base,

together, they have zero branches.

Credit unions together
have 20,000 branches.

It's gonna cost us a lot more money
to acquire members than it's gonna

cost a digital only alternative.

And let's look at the member growth.

The member growth in the credit
union space by mean is about

one point a half percent.

The digital composite that I just
gave you, those same group, 15% growth

last year on year member growth.

SoFi itself grew members by 38% last year.

Robinhood seven, wealth Front, 16.9

Coinbase, 10% numerical member growth.

The digital platform grew by 6.3.

Credit unions only by 2.4.

And then you start looking at that and you
say, okay, we've got a great head start,

but our acquisition costs are higher and
our growth prospects and are much slower.

So over time, I don't have to
be a genius in mathematics.

And again, I tell you the
laws of mathematics are laws.

They're not suggestions.

We're gonna get caught and we're
gonna get passed and it's only going

to accelerate short of knee capping
them, which I wouldn't recommend

and I don't think is street legal.

We've gotta up our own game.

We've really gotta start addressing
how do we face customers?

How do we gather customers, and that's
gonna get us, we're not there yet,

but I think later in this discussion,
we're gonna get to a bigness question.

We're gonna get to, am I right at facing
customers and potential customers,

members and potential members?

And if I'm not, how do I address that?

And can I do it by myself organically,
or is it gonna take something exogenous?

Mark Treichel: Thought
provoking a lot packed in there.

You mentioned Robinhood.

I think I heard that the Trump
accounts the thousand dollars that

kids are gonna get are gonna be.

I don't know if pigeonholes the right
way, but they're gonna be pushed towards

Robinhood, which is a I think there's, I,

Mick Mac: it's Robinhood and Bo,

Mark Treichel: what I

Mick Mac: think bank, I think Bank of
New York has a piece, but I think it's

Mark Treichel: Robinhood, you're right,
it is Bank of New York and Robinhood

together collectively are gonna one
one's the safe keeper or, what's

the term you write into those deals?

I think it's the safe keeper but Robin
Hood's growth is gonna be more than 7%.

If every kid gets an account,
oh, by the way, they're kids.

Those are the youth that
we're talking about.

And as you were talking about
that, I thought about another.

Stat I heard in a podcast where it
was a larger bank, had done some

analysis about what their members
were and where they were weak.

Where they were strong.

And when they got done looking at
it, they realized they had more

90 year olds than 19 year olds.

And that's not

Mick Mac: gonna last long.

Mark Treichel: Yeah.

Yeah.

Yeah.

That's not gonna last long.

'cause those 90 year olds
are 11 years beyond the.

The life expectancy already.

So

Mick Mac: 11 years of borrowed time.

Mark Treichel: I hear you right?

Yeah.

Yep.

Was it my pink Floyd said
shorter or shorter of breath,

and one day closer to death.

Okay.

That's a little macab, but
that gets into mergers, right?

Very good.

All right.

And consumer financial,
consumer protection remains

a steady underlying theme.

Mick Mac: Yeah.

Look, are customer consumer complaints and
inquiries, and there were a fine number,

I think they were 49,000 last year.

They, handled them well, at
least according to their own

annual report at the NCUA.

The bottom line is this is gonna be
de-emphasized and again it's probably

politics and this is a subject that
chairman Harper cared a lot about.

And Chairman Helpmann doesn't
care as much about right.

And I'm not saying he doesn't
care about it, I'm saying

it's not a point of emphasis.

And so what I wrote in the piece is, the
takeaway here is subtle but important.

The agency wants credit unions to
believe that the priority has not

diminished, but the allocation
of attention tells us otherwise.

So do it that with you will.

Mark Treichel: Yeah.

It's it has been deis regardless
of what they say there.

And it is the politics and, the, in my
mind, one of the things that happens

when that happens is the states can
still pursue what they wanna do.

And so the burden like with the CFPB
not being funded and them not being

able theoretically to do the mission
that they're charged with with them

doing less what happens in courts and
what happens in the individual states.

Can override and take the momentum.

And what I anticipate obviously would be
whenever there's a transition back to a

d is they'll jack up the funding of CFPB
and credit union exams will have more

consumer protection teeth to it, although,
they haven't, Harper had expanded on that.

NCA had never really pursued that
to the extent of the banks with

their separate with their separate
consumer compliance exams, et cetera.

All so next up, technology and
cybersecurity remain front and center.

Mick Mac: Yeah, not much to say here.

Obviously you've gotta keep
your cybersecurity PS and QS up.

These things are evolving.

AI and agentic AI make it even more
difficult, and we gotta continue to

make that fight, a fight that we win
every single day to protect our data,

to protect our customer's information.

One of the things I always find
interesting here is I think there

was some more jawboning about the NCA
wants and needs, the tools to go after

credit union service organizations.

Kusos funny because number
one, I don't think it's in the

political cards, and number two is.

It's really interesting that they're
asking for more to do at the same time

as they're extending the schedule of
exams at credit unions themselves.

So it's really be
careful what you ask for.

Stick to your knitting
and stay in your lane.

They're not gonna get that.

And I know they're not gonna get that.

Mark Treichel: And as I said, when I was
executive director to somebody who was

recommending, we put that on our agenda.

I said, I see what we're doing here.

If it blows up, we ask for it.

We know we're not gonna get it.

And then we can say, we told you 18
years in a row, we needed more authority.

And you're not gonna, you're not gonna.

And that's why it's there.

They know they're not gonna get it.

They gotta ask for it 'cause it's
a authority that if they had.

They might be able to do
something, might exactly.

Or might.

Very good.

All right the agency itself is changing
structurally and operationally.

Mick Mac: A couple of observations, as you
pointed out earlier, it's not technically

a reduction in force, but they had
about, right around a quarter of their

people take the plan and exit the agency.

That's, of course, going to have
knock-on effects on everything they do.

They've reallocated resources toward
technology and efficiency initiatives,

and kudos to them for doing that.

I think they've been pretty
good about that, honestly.

They continue to streamline
a lot of internal processes

and again, kudos for that.

More importantly, look let's
get myself in some trouble.

Chairman Halman has been a good soldier.

He's staying past his appointed time
because someone has to guide the agency.

He did point out at one point, if he
just left, it would be zero on the board.

I will tell you, I was down there
for a board hearing a few weeks ago.

It was very strange to be at a board table
where it was Chairman Halman, one glass

of water, one gavel, one chair, and then I
was on the other side of a massive table.

It was a very strange board meeting.

But there I was.

Look, former Chairman Harper is
entitled to his day in court.

He has a judiciable
claim and good for him.

I wish we could make an arrangement where
he probably started to understand all he

is gonna get if he won and I don't think
he's going to win, but all he would get

is a period victory anyway, because time
is pushing everybody's timing out anyway.

Again, the president is boxed.

I can see why he doesn't
wanna make his appointment.

But he probably should get on with
what he needs to do, whether it be

one appointment or three appointments
just to allow the agency to move.

Again, if you compare it to banking,
and we were at a banking conference

one of my colleagues and I about
a couple months ago in Arizona.

Banking, the message was clear.

The window is open.

We don't know how long it's gonna
be open, but do what you need to do,

whether it be a merger or it be a
reorganization or it'd be anything that

needs the permission of the agency.

We are not even there
yet because we've got.

By virtue of the reality of what
we have a lame duck leadership

that's doing its best but is boxed.

We have a president who's boxed on
his appointment and we're losing time.

We're losing that window whereby we
would have this win that our back

to do the things we need to do to
get in shape to right size and to

do some of the permissible activity.

We're by definition being slowed down and
that's unfortunate for the credit units.

Mark Treichel: All great points.

I was in charge of a reorganization at NCA
where we closed two regions, and I think,

I was proud of how we communicated it.

I was proud how we handled it with staff.

And I, at the time, I would always
refer people to a Machiavelli quote.

It's just not a person you want
to quote in theory very often.

But the quote was from the prince,
which was, it must be considered that

there's nothing more difficult to carry
out, nor more doubtful of success.

No more dangerous to handle than to
initiate a new order of things in bracket.

A reorg, yes, for the reformer has
the enemies in all those who profit

by the older order and lukewarm
defenders in those who gain.

And I can tell you.

I experienced some of that when
I led an NCA reorganization.

And I can tell you the rumblings out of
NCA is those that are losing aren't happy.

Those that are losing
are doing more with less.

Those who are gaining aren't happy.

And then when you layer on top of
it that they have not communicated

to the industry what they're
planning on do doing, and they are.

I don't wanna say hiding behind,
but they're saying we have

to negotiate with the union.

And now out of nowhere they say that
they're gonna finalize it in 2027.

So is that they really need to
finalize it in 2027 or they don't

want to talk about it now and
they want the next board to do it.

That's someone at n someone who left
NCUA who's talking to people at NCA.

Theory that to me, I don't know if
it's true or not, but I will tell you

the morale's challenge, any place that
goes down 27% is gonna be challenging.

Then when you're told this is
what the reorg is gonna be, and

then it never gets finalized.

And this might be an instance where
the union is doing some things.

I tend to think maybe not, but anyway,
alright, that I went down a rabbit hole.

You don't need to comment on
that, but you're more than

likely you can, if you'd like.

Mick Mac: The only thing I would say
is that hopefully we've improved from

the transition of Machiavelli to Machia
because I'm hoping that our reorganization

into Stifel goes a lot better.

Boom.

It's far so good.

Mark Treichel: Oh, that was perfect, man.

That's awesome.

Very good.

Very good.

Bigness, you, we let's talk
about, the law of large numbers.

Mick Mac: Yeah.

Here's where I, look again,
sometimes my job over here is to

deliver what my father would say.

Tough love.

And honestly, this comes from love.

It comes from a deep desire to protect the
overall franchise that is credit unions.

And we've gotta be smart about how
we allocate our collective resource.

And when I look at numbers, and we
do this every quarter, and Ryan, Mark

Martin in my office is the guy who
is, gets me screaming at 'em from the

minute they're out to get me all these
numbers fashioned, all kinds of ways.

What we try to do is we try to break
things down by tier group and so you

know, the under 100 million, the 100
to 500, however we decide to sort

them, we're sorting them by size
and the numbers are just staggering.

Mark.

I don't think people truly appreciate
like a few things to look at right

now in the credit union system.

If I were to just take the people who are
under 500 million of total assets, that

group of credit unions makes up 73% of
the count by institution, and collectively

they have 13% of the assets in the system.

So how does that express itself?

Number one is a regulator.

It makes it difficult, right?

Because now I have to send
resources all over the place.

The second thing, the 21 credit unions
that are in the $10 billion plus club,

they have 25% of the movement's assets.

So we've got to address this.

Now, here's the other thing.

Every single financial ratio
you look at improves with size.

So the opex at the under 100
million is a full point higher.

Than the bigger credit units.

The ROA is lower.

Here's one that you know,
the loan to share is lower.

This is the definition of
what you're supposed to do.

You are a credit union.

Your job is to extend
credit, and I understand why.

When you're smaller, you have to
have a margin of safety and you

can't lend as frequently or as much.

But we're at a 61% loan to
share on the under 100 million.

We're at 85% in the over 10 billion.

So what are we trying to
achieve in this movement?

We're trying to extend
credit to people who need it.

The better extender of credit is the
bigger credit union because all of

those efficiencies that come with
bigness, that come with the law of

large numbers that come with the
diversity of a bigger portfolio that

come with the spreading of costs over
a larger base of assets, that all

accrues to the benefit of more lending.

It also means a better
dividend for the members.

The dividend grows with size.

So it's just difficult to
reflexively defend the smaller

credit union time and time again.

I get it.

I love them.

We work with them all, but you've got
to be able to deliver value, and that

value has to be expressed in the numbers.

Then the value has to be in, am
I giving them better loan rate

or a better deposit rate to my
customers than the guy next door?

Whether the guy next door
would be bigger or smaller.

Because that's the competition.

And the guy next door, incidentally, is
not the credit union next door, it's the

credit union next door, it's the community
bank and it's Robinhood or SoFi or Chime.

That's the reality of
the bigness question.

Mark Treichel: Challenging time to
be a credit union, more challenging

to be a small credit union.

73% of the credit unions are
under 500 million, I think is what

you said, which is 13% and then.

Top 21 or twice that in percentage
that that pretty much says it all.

Mick Mac: It is, it's remarkable.

It's remarkable.

Mark Treichel: Any last thoughts as
it relates to, that's a great place to

end, but is there anything we wanted to
talk about here relative to the annual

report or anything else before we wrap?

Today's episode, Mike.

Mick Mac: No, again, the agency's
doing what it's supposed to do.

The report tells us that I think
they're emphasizing and hitting on

things that they think are important.

And, I think they're
pretty much square on.

We can argue at the fringes.

But again, I think from the outside,
whether it be the President or Chairman

Harper or Chairman Altman, somebody's
gotta figure that out to get the

next appointment in the chair and
to get us moving with some alacrity.

Mark Treichel: I like it.

I like it.

And if someone is listening and
they want to chat with you about.

How you all help credit unions?

What's the best way for them to reach out?

Mick Mac: For the next few days,
they can reach us at Olden Lane.

We have a website, www.oldenlane.com

that will remain functional
for a little while.

I'm certainly fairly prolific on
LinkedIn, although those rules will

probably change for me shortly.

And we're.

Dan Preso myself are pretty accessible
within the ecosystem of credit unions.

Mark Treichel: Very,

Mick Mac: We're looking forward to
the change that's coming for us.

And, we'll be back to you with
our new names and addresses.

Mark Treichel: That's right.

Yeah.

We gotta get those new email addresses
and and you're still gonna be in the

movement and you're gonna be able
to help more credit unions under the

new structure as I understand it.

So that's

Mick Mac: absolutely,

Mark Treichel: That's exciting.

All right, Mike thank you
for your time as always.

I enjoy chatting with you.

I hope your giants do
stupid things on Thursday.

Yeah,

Mick Mac: thanks Mark.

Mark Treichel: And and I hope my
Vikings hit it outta the park.

Mick Mac: Awesome.

Good luck.

Mark Treichel: Yep.

Thank Mike.

Thank you, sir.

Michael and listeners, I and watchers, I
wanna thank you for watching or listening.

I hope you'll do the same soon.

This is Mark TriCal signing
off with flying colors.