In her opinion article in the April 18 issue of Credit Union Times, Ann Brinkerhoff suggested that CUNA's small credit union broadcast left her with lots of unanswered questions. Ann is right! Correlating a wide range of characteristics with the degree of a credit union's success is a challenge. However, we need to be sure the questions we ask address central management issues. The real challenge for smaller credit unions is to recognize their unique circumstances, and then make management decisions that work within their community. Research provides general insights and ideas on how to improve performance. However, it can't manage the credit union. Here are six findings of our research, and the important questions they suggest: 1. Thriving small credit unions are highly effective lenders. Important Questions: How can our credit union meet the borrowing needs of members? How can we speed up our lending processes? How can we eliminate unnecessary procedures to make it easy for members to get a loan? How can we market our lending operations? How can we attract new borrowing members? The emphasis of these questions is not on what others are doing, but on what we can do to become an effective lender in our unique environment. 2. Thrivers exploit a wide range of lending opportunities. Important Questions: How can we boost our success in the used car loan market, an area where most thrivers excel? How can we become effective in every major loan category? What new loan products should we offer? 3. Thrivers offer members more services and products than similar size credit unions. Important Questions: If we can't offer all services, what new products and services are most important to members? How can we introduce new services to help the credit union grow? Some small credit union managers believe that they can offer almost all products and services because of the Internet and other technologies. 4. Thrivers are willing to incur modestly higher operating expense ratios than similar size credit unions. Important Questions: Does our lending program and fee structure enable us to offer quality products to help us thrive? How can we be more cost conscious, efficient, and value driven so we can invest in high-payoff products and services? What's the difference between effective cost management and excessive thrift? 5. Thrivers pay members higher rates for savings than similar size credit unions. Important Questions: How much capital is enough? (Most small credit unions have too much.) How can we improve our lending program so that it will generate revenue to pay higher rates on savings? 6. Thrivers generate higher yields on total assets and greater fee income. Important Questions: How can we get high yields on all investments, realizing that a good loan is almost always the best investment? How can we build appropriate fees into the income stream, knowing that the spread between loan and savings rates will probably contract in the future? Some credit unions have greater obstacles to becoming thrivers than others. Some serve members with limited incomes and capacities to borrow. Some serve a small group that is shrinking and aging. Others are located in communities with economic problems. I wish research could tell every small credit union exactly what it should do to be a thriver. This isn't possible, given the diverse circumstances under which they operate. Research does give insights and guidance. But research can't make management decisions. By asking the right questions, however, decisions become easier and success more assured.

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