Small credit unions are bristling as industry leaders discuss consolidation and mergers as a solution for industry losses.
Paula Nihoff, president/CEO of the $48 million HealthCare First Credit Union, said she thinks many in the industry believe small financial cooperatives don't have a right to exist, even though they successfully fill important niche markets.
Furthermore, she said, some boards have been "misled" by former banking executives who have convinced them to "run credit unions like banks", growing the institution by leveraging capital and targeting small credit unions for mergers.
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"Yes, former bankers have intelligence and abilities, but in my opinion, they need to be deprogrammed and told they need to play the game our way if they're going to lead large shops," she said.
Brad Warner, president/CEO of the $47 million White Rose Credit Union, began his career at Mellon Bank, and said he "understands the world" of billion dollar institutions. However, York, Pa.-based executive said it was large credit unions that drove corporates to invest in risky securities, not small ones.
"The problems are on the investment side, not the transactional side," he said. "I'm not the one who had tens or hundreds of millions of dollars to take shopping, offering it to whichever corporate would give me the best return."
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