Cooperation and competition can co-exist
There has been some recent discussion in credit union circles on whether or not credit unions can both cooperate and compete.
The NCUA Chairman made it clear in a recent speech that in his opinion the two absolutely could not co-exist among credit unions. There are probably some who would agree with his assessment. I am not one of them.
Credit unions and the groups that represent them have always found ways to cooperate and compete with each other. They still do today. Whenever credit union people get together, they not only stand up to tell the assembled masses what they did right, frequently they use the forum to describe in detail mistakes they made.
One of the most popular sessions at credit union conferences over the years, and still today, is a free-wheeling, completely informal session with no formal program, no speakers, no A-V, and no restrictions on what subjects can be brought up for group discussion.
These open forum sessions are always lively, informative, and almost always run over the time set aside for them. Participants rate them highly because the format affords participants the chance to learn from their peers who in a growing number of instances, may also be their competitors.
Then there are credit union associations like CUNA, NAFCU, NASCUS, CUES, state leagues, and dozens more. They find countless ways to compete and at the same time cooperate. That shouldn't be surprising.
Among associations in general, credit union groups are not unique. Thousands of associations, serving every industry and profession imaginable, both compete and cooperate, as do their members, on a daily basis.
By its very definition, an association or trade group, or professional society, is the coming together (a.k.a. cooperation) of competitors for the common good of the industry they represent. Are not various credit unions in a CUNA or NAFCU audience competitors? Sure, but do they not belong to those associations so that they can cooperate within the group as well as foster that cooperation between the two groups for something like H.R. 1151?
Look at it from a non-credit union perspective for a moment. Rival trucking companies come together under the umbrella of the American Trucking Association to find ways to benefit the entire trucking industry, such as legislation to increase the allowable length of semi trailers or the time drivers can spend behind the wheel.
Another example: It is doubtful that any entities compete more fiercely than automobile dealerships. Yet, there is an automobile dealers association in every state and metropolitan area. It is well-known that car dealers will do anything to get a sale away from each other, but they also know the value of working together on compliance issues, for example, that affect each and every one of them.
There are thousands of such examples. Associations need to compete and cooperate as do their members. It's no different in the world of credit unions!
There are areas in this country where community credit unions abound, and the number is on the rise with a record number of conversion requests in the regulatory pipeline. Although obvious competitors, these same credit unions pool their ATMs under a cooperative structure to benefit each other's members. In some cases they even pledge mutual support not to surcharge and fight any entity that chooses to do so.
These same credit unions also take time out from competing to share branches and service centers, again, for the mutual benefit of the many thousands of members that they collectively represent.
It goes without saying that credit unions are very creative when it comes to finding ways to also work together in an emergency (who can forget Hurricane Andrew, the Oklahoma City bombing, etc.?), or for an ongoing charitable purpose such as the Children's Miracle Network.
Cooperative ventures among credit union competitors have grown at a fantastic pace over the past couple of years. To cite just a couple of examples, competing credit unions have cooperated in putting together portals and other related e-commerce initiatives, data processing facilities, credit card processors, CUSOs, group purchasing cooperatives, advertising and marketing programs, call centers, branches, and more. Add to that, the number of formal and informal opportunities for credit union CEOs, whose CUs often can serve the same members or potential members, to get together and share the wealth of experience and experiences they each possess.
There has been a strong innuendo from time to time that attempting to be both a cooperator and a competitor leaves the smaller credit unions out in the cold. Not true. Cooperation and competition can and does involve all credit unions regardless of size, or any other artificial roadblock detractors may choose to throw up from time to time.
There are countless stories that demonstrate that big credit unions are too busy competing with small credit unions to find any ways to cooperate with them. Not true. The list of ways that large credit unions cooperate with small credit unions is long and getting longer.
To demonstrate just how far this cooperation and competition thing goes, it even impacts state and federal credit union regulators. NCUA and NASCUS members cooperate with each other. They also compete for CUs that have the freedom to switch charters.
They cooperate on regulatory and compliance matters, share training efforts, and seek one another's counsel on thorny dual chartering issues. On the other hand, more and more credit unions are converting from federal to state charters. Tell me that isn't another good example of cooperation and competition.
Add to this equation the private sector represented by ASI, an Ohio-based provider of both primary and excess share insurance. They and NCUA represent another example of two credit union groups that cooperate as well as compete.
Any one who says credit unions and the organizations that serve and regulate them can't both compete and cooperate needs to take a closer look at the facts.
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