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In the 1941 classic “Citizen Kane,” Charles Foster Kane (played brilliantly by Orson Welles) describes business and entrepreneurship in his own way by remarking, “You’re right, I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars next year. You know, Mr. Thatcher, at a rate of a million dollars a year, I’ll have to close this place in…60 years.”

Most small businesses, and even some large businesses, can’t afford to lose a million dollars a year. I’ve been fortunate enough to meet some of the brightest entrepreneurs in the Bay Area. A few of them are tech whizzes at Silicon Valley startups, but most of them run companies we may take for granted, like office furniture installers, real estate development, and sporting goods.

Entrepreneurs are risk takers, don’t always follow the status quo, and are willing to fail and start over again. In fact, most successful business owners have failed earlier in their careers. The lessons they learned in failure forced them to create something better than before.

As we have learned, entrepreneurs solve everyday problems. Alexander Graham Bell is credited with inventing the first practical telephone which revolutionized communication. Steve Jobs took the telephone to a whole new level by combining it with computer technology to create the hand-held marvels almost all of us walk around with these days.

The one thing that stops entrepreneurs in their tracks is government intervention. This is something that credit unions have to deal with on a daily basis and that stifles management from making the banking experience more relevant and easier for average consumers. In the last five years, over a thousand credit unions have either been acquired or have failed. Some of these institutions have disappeared due to excessive credit risk; in other words, making bad loans. But many of the smaller credit unions have faded away under the tremendous weight of rules and regulations.

The Great Recession earlier in the decade exposed the largest banks as taking excessive risk to appease their stockholders. Congress passed a series of laws to regulate these banks’ activities, but those restrictions trickled down to credit unions that did not cause any of the problems the laws were intending to fix. This led to many credit unions becoming unprofitable, leading to either extinction or taking extreme steps to stay profitable, such as increasing fees or making riskier loans.

1st Nor Cal’s management has always had an entrepreneurial bent so that our members can be better served. Government regulations inhibit those kinds of creative solutions to members with financial issues. I pledge we will continue to do our best to give 1st Nor Cal members products and services they want and need.

The fictional Charles Foster Kane, whom many believe was based on publishing tycoon William Randolph Hearst, was brought to life by Senator Everett Dirksen who famously said, “A billion here, a billion there, pretty soon you’re talking about real money.” At the Credit Union, it will always be a dollar here and a dollar there.

David M. Green
(925) 335-3802