The Hallmark Illusion: Holiday Sentimentality Can’t Fix a Broken Movement

By Ed Speed

Tony’s Hernandez’ holiday message in the CU Daily aims to inspire unity and goodwill across the credit union movement.  It has the sentimental texture of a Hallmark movie.  All it’s missing is the requisite golden retriever to make the emotional manipulation feel complete.

At its core, this well-meaning essay by a highly respected insider reveals a deeper dangerous psychology: the continuing infantilization of small credit unions. The big players and their trades talk at smaller institutions rather than walk with them, presenting themselves as benevolent guardians of our movement, while expecting smaller CUs to remain deferential and grateful. This dynamic creates insidious co-dependency:

• “Don’t make trouble, it harms unity.”
• Taxing us will hurt you!

This isn’t unity. It’s the soft coercion of paternalism; an expression of care used as a mechanism of control in abusive relationships.

The essay’s invocation of “gratitude, kindness, and shared purpose” sets a sweet, sentimental tone, but it collapses the moment the message begins preaching unity without naming the real source of fracture and fragmentation.  When truth is embraced, reconciliation and unity have a chance.

Our movement has not been fractured by small credit unions. It has not been fragmented by local institutions trying to survive. It has not been destabilized by those serving real human communities.

Ours is not a movement broken from below, it is a movement corroded from above; torn apart by executives who quietly sell out their members, negotiate their own payouts and then present mergers as a benevolent act of stewardship.

The Great Extraction: Turning Member Value into Executive Wealth

The credit union movement is being hollowed out by leaders who have discovered they can privatize member-owned value into personal wealth.

Small credit unions can see there are credit unions that:

• Preach cooperation while pursuing conquests
• Invoke “unity” while consuming smaller CUs and dominating their markets to bludgeon them into submission
• Praise “shared values” while cashing change-in-control check
• Claim “member benefit” while extracting millions in capital from institutions that once belonged to their communities

Unity Not Possible When One Side is Gutting the Other

The rhetoric Tony offers, soft and glowing, is a candlelit hymn sung over the sound of quiet looting. The message hums a carol of holiday fellowship and unity, while the actual system runs on scale-driven predation combined with trade and regulatory leadership-sanctioned asset diversion.   Chip Filson has documented this at length.

The writing appeals to nostalgia yet fails to define what today’s shared purpose is. This is a sermon in search of a sin.

People Helping People — Not People Exploiting People

The narrative of “people helping people” is invoked like sacred scripture, but it directly clashes with present-day behavior:

• Executives extracting seven-figure compensation plus lottery win-sized merger payouts
• Trade associations jockeying for influence and political leverage
• The looting and evaporation of a blue-collar community’s legacy capital, 

None of this is acknowledged. The essay tries to leapfrog reality by appealing to sentiment instead of confronting institutional drift and grift.

When “Differences in Size” Really Means “Know Your Place.”

The “Internal Frictions” section is a masterclass in euphemism. What the writer calls “fragmentation” is power consolidation at the top.  What he calls “differences between asset sizes” is dominance by the credit union giants. What he calls “reaching across divides” is a polite expectation that smaller institutions accept the leadership, agenda, and worldview of the larger ones, while pretending the relationship is reciprocal.

Unity Without Transparency Is Manipulation

Then comes the self-promotion of the altar call pledge of “commitment to unity.” But if the organization truly believes in unity, why did it fight transparency, the prerequisite for trust and unity?

When  Universal 990 transparency was proposed, the one reform that would finally put excess pay, exit payouts, merger bonuses, compensation alignments, and vendor entanglements into full public view earlier this year, DCUC trotted out the same regulatory-burden refrain.  Be honest: the real fear wasn’t compliance paperwork. The real fear was illumination. Universal 990 disclosure would drag into the light the true costs of executive compensation and consolidation, exposing how much “member-owned value” has been siphoned upward into private pockets. 

DCUC understood that such revelations would expose the emptiness of the carefully curated narrative of unity, sacrifice, and shared mission, so they worked to keep that curtain tightly drawn.

You Got That Right, Sparky: Tax Exemption Dies When You Stop Behaving Like Cooperatives

We are also sternly warned that if too few credit unions remain, the tax-exemption rationale evaporates. Tony writes, “For instance, if we ever woke up to find only a handful of mega–credit unions remaining, ‘the rationale for our tax benefits’ would quickly erode under billion-dollar balance sheets.”     It is telling that it is only in the paragraph about taxation where any concern about the “movement’s legitimacy” is important.  The tax issue seems to be the primary reason for the entire essay. 

Giant CUs Biggest Fear: Losing Their Moral Camouflage and Tax Advantage

Underneath all this holiday messaging, the soft tone, the sentimental language, and the paternal cooing, there is a deeper, visceral fear driving the unity rhetoric from DCUC, ACU and the large credit unions.

They are terrified that small credit unions will walk off the advocacy playing field or, even worse, turn on them.  Why the fear?  Because small credit unions are the only moral camouflage that big credit unions can use to justify their tax exemption.

It is the $40-million shops with volunteer boards, tight fields of membership, modest CEO salaries, local mission, and community roots that provide the ethical narrative and shelter when tax status is challenged.

The true financial beneficiaries of that moral high ground are the giants. Tony is correct: when the small credit unions stop giving the giants moral credibility for the tax fight, the tax-exemption argument collapses.  The large credit unions know it. It scares the hell out of them. 

What if small-credit-union CEOs, with finance and accounting degrees, and occasional  MBAs on their boards were to sit down, run the numbers, and discover that a 20–25% effective tax rate would not meaningfully restrict their operations or pricing, beyond modestly slowing growth?   The only result of taxation is that you put 75 cents into retained earnings, rather than a dollar.  Nothing else changes.  You don’t lose your credit union soul or abandon your vocation.  

‘Stop Loading the Gun’

Likewise, what happens when small credit unions realize large credit unions are using the small credit unions’ moral legitimacy to amass merger war chests that they will use to consume small credit unions or dominate, if not outright destroy,  smaller credit union markets to drive them into mergers.    Stop loading the gun that will be used to execute you. 

When small credit unions wake up and realize: “A 25% tax on our net income will be an inconvenience for us, but it will be a disaster the giant CUs,” the world is turned upside down. 

Large credit unions don’t fear taxation for unifying, movement-loving ideological reasons.  They fear it for mathematical ones.

This is why they infantilize the smaller institutions:

The invitation to gratitude, kindness, and shared purpose, really means;  

• “We need your moral legitimacy, but don’t question our behavior.”
• “Give us your heart-tugging public stories, but not your public criticism.”
• You provide the tax cover, but we keep all the benefits, and  use the tax savings against you.

When the Movement Is Built on Truth, the Giants Lose Their Leverage

Suddenly the “movement” stops being a hostage to the growth obsession of billion-dollar institutions and becomes a coalition of real cooperatives that can stand on their own, with or without Uncle Sam’s tax subsidy.   

The ultimate unspoken fear of the large-CU leadership class and the trades is that small credit unions might realize they don’t need the big ones, but the big ones absolutely need the small ones for political cover to keep hundreds of millions of dollars in tax savings every year.

No Altar Calls Please:  Taking a Pledge? Try Taking Responsibility.

The “Making & Taking a Pledge” section collapses into pure abstraction. This pledge is sentimental performance art, not leadership. The message wraps itself in holiday language to mask a hard truth: it supports unity only when unity means obedience to the largest institutions. It calls for cooperation while opposing transparency, preaches “mission over ego” while shielding disclosure fr executive compensation and merger payouts, and speaks of partnership while treating small credit unions as childlike followers. This isn’t cooperative solidarity, it’s emotional manipulation. 

Small credit unions are expected to supply moral legitimacy, political cover, and tax-exemption optics, while the giants take the power, the scale, and keep the financial rewards. 

If You’re Going to Cast a Sentimental Holiday Movie, At Least Get the Script Right

Small credit unions don’t need Christmas-card comfort phrases. They need honesty. They need respect. They need transparency. And they deserve a real seat at the table along with a financial share of the tax-saving benefits that their moral legitimacy provides to the movement.

Let’s be blunt: It is small credit union cooperative credibility, not the behavior of the mega–CUs, that sustains the tax-exemption argument. If you’re going to shelter hundreds of millions of dollars of net income from taxation to buy banks, loot smaller credit unions through mergers and dominate their markets, then no small credit union should be scraping together donations to update a  website or have to beg or pray for a core system discount.  Read Joshau Urbick in The CU Daily.

Sentimentality will not save the credit union movement; certainly not Hallmark movie sentiments from the powerful to the powerless.

If you want peace and unity-messaged holiday film, you need a dog –  that hunts.

Edward Speed is the retired CEO of a multi-billion-dollar credit union and holds a master’s degree in theology. These days, he spends his time serving food, washing dishes, and sweeping floors at a Catholic Worker House, helping homeless senior citizens. email: [email protected]