The credit union system has long touted the merits of collaboration and cooperation. As clich?d and overused as the idea may have become, collaboration will continue to be critical to credit unions in 2011 simply because credit unions face a sobering reality.

The truth is that credit unions, small, medium, and large alike, are vulnerable. Painful reminders of the current operating environment include that credit union operating expense ratios exceed net interest margins, noninterest income is under legislative attack, corporate capital investments for many credit unions have been wiped out, loan-loss expenses are at an all-time high, and corporate stabilization and NCUSIF expenses, also at historical highs, may extend for as long as 10 years.

Even without the financial crisis of 2008 and the extended economic recovery that we are now experiencing, two fundamental facts about the credit union system have been nagging at us for years. First, there is the undisputed correlation between operating efficiency and asset size. Secondly, credit union market share has remained flat for nearly two decades hovering at 6% of financial institution assets since 1992.