World Council of Credit Unions President/CEO Pete Crear sat downwith Credit Union Times Editor-in-Chief Sarah Snell Cookejust prior to flying off for his association's last annualconference before his retirement. While Crear was shy about naminga date for his departure, he did share his thoughts with us on theglobal trends that will come to face U.S. credit unions, includingthe greatest threats. Click here to watch the video.

Sarah Snell Cooke: Welcome, we're heretoday with Pete Crear, retiring CEO of the World Council of CreditUnions. How are you doing today?

Pete Crear: I'm doing great,Sarah.

Cooke: Do you have a countdown goingyet?

Crear: I'm not going to give the days.You know there are all kinds of iPhone apps, and there's acountdown iPhone app. And when I'm sitting not really doinganything I click on it and go “Oh, yeah.”

Cooke: And your wife, too, probably.Now is this going to be a “real retirement” because I know youretired from CUNA once before. And I know you folks from Wisconsinhave a problem with retiring. Is this a real retirement?

Crear: It is a real retirement, forsure. I know you're referring to Brett Favre. I'm doing this for acouple of reasons. One is that Mrs. Crear says that I am retiring,and if Brett Favre would have called her, he'd have retired thefirst time. And secondly, I know I'm retiring because I've just hadenough of travel. Just not having to go to the airport anytime soonis very encouraging to me.

Cooke: Now you have one more big tripleft coming up–Scotland.

Crear: Yep, Scotland's going to be alot of fun. We're going to have a big party. It's our 40thanniversary as you know, so we're going to have a big party forthat and a big party for my retirement. Hopefully everybody willget their fill of…cake. So 1,600 people are going to show up inScotland

Cooke: For your retirement!

Crear: Yes, for my retirement, and Itell people, that's more than Oprah got. Let's put this inperspective.

Cooke: So what are you going to dowith your free time?

Crear: Believe it or not in my freetime I'm going to make a plan because I don't have a plan at thispoint other than to do nothing. Now that won't last very long, butcertainly I think left to my own devices, I won't have to sneak offto play golf. I'll just say, “I'm going to play golf. Bye.” Andthat will fill a considerable amount of my time. And I would reallylike to see my house in daylight again.

Cooke: So you've been in credit unionsfor, well let's just say decades.

Crear: Yes, very, very long time.

Cooke: What have been the biggestchanges and the most exciting and interesting times for you?

Crear: Every time I decide that,something else comes along and I re-decide that. There have been somany changes that are just great. I came into this business wheneverything was done by hand, if that tells you something. Wethought a Postronic machine that could read the stripe on the backof a ledger card was exciting stuff. That was a big leap forward intechnology and some of these credit unions were large enough thatthey would put these things in these big bins and the sellers ofthis equipment would sell you a bin the length of this table, andthey stuck all the ledger cards in. They'd turn this machine on andleave it on all night and all day because sometimes it would takeas much as three days to run all the balances, but each one ofthose cards would be read and the balance would be spit out andprinted. And then the next week we would sit around and try tobalance those. But that was a big leap forward. Of course, dataprocessing came forward and changed all that. I look at it todayand think how easy all this stuff is in contrast. Easy stuff.

There's a commercial that's on. There's a couple guys sittingaround a machine, and they're talking about all the great things itcan do. One guy looks up and says, “Oh look, an elder.” And the guywalks up, and he's about 27 years old, and he says, “You're allsoft”. This is a guy who's familiar with floppy disks, but that'sthe era in which I've come from.

But that's just one side of this. The other side is theregulatory piece. I was with my chairman, Barry Jolette, and Barryand I were reminiscing about the old BFCU, the Bureau of FederalCredit Unions that he came from, the predecessor of NCUA. Theiroperations today don't look anything like the old bureau'soperations of the '60s and '70s.

A lot of things have changed and changed for the better to beperfectly honest. I really like this new form of volunteer; we'regetting a lot more energy, a lot more interesting in terms of thedimensions that they bring. Exciting times for credit unions. And Ihope credit unions always continue to change because I thinkstanding still is just waiting for a train wreck.

Cooke: Now that you've gotten a globalperspective over the last five years, talk about some of thelessons that some of the U.S. credit unions could take away fromwhat you've learned.

Crear: If there's one or two lessonswe've learned. One, almost everything will work if you believe itwill help your members. And we've seen some really peculiar thingsin various places, various cultures. Not to be critical: The factis that these are necessary. They're wanted.

Cooke: Can you give us an example?

Crear: Yeah, some of the stuff we seein Afghanistan, for example. This is a culture that doesn't embracemoney lenders. The fact is banks and other financial institutionsjust aren't welcome because it rubs up against the culture of thatsociety. To be able to develop 30 credit unions speaks volumesabout the importance of having these. But working around the laws–Iguess not working around them but within the law and complying withthe law, being innovative.

Secondly, the big deal breaker: involving women. This is aculture that doesn't do that either and essentially we said we'renot going to work with you unless you do that. And ultimately theysaid, “You know what, it's more important to have the credit unionsthan to keep this intact by keeping women out.” So all of thosecredit unions have women involved as members and employees and onthe board.

So, being innovative. If you had asked me this question 10 yearsago, I'd have said “Absolutely not. We'll never start credit unionsin those types of cultures. It just won't work.” You can just lookat them on the surface and you can see things are different. Thingsare changing. I like to tell people that you could have taken allof my library money and bet there would be a credit union movementin Russia, and I'd have said, “Not a chance. No way. Thatgovernment is never going to step aside and let that happen.” Todaythere are  five, and they're relatively small. Democracywas not the thing that would have been very attractive 10 years agothere and today it is an exciting underpinning for a growing,budding movement that's coming into existence there.

So those are examples of the kinds of things we see on anongoing basis that are so different and so innovative and socreative and so necessary to the viability of credit unions.

Cooke: How has your view changed?

Crear: Somebody asked me that questionrecently and one of the things that over time I can now put nameswith faces in the public eye in the international arena. So you canimagine working at CUNA when the term G20 came up, I'd yawn and goback to my nap. Now if somebody says the G20, “Well whoa, wait aminute. Who? What?” Because I've got to know what the heck happenedbecause it's important for us to know what the heck they'rethinking and who's thinking it because it has an impact on theoperation of our credit unions around the globe that I reallydidn't pay much attention to. But again, today we can really putnames with faces with these people and we know exactly what they'redoing and how they're doing it.

You know, there's a great learning lesson in the European Union,particularly in Parliament. Not many people understand or knowanything about credit unions. And in working with those groups andtrying to explain to them, “these rules and laws, did you reallywant to do that, because there's this group of credit unions and ithas an impact on them.” And they go “Really? So, how many arethere?” and we talk about the numbers and that's when we begin toget the kind of respect that we get in other places around theglobe that are familiar with credit unions, so very intriguing someof these new groups we work with.

And, with some of these things that I've learned over just thelast five years is that credit unions, one, are the same the worldover. Two, everybody's focused on the same thing and that's themember and the needs of those members. The good news for us is the“people helping people” slogan is a good slogan. Everybody doesn'tuse it, but boy I'm telling you it's a growing slogan around theglobe.

Cooke: Do you have a favoritesystem?

Crear: Yeah,  I've got acouple favorite systems. Not long ago someone told me, “Well,Poland was your poster child, wasn't it?” And the answer is, I haveto admit to it, yes, it is because I hold Poland out at a greatexample of what you can do in a very short period of time. InPoland, the system is only about 15 years old. Came from almostnothing. When they went through the revolution there and spent allthose years fighting, their system truly, truly got rubbed out, andwithin just a few years it was back, it was up and it was runningand it was better than it was before. And they've got a group ofdynamic leaders. They made all the right moves, did all the rightthings. So Poland has become the go-to example for me around theworld. I tell a lot of stories about Poland and their contributionto their membership, just 63 credit unions but 1,600-plus branches.They're all networked together so if you walk in anywhere in thecountry, it's just like your credit union. Secondly, theircontribution both to their community and to their country—I saycountry. I didn't make a mistake when I said that. I was at one oftheir meetings not terribly long ago and they had just reopened thecathedral there in Warsaw and they were there with the archbishopand one of the things that happened was Grzegorz Bierecki, who isthe president of the Polish movement, gave the archbishop three orfour tubes. Just white mailing tubes and afterwards I asked him,Grzegorz, what was that. And he said oh those were maps. Well ofcourse I thought maps. Why would you give the archbishop maps? Andhe said well, they were maps of the original boundary of Poland.O.K., I'm curious. Why is that important? And he said, “After thefighting stopped the boundary lines, the new borders of Poland werere-drawn by the Russians. And of course when they redrew them theykind of were very cavalier in the re-drawing. All the official mapshave been destroyed–all the official maps have been destroyed sothere was not much argument we could mount to stop this fromhappening. Their incursion was sometimes 20-30 miles inside Poland,but many of the credit unions who operated inside the border haddetailed maps of where families lived and the people they servedand they were meticulously drawn and kept up to date. We asked ifthey'd send those to us and that's what they did and that's whatthose are. We submitted those to the country when they werere-drawing the boundaries and that's how the boundaries werere-drawn, using those maps.” I thought wow what a contribution.What a big contribution this group of credit unions.

But Poland is just one of my favorite.

And Australia is another of those as well. I just love theirattitude: Let's just do it. Let's not look for reasons, let's justget in there and do it. We'll fix it on the fly. I love that. Ijust love that.

Cooke: So what emerging trends haveyou seen globally that are going to affect credit unions here?

Crear: One of the things we watchclosely is that a law that is passed almost anywhere in the worldmakes its way around the globe. Whether it ends up in your countrydoesn't make a difference, but it does get looked at and it doesget considered so even bad law has to be taken seriously. In fact,bad law has to be taken very, very seriously and hopefully we stopit before it gets enacted.

But the fact is I think some of the trends that are coming forus having to do with agencies we don't do much business with.Basel, which has been kind of on the outside for us in the U.S.Many of the large banks are very, very familiar with Basel.Certainly the regulatory agencies are familiar. This is the groupthat looks at risk and decides how best to mitigate risk throughreserves as well as actions that can be taken before accepting therisk. Credit unions are becoming more and more under that provisionthat we aren't now. Australia and a couple places in Latin Americaright now are the only places that currently are under Basel. Mysense is as that agency gets more traction as we work more and moreout of this financial crisis that we've got, that we will see Baselin some other places, probably a good chance we'll have a real gooddebate about Basel here in the U.S. and that will have implicationsfor credit unions in a fashion that they don't normally see. Willit be negative? Well, hopefully not but you never know. We've gotthe NCUA who has pretty much set risk weighting and the way wetreat risk and how we reserve for it. Now comes an internationalagency that does it. That's one of the things that we're very muchaware of and very much looking to make sure that if it does happen,we're in from the beginning. We get an opportunity to make sureit's shaped in a fashion that doesn't have a negative impact onus.

I think from an operational standpoint one of the things that wesee, there's a lot of exchanges taking place. Credit unions aren'twaiting for the World Council. They're not waiting for CUNA.They're not waiting for the Canadian credit unionmovement  to kind of put them together with their peers.The Internet's made that very possible. So we see that takingplace: People having Internet conversations or virtualconversations that will soon turn into eyeball-to-eyeball. And welike that. It's really encouraging. There's never one of thosethat's taken place yet in which both sides haven't benefited fromjust being able to talk to somebody engaged in the same thing theyare in a different place. It does tend to put things inperspective.

Cooke: do you think that's a threat tothe trade associations?

Crear: I don't think so. I reallydon't. I think it's just another one of those great tools that onlycredit unions could have. You just wouldn't see this in a bank. Youwouldn't see this anywhere else. I think there's a genuine interestin what you're doing and what someone else is doing and how we canlearn from each other. When you ask the question at the end of theconversation, 'how did you guys deal with [fill in the blank]?'What you may find, in some places it's not as evolved as you'd likebut that doesn't mean anything because those are groups that areusing technology better than we are because they don't have to getrid of old legacy systems. They can just step right into whatexists today, so a lot of countries in World Council have PDAs, theapplication of technology in very, very creative ways is just theeasiest stuff on earth to do because there's no barriers to takedown.

And secondly, the government often says this is how we're goingto do it and everybody says O.K., and that's the end of that. PDAusage today in the U.S., you can almost name the credit unions thatuse that technology. We've got one we're working with in VenturaCounty in California who serve migrant workers. I think you knowmigrant workers get paid based on the amount of crop they pick eachday. And so to leave the job to go to the credit union really takesmoney out of their pocket. It's like being paid on an hourly basisand having to take several hours to go transact at your creditunion. So having PDA application just means you can take it rightto the field, so if somebody wants to do something, you walk up tothem in the bean field and you say “Manuel I understand you want tomake a withdrawal, make a payment on your loan and get someinformation about whatever.” He says, “Yeah,”  and withinfive or 10 minutes you're done. He hasn't had to travel anywhere,stand in line, travel back. That transaction's taken care of, butthe credit union's really growing in membership at this pointbecause people are interested in using that type of technology. Weuse it all the time in Ecuador, in Mexico, in Kenya, places youwouldn't think of as bastion of great technology usage, but this iseasy stuff.

Cooke: When there's no otheralternative, that's the ultimate of serving your members: Going outto them.

Crear: Precisely.

Cooke: What do you see as the biggestthreat to credit unions?

Crear: There's always threats. I thinkthe biggest threat to credit unions right now is I guess interest.Maybe I'm not saying this in the best fashion. I think it's easy toget off focus from a volunteer's standpoint and so I worry thatwhen we work with our volunteers, given the messages that we'vebeen sending, the explanations we've had to make over the lastprobably couple of years, it just has to be one of the mostconfusing things on earth. And in some cases very discouraging forthem. So attracting and retaining volunteers has to be a tough,tough, tough job for credit unions and will be a tough job goingforward for credit unions. A lot of that is just based on where weare in our environment and what's going on in our environment. Ithink in the near term, the next five to seven years, getting andretaining good volunteers will be very, very tough. Very difficult.You know and I know, volunteers are the backbone of this business.It's the backbone of what we do. It separates us from the others.Getting good, solid individuals in the trenches will be a prettytime-intensive effort on a lot of credit unions but I see that as amajor challenge throughout not just the U.S. but throughout theworld of finding the right folks. Some of the people we meet insome of the people in the places we go, they're just fun people.You can meet the most passionate people on earth today and tomorrowyou meet another group that's more passionate. Just unbelievable.That's what you like to see. That's what you want to see becausethat's what will propel us. That's what will keep us on focus.That's what keeps us from being discouraged. That's what gets uspast the near term. So volunteers are really important and to findthe right ones to do the heavy lifting.

Cooke: As the NCUA's pointed out, youdon't want just anybody on a credit union board. I'm sure it's thesame around the globe.

Crear: And rightfully so. Having awarm body–that's not very beneficial to anybody. And sometimes tobecome be something other than just a warm body takes a couple ofyears to learn and absorb and see what's happening, but typicallygood common sense coupled with the right amount of passion is justabout all we need.

Cooke: Where would you like to seecredit unions leave their mark?

Crear: Where would I like to see themleave their mark? I'd like to see them markup everything. I don'twant much.

For me, what I'd like to see credit union do in a very shortperiod of time and they're not really doing is to mount a campaignand separate themselves from other financial institutions. You cancharacterize that as a marketing campaign or it can be somethingelse but I don't know what that something else might be. But I dobelieve it's needed. I do believe it's necessary. I do believe thatevery credit union has to participate in it to make it work. Is ittough to do? Yeah it is and we've demonstrated that because we'vewalked around the edges of it. Just think if we didn't have tospend our time walking around the edges and really doing something.Dan Mica used to always say boy it takes a lot of money. Well we'vegot a lot of money. If everybody participates just a little, just alittle, we've got enough money. That's not an excuse. That is notan excuse. I look at places like Australia for example who've cometo the same conclusion. Now they've only got about 130 creditunions so it's a little easier for them to do than a place like theU.S. with 7,000 credit unions. But the fact is that if you don't doit the results are so bad and so discouraging so what's your No. 2choice. Keep in mind we're looking for young people. We're lookingfor young people become and be involved and engaged in themovement. Well you're going to have to tell them about creditunions, that's bad news guys. It's good news because you can dothat.

Secondly you have to get the age down—the average age down fromwhere it's at to put back into place the borrowers credit unionsgrew on in the '60s, '70s, '80s, '90s and when you do that, againyou've got to tell them because there's no way for them to knowotherwise. So it's very important that take place and have it takeplace in a country this size is very complex, very difficult butnonetheless necessary and very necessary. In Canada, this is one ofthe things they've looked at very carefully and concluded prettymuch at this point that they're going to have to do something.Canada's probably the second largest developed movement with 1,000credit unions between the two groups between the French speakingand the English speaking. It's certainly necessary to put in frontof the public the mission, the vision, the history, thecontributions of credit unions for the public to make a decisionabout. We got a great story to tell. I mean a lot of great storiesto tell and a lot of great examples to point to, and we just keepthem bottled up. I was at a meeting not long ago and somebody wassaying we do a lot of talking to each other and we nod and say,“Yeah, that's what we need to do. But, gee guys, we've got to quittalking to each other.”

Cooke: Do you have anything you'd liketo add?

Crear: If there's anything I'd like tosay in leaving World Council and slipping off into the next phaseof my life is the thing I'd wish credit unions 1) continuedsuccess, continued growth and 2) I would hope that credit unionswould do the one thing that I think will make the difference goingforward and that is to cooperate on more things in the future thanthey are today and that's possible. I continue to say that becauseI continue to believe that–that through cooperation we can movethings and we can change things and make things different, betterand I think credit unions will discover that. That's my wish andthat's my message.