“When life gives you lemons, makelemonade” is a proverbial phrase often used to encourage optimismand a can-do attitude in the face of adversity or misfortune. Whenspeaking with credit unions that are facing big challengesespecially with earnings or growth, I like to tell them about TeriRobinson and the Pacific NW Ironworkers FCU.

Teri Robinson took over at the helm of Pacific NW IronworkersFCU in March 2010 – just in time to receive a letter that wouldforever change her leadership path. The NCUA told her that hersmall Portland, Ore., credit union was in net worth restoration andhad been downgraded.

She told me her credit union was struggling with loan losses andthat she, as a new CEO, was wondering if she had set herself up forfailure and if it was worth it.

Robinson isn't alone: smaller credit unions make up the majorityof our numbers and are facing significant challenges ranging fromearnings and growth. And smaller credit unions will need to adapt,learn, adjust, innovate and collaborate in order to survive.

Robinson decided that survival was the only option for her. Shesaid her first step was convincing the NCUA that her credit unionwas determined to survive and keep its three-branch footprint – onein Portland, one in Tukwila, near Seattle, and one in Spokane,Wash. – up and running.

The second step, Robinson said, was to radically (andcreatively) cut expenses. She said she called everybody the creditunion did business with and that 90% of them did something toreduce the expense. Robinson also looked for ways she could runmore efficiently, enlisting the help of her employees andoverhauling the credit union's lending model as part of its networth restoration plan.

The third step, she said, was getting in contact with the peoplewho would provide support, including the National Federation ofCommunity Development Credit Unions. The Federation leveragedPacific NW Ironworkers’ low-income designation for secondarycapital and, slowly, the tide began to turn.

Now with $14 million in assets, Pacific NW Ironworkers hisreporting loans up 40% and an 8% average loan yield. Robinson isone of hundreds of small credit unions leaders that have managed toturn foreboding and hopelessness into success.

And while each credit union turnaround comes with a differentset of circumstances, these best practices are key to recovery:

Be willing to change and learn new things. The same actions moreoften than not lead to the same results. Accept that changes are onthe way and utilize the experience to learn new best practices.

Communicate with examiners to find common ground. If yours is acredit union in net worth restoration (or getting too close forcomfort), the best thing you can do is communicate with examinersearly and often. Robinson said her faith in what she was doing,confidence she shared with her examiners, helped the regulators torelax.

Utilize credit union expertise. Sometimes, it's a matter ofbeing in touch with the right people and looking for everyopportunity to position yourself for success. Look to your mentor,your association, or to other credit unions in your area.

Create and commit to a plan. Reduce expenses and mitigate lossesgoing forward. Robinson said her credit union reined in its loanunderwriting to ensure the loans it made were no longer going tocauses such losses.

Take action. Be willing to roll up your sleeves to save money.Sometimes you have to work the phones and pound the pavement to seeyour plan come to fruition.

Keep looking to the future: Hard times don't occur in a vacuum.Robinson did double-duty, implementing her plan to save Pacific NWIronworkers while looking for ways to improve and innovate. Inaddition to developing new programs such as remote-capture, creditunion staff got serious about member recruitment. Pacific NWIronworkers wasn't taking advantage of its opportunities. Now itis.

Smaller credit unions are being squeezed tighter than ever, butRobinson's story proves that where there is a will, there is a way.The fight to save a struggling charter is not easy. But it's worthit for those credit union leaders who believe that their chartercan still be relevant in the lives of their members.

Scott Butterfield is principal of Your Credit UnionPartner in Sumner, Wash. He can be reached at (253)507-2443 or [email protected].