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Sarah Snell Cooke: Good afternoon and welcome, all. I'm here today live from the California and Nevada Credit Union Leagues' annual conference, with new President/CEO Diana Dykstra. Good afternoon.
Diana Dykstra: Good afternoon and thank you.
SSC: Thank you. So, how are you liking the new job so far?
DD: So far-four weeks, two days-things have been great. We're in the middle of our annual meeting and convention, which is a huge undertaking, and it's really interesting from this side of the fence than being on the participant side, but things are going well.
SSC: How has it been to transition from CEO of a credit union to CEO of a trade association?
DD: I was talking to some friends today saying that I've worked in credit unions for so long, and you can walk into a credit union and you know how to read the financial statements and you know every job that everybody does and how it relates to one another. And I walked in and realized I could read the financial statements, but how we generate money is different. And I knew all the people in the league, but what is it they do and how do they do it? So it's been an interesting transition from running a credit union to helping credit unions be successful.
SSC: And I'm sure that's much needed right now in California and Nevada in particular. Any surprises yet?
DD: I guess my biggest surprise was my first Friday I did get to meet and chat with the President of the United States. So that was a big surprise in a good way.
SSC: What was the occasion?
DD: He was in town doing a fundraiser and I happened to be available and it was very neat. And he said to me that he loved credit unions, so we hope that that carries through.
SSC: That's a good thing. Absolutely. So California has been a very difficult place to run a credit union of late-the last two, three, plus years. Talk about the opportunity and the challenges that credit unions have had, particularly in this state over the last couple of years.
DD: Well certainly the economy has been challenging, and we all know we didn't cause the problem; we were victims of the economy. Credit unions really have struggled, but the more important thing is that credit unions have made a difference. We continue to lend. We continue to do things to help our members. The loan modifications that have been done in the state of California. The outreach-instead of waiting for a member to come to us, credit unions were proactively looking for people that we thought were having problems. So we really did do great things. We would love to have great return on assets and growing capital, but we've made it through and I think we've come out smarter through all of this and we're proud of what we've done, even though it's been difficult.
SSC: Now you have expanded your reach from not only San Francisco Fire Credit Union, your former credit union, to all of California and all of Nevada as the leader of the trade association. How do you see that increased responsibility you have in helping these credit unions to survive and thrive through the difficult problems?
DD: I think I said this morning: I love running a credit union. It was a great job. But my passion is really to make sure all credit unions can do well and survive and grow and prosper. So I think that it is a challenge, but being that I've started with a credit union in the lowest job you can have and worked my way up, I understand what goes on in credit unions and I think the league can be positioned to be innovative and bring product and service and ideas to help our credit unions really move through and transition to this new reality.
SSC: Any new initiatives you have for the association to help credit unions through?
DD: At the top of my mind-four weeks and two days-there aren't a lot of my initiatives. But I was fortunate to have worked on the committee for the last two years in collaboration, and just last month the company incorporated-it is now CU Roots-and we are doing great things to bring economies of scale and reduced cost and back-office operations for credit unions. And I think the league really has and will continue to take a lead in that.
SSC: Credit unions are moving toward consolidation-that's a concern and an interest of anybody in the industry, trade associations and publications alike, as well as some of the leagues are consolidating-yours now represents two states, and it has for a while. Where do you think these trends are going?
DD: Certainly consolidation is part of what's happened to us for a number of years. My speech this morning-five years ago we had 9,200 credit unions; today we're just over 7,400. Consolidation is a natural progression of things. I do think that if we can collaborate more and really help each other systematically or system-wide, we can slow the consolidation. But it is natural. I mean sometimes, a credit union-we've got two large credit unions, one in California and one in Oregon that are merging-and it just creates a better economy for them. But I do think we'll continue to see it. I hope we can slow the amount.
SSC: Is the consolidation good for the industry in general? Maybe not necessarily for some of the credit unions that are having difficulties, but in general do you think they'll come out maybe larger and stronger?
DD: I would like to say that I would love all credit unions to maintain their current charters and their business. The reality is the world's changing, sponsors are going away, smaller credit unions have some difficulty in providing all the product. Larger credit unions-there's some attractiveness today to merge, to really gain some economies and broaden field of membership. But again I really hope that through collaboration and cooperation we can create systems in which credit unions that have the want, the desire and the ability to remain viable will have that environment.
SSC: You've talked a lot about collaboration, and you hear from both sides that collaboration is better and stronger and it's where credit unions are going to survive. Others have said we need to compete, we need to be financial services institutions first. Do you feel there is a loss of that cooperative spirit, and if so, how are credit unions going to regain it or use it to their advantage in the long term?
DD: I think for a period of years, when field of membership started opening up and we had lots of community charters and overlapping, we got to feel we were competitive. We're not big enough to say that our competition is one another. I think through this financial crisis, credit unions realize that being cooperative and working together is the only thing that makes us survive. And I see a renewed sense of that cooperation, and I think that we all know we need each other. The system is interdependent, and when you make a loan or you lose a loan, it also impacts me. And we just need to get back to really talking about how we can cooperate and make each other stronger instead of worrying about competing in a very large market when we only have 6% market share.
SSC: Absolutely. So how are credit unions going to face up against the banks?
DD: I think we're just going to have to tell our story better. Certainly getting out to the media and really telling the difference that credit unions make in communities-telling our story, showing how we help members, how we grow businesses, how our communities have benefited from us being in the marketplace-and people will vote with their feet. I come from San Francisco, and certainly there was this sense of community, strength and awareness, and when the banks started falling by the wayside the last couple of years, you saw tremendous growth and lots of people looking for that local decision, somebody that cares about the community. And I think that's our story and we need to tell it.
SSC: Well thank you very much for your time, Diana. We appreciate it.
DD: Thank you, Sarah.