Small CUs Snared by Negative Trends
I appreciated the Editor’s Column on small credit unions [July 20 issue]. Fact is, small credit unions shouldn’t be saved just because they are small. On the other hand, the sense of cooperation and fair play is nearly gone from the language of larger credit unions.
I worked for a large credit union in Portland, Ore., with roughly $250 million in assets. Part of the weekly strategy of senior management was to assess the financial conditions of other credit unions and establish personal relationships with the CEOs and senior staff, not for the purpose of helping them with any issues they might have, but rather, to strategically place themselves front and center for potential mergers. The credit union I worked for had undergone several mergers, morphing into a large credit union. Of course, they always positioned themselves to be the surviving credit union. It was also interesting that their new membership was next to none, but yet they grew tremendously year after year. The reason and purpose had nothing to do with strengthening the movement, or should I say “industry.”
More and more senior management types use the term industry to define credit unions, which is reminiscent of the term industry for banking. Of course, banks are not cooperative, so it goes without saying that there is a path that many larger credit unions are on, and it has nothing to do with the history and mission of credit unions.
If you need to know why small credit unions are valuable, you need look no further than to our history for the explanation. The original mission is contained within the walk, not just the talk. Where most any credit union can talk the talk, and teach the talk to their staff, it is becoming rare to find CEOs who still walk the talk (with the exception of Otero FCU of New Mexico, where I’ve had personal experience in their walk). Smaller credit unions know their members. They know their communities. They understand first hand economies of scale. They understand that they can’t be everything to everyone, but they certainly can bring a human perspective and individual touch to their jobs. Smaller credit unions still know the value of cooperation and support of local state credit union associations and the help they receive from their corporates. They support them even though the economies of scale may dictate that other. larger credit unions have withdrawn that same support.
This is only the beginning of the dialogue of the importance of small credit unions and why they are an endangered species. They are threatened not because they can’t provide needed service and improve the economic well being of their members but because they are being forced out by competitors that claim to be walking the talk. And, it ain’t always so.
The trend toward few credit unions is a negative thing. The trend among credit union scholars to think of us as an industry is a negative thing. And for many other reasons, we as a movement are losing our way.
The Florist FCU