Two Decades of Talking About the Elephant in the Room

Up until the mid-1980s it wasn't unusual for a credit union exec to be sitting across the desk from a legislator trying to argue the CU viewpoint, and the elected official would pull from a drawer some research study that claimed to not just show, but prove, the opposite point.

It didn't seem to matter that the study was sponsored by a bank trade group and came with all the try-to-keep-a-straight-face bias of its patron. Typical survey question to consumer: "Would you prefer a poke in the eye with a sharp stick when you enter a credit union branch, or a modest activity fee when entering a bank branch?" Typical bank-sponsored spin on the findings: "100% of consumers say they actually prefer bank fees over interacting with a credit union."

It wasn't a direct response to the above, but about that time some smart folks, led by then CUNA Mutual CEO Dick Heins, a former professor, decided credit unions could use their own academic-based, forward-looking research. And on May 31, 1989, the Filene Research Institute was founded.

The pioneers behind the Institute made another smart move: this wouldn't be a case of conclusions in search of findings. Instead, researchers were given independence to draw their own conclusions, even if it clashed with the desires and positions of its sponsors.

As it marks its 20th anniversary, the Filene Research Institute has published nearly 250 academic monographs, white papers, briefs and other documents using prominent researchers from academic institutions around the world.

Over its life Filene has also evolved, in part to address a critical shortcoming in all types of research: the lack of suggestions or guidance on how to apply it. The Institute has taken to heart a quote from its namesake, CU pioneer Ed Filene: "Progress is the constant replacing of the best there is with something better still."

"I think for the first 10 or 12 years the Institute was really grounded in the think tank role," observed Filene Executive Director Mark Meyer. "For the last five to eight years it has really become, as we like to say, a 'Think & Do Tank.' We still do the macro-level policy and operational research, but we also now focus on ways to apply the research and lead to other creative ideas."

To research its research, Meyer said Filene has turned to the Filene Fellows (the academics with whom it works and whom Meyer credited for bringing an outside perspective), its own board, and its Research Council for direction.

"All of them help us to identify pain points for consumers and member behavior that might need research," Meyer said. "We also look at outside trends and all the indicators for the potential need for research."

Two-and-a-half-years into leading the Institute Meyer said he is "extraordinarily surprised at the increasing complexity of what is happening in financial services and at the value of good research and perspective and new ideas. My sense is financial services is going through a reinvention, and consumers need direction."

Looking back, Meyer credits "Doc" Heins for being the Institute's architect, and Dave Chatfield (who did a year at Filene as its first exec director) for "inaugurating the brand" before moving on to the California league. (I still recall Chatfield sharing the fact the Institute's organizers had gotten permission from Filene's family before using the name.) He also noted the prominent role played by former director Bob Hoel, who created its "sustainable model."

During its life the Institute has produced numerous notable pieces of research, including a 1993 work on "Field of Membership: An Evolving Concept," that was distributed on Capitol Hill and which helped lay the groundwork for 1998's CU Membership Access Act. It published an independent analysis on the "Taxation of Credit Unions" and what it would mean to both CUs and the U.S. Treasury.

In Meyer's words it has "taken a lot of courage" for credit unions to continue to sponsor Filene, even though its findings are not always what the folks paying the tab wanted. "We give our researchers wide latitude," Meyer said. "It's why we've been able to get the calibre of researchers we've gotten. A lot of times our research has been critical of credit unions and credit union policies. We've talked about the elephant in the room."

As it enters its third decade, Meyer notes it does so at an interesting time in the economic environment. "We're seeing likely changes in financial services and likely sustainable changes in consumer behavior," Meyer said. "That has caused Filene to evaluate its role. Is it still the macro-level? Or is it an evolution in our breadth? We increasingly hear, 'The research is terrific, but help us to apply it.'"

To that end Filene has introduced in recent years REAL Solutions, its i3 Group and its CU Tomorrow project (for young leaders). You can learn more about all of them at filene.org.

As for what does the next 20 years hold, who knows? Perhaps someone will research it.

Frank J. Diekmann can be reached at fdiekmann@cujournal.com.