At one time, there were over 24,000 credit unions. A large credit union was one that weighed in at or above $20 million in assets. Most were plain vanilla. How times and credit unions have changed. Before long the number of CUs will be less than 10,000, with 36 of those over $1 billion in assets and a high percentage of CUs full service. Many of the credit unions that have disappeared had much in common, including their attitudes towards change. Over the past 30 years, credit unions have discovered three basic ways to deal with change. Credit unions can choose to ignore it; or they can choose to fight it; or they can make a conscientious decision to embrace it. Not surprisingly, a high percentage of credit unions that are now history chose one or both of the first alternatives. The remaining credit unions, especially those that expect to continue to survive, chose the third alternative. Addressing these three views of change could make for an interesting session at a credit union's annual planning session. Volunteers and staff might be surprised to find out that they are not entirely in agreement with each other as to how their credit union and its leadership team feel about change and how they deal with it. The fact is that credit unions have a well-documented history of ignoring or fighting change rather than embracing it. Don't believe it? Here are some changes that credit unions at one time strongly resisted involving issues that are now taken for granted: * Share drafts. That's right, there were credit unions and national CU leaders who were adamantly opposed to credit unions getting into share drafts. "Checking accounts are for banks, not credit unions," was a cry frequently heard. "It'll never work. All my members already have checking accounts at a bank. Checking accounts are too much extra work." * Mortgages. When that battle first heated up, it seemed like some credit union officials firmly believed that, "God didn't intend for credit unions to do anything but payday, car, and debt consolidation loans." Big ticket loans, like for a member's dream house, should go to savings and loan associations because that's the business they are in. There was a feeling that such large loans would result in the credit union not being able to meet the demand for smaller, more traditional credit union loans. * Credit cards. Some credit union folks really had a tough time with this one. By issuing credit cards, they asked, weren't credit unions encouraging members to spend beyond their means and get into debt? And what about the higher interest rate? "Besides," claimed some naysayers, "we don't have the expertise to handle these things as good as banks can." * Risk-based lending. The argument, still going on in some circles, went like this: "All members should be treated equally. That's what makes a credit union a credit union. Risk-based lending violates credit union philosophy." * Indirect lending. See risk-based lending above. "Why should some members have to pay more because a dealer gets a kick back? Credit unions should not get into bed with car dealers because they can't be trusted," was not an uncommon comment. * ATMs. The current controversy revolving around ATMs concerns surcharging. At one time, the controversy was considerably more basic. The issue focused on whether or not credit unions could and should properly offer ATM service to members. Again, those opposed used the argument that this was simply not something credit unions should do. ATMs are for bank customers not credit union members. Besides, the logic at the time went, credit unions can't afford to purchase and maintain the machines like banks can. And the list goes on. Many credit unions also fought change involving drive-up facilities, debit cards, audio response systems, evening and weekend hours, CEO titles, employment agreements, and the need for full-time marketing and human resource professionals. Also, the corporate system, U.S. Central, CSG, select employee groups, community charters, modern facilities, branches, service centers, CUSOs, national share insurance, a host of technology advancements, and the creation of NCUA. And there are many more examples. Some would say that those days of resisting change are behind us. Really? Are today's credit unions ready to fully embrace, home banking, e-commerce, on-line originations, paperless board meetings, instant loan approval, new savings and investment instruments, state-of-the-art call centers, joint ventures, outsourcing, charter conversions, and much more? Looking back it is hard to imagine that there could have been so much resistance to things that have ultimately greatly benefited credit union members. Looking ahead, it is difficult to imagine if some credit unions will ever change for the benefit of members. So what is the greatest impediment to change in CUs? Some of the obvious answers include concerns for cost effectiveness, available expertise, uncertainty over member acceptance, and number one, fear of failure. On the other hand, resistance to change all too often boils down to the personal preferences or prejudice of credit union decision makers. In other words, if I as CEO or management staff or a CU policymaker don't personally embrace a particular change, then the chances of it being offered to members are pretty remote. I actually have heard credit union people say, "My members don't need to get mortgages (or whatever) from my credit union and they never will as long as I have anything to say about it." Note the use of the word "my" rather than "our." Can you imagine how such an individual will embrace the changes brought about by the Internet? Understanding change assumes that those in control can see the bigger picture, can focus on what business credit unions are really in, have the courage to take risks, can understand the consequences of ignoring or fighting change, and most important, are committed to doing what's best for members, not themselves.
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