Credit Union Value Is Not in Assets
The world is moving in a direction that everything needs to be bigger and better. Things need to be quantifiable to possess value.
Take for instance a recent entry in First Entertainment Credit Union CEO Charles Bruen's blog entitled "Too small to exist." In it he addresses a credit union the NCUA recently closed that had just 213 members and $175,000 in assets. Bruen suggested shuttering all credit unions with less than $1 million in assets.
I'm not sure how a credit union that size remains in business in the 21st Century, but it served its members over the last 50 years. Personally I can't see how a credit union that small could provide much useful to me or the people I know. Then again, I live in a relatively affluent area of the DC suburbs. Not Harlem.
Yes, the credit union will cost the NCUSIF (though not nearly as much as some large credit unions will in the not-too-distant future) and yes, it had 40% delinquencies. Convent FCU had management issues, no doubt. How many financial services choices do Harlem residents have? These are exactly the areas credit unions should be serving-maybe not exclusively because it would be extremely difficult to make the numbers work. I wonder how many other financial institutions served the members of Convent Avenue Baptist Church-not just existed in the area but served them. If a better alternative existed that would be great.
While management and oversight could have been stronger at this credit union, eliminating all credit unions under $1 million (and then move up, Bruen wrote) would destroy the only financial hope some people have beyond payday lenders and pawn shops. Plenty of very large credit unions are in horrible shape right now anyway so obviously the determining factor of a credit union worthy of existing is not necessarily asset size. If a small credit union fulfills a need and can do it in a safe and sound manner, more power to them. Large credit unions could be providing some back-office assistance, which would 1) be in line with the cooperative philosophy; 2) be politically wise; and 3) help some people of modest means along the way.
In the publishing world, we watch things like web site page views and unique visitors and time on site. One columnist at a mainstream paper was fired, in part, because his page views declined. Never mind the knowledge of the person or the talent; if you put George Clooney or Brittany Spears in the headline, you're golden but what's the value in that? What's next? Will parents' love be measured by the number of times they text their child?