I was reading the July edition of the Callahan’s Credit Union Report and there on page 6 was a great credit union friend of mine, Diana Dykstra – CEO at San Francisco Fire Credit Union, with a piece she wrote on an idea she has – Member Capital Accounts. First, a little story about Diana one of the smartest and most innovative people I know in any industry. Eighteen years ago I was a young whipper-snapper just in my second year at the credit union and out of college. I was trying to learn all I could about consumer lending and Diana was frequently in the credit union trade publications with fresh ideas and talking about the success she was creating as the person in charge of lending at Golden 1 Credit Union. Well, I had an upcoming conference in San Jose that I was attending and not being the bashful type I called her up and asked if I could stop by for a visit to meet her and see what I could learn from her. I didn’t expect this busy executive and credit union icon to say “yes” to my request. Well, was I wrong. She said come on out and then proceeded to spend an entire day with me answering my every question. Wow, what an experience that I haven’t forgotten about to this day. She continues to amaze me with her leadership and her innovation. Now, back to the article and another great Diana idea – Member Capital Accounts.

I cannot summarize any better than how Diana put it so hopefully the Callahan’s people won’t mind me quoting a small section of the article in Diana’s words. “Here at San Francisco Fire Credit Unon we have begun to embark on a transformational journey. We want to put our members back in control of their credit union and one of the first steps is the creation of Member Capital Accounts. ...Every member of SF Fire CU will have a new share type established; it will be identified as a “Member Capital Account” within his or her individual membership. The balance of this account will grow by the member’s contribution to the credit union’s annual net income based on a capital allocation declared by the Board of Directors. The calculation is simple: First the Board of Directors declares the annual allocation to the Member Capital Accounts. Then add all interest paid on loans to dividends received on deposits; then calculate its percentage of the total of all member interest and dividends. This becomes the member’s percentage of the declared member capital allocation. Thus the more business the member does with the credit union, the greater the contribution to his or her capital account.”

Brilliant idea and I for one can’t wait to see it blossom. Diana will be at the symposium and I am sure she can provide additional details if you are interested.