NAFCU has a new strategic direction: Cut the fluff and focus onanything that can help its credit union members increase revenue,control compliance costs and lobby for the interests of theindustry.

The unrelenting pressures of the marketplace, the heavy costs ofregulations, the threats to revenue from banking reforms and thecontraction of the industry through mergers are compelling thenational trades to change and focus solely on their corecompetencies.

“From a branding perspective, we are known to have the best inadvocacy, the best in education and the best in compliance,”Dan Berger, president/CEO of NAFCU, said in an interview withCU Times. “Our members have said to us over and over inour surveys that they want more in the realm of advocacy. They wantmore education and they want more in compliance assistance. But inorder to do that something else has to go away.”

While NAFCU started its new strategic journey about a year ago,CUNA recently proposed making major changes that would alterthe trade association's structure and governance and affect everyleague, as well as hundreds of credit unions.

Despite the contracting credit union industry, however, NAFCUattracted 59 new members last year and signed up 27 new membersthis year so far, Berger said.

What's more, NAFCU's membership dues grew from $6.6 million in2010 to $7.5 million in 2014, according to the trade association'sannual reports. And because of its once-a-member-always-a-memberpolicy, the trade organization collects about $1 million inmembership dues from state-chartered credit unions that were oncefederally-chartered cooperatives.

Berger declined to speculate about whether a shrinking creditunion industry would need two national trade groups in the future.However, it is a question the NAFCU board has discussed, accordingto Debra Schwartz, president/CEO of the $2.7 billion Mission Federal Credit Union in San Diego, Calif., who alsoserves as secretary for NAFCU's board.

From her perspective, Schwartz sees consolidation as a goodtrend because it gives surviving credit unions economies of scale,placing them in a stronger position to cover the costs ofcompliance and helping them deliver the expensive technology-basedproducts and services members demand.

She also sees the two national trade groups surviving andadapting to the industry's contraction, which can benefit creditunions.

The first benefit is that two trade groups give cooperatives theoption of choice. The second benefit is that two tradeorganizations provide the industry with two opportunities toadvocate.

“I don't think there is anything wrong with two national tradegroups walking into a Congressman's office with two messages thatare similar in direction but also offer slightly differentviewpoints,” Schwartz said. “I think that is a good thing.”

Whatever credit union market changes may bring in the future fortrade organizations, Berger is confident NAFCU's focus on advocacy,education and compliance will continue to attract new members andhelp the trade group thrive for years to come. Berger said hereceives several calls every month from state-charteredcooperatives asking how they can join.

“Credit unions become members of NAFCU because they love ourfederal lobbying,” he said. “That's what we do.”

When Berger is walking on the streets of Washington, it seems heknows everybody and not just all of the men and women in Congress,noted Jeanne Kucey, president/CEO of the $171 million JetStream Federal Credit Union in Miami Lakes, Fla. She alsoserves as NAFCU's board treasurer.

“He even knew the names of the wait staff at the Capitol Club,”Kucey recalled. “That impressed me. He really is a relationshipbuilder. It's in his nature.”

Kucey believes those NAFCU relationships in Washington will payadvocacy dividends over the long run.

Read more: Berger is analyzing NAFCU's internaloperations …

“Even though the economy has turned around and I think mostcredit unions have benefited from that to a certain extent, westill have very complex and real concerns,” Kucey said. “That's whywe really do need to advocate our point of view and gain some wins.Our income is being threatened from the CFPB. The NCUA is thinkingabout increasing its regulatory field to include third-partyvendors, which amounts to more time and expense and more complianceall the way around.”

To redirect more resources to support advocacy, education andcompliance, Berger said he's using qualitative and quantitativeanalysis tools to review all of NAFCU's internal operations.

“We're looking at the entire system and we're still doing it,”he explained. “Let me be very clear, this a process. This is notsomething you can turn on and off because there are so many movingparts in a national trade association. If it doesn't fit in one ofthe three buckets we are focusing on – advocacy, education andcompliance – then we're not going to do it anymore.”

One of the first things cut was NAFCU's marketing awards.

“Marketing awards are nice and there is nothing wrong with them,but when you look at the back-end of it from a cost accountingstandpoint, it made no sense whatsoever,” Berger said.

The marketing awards program took a lot of time and requiredstaff and board volunteers to process hundreds if not thousands ofentries, review them and decide on the winners.

“It would shut down our marketing department for weeks if notmonths,” he said. “So how does that help my members?”

NAFCU also is taking a close look at its webinars.

“We are really focusing on getting rid of the fluff and stoppingthe webinars that are nice and may interest certain people, butdon't fit into one of the three buckets of advocacy, education andcompliance,” Berger explained.

The webinars, which would fall into the education bucket, shouldhelp credit unions learn how to grow revenues, because even thoughthe credit union industry continues to post membership growth,market share remains stagnant.

Instead of producing webinars on increasing a credit union'ssocial media footprint, Berger said, a better approach may bedeveloping webcasts on how to increase noninterest income throughsocial media channels.

“It's a tweak, but it's an important tweak because it's allabout credit union growth,” Berger said. “Credit unions have tohave growth in different products and services and that's hard todo because there is a lot of competition in the financial servicesspace.”

Although revenue growth and containing costs are important forall credit unions, it is particularly critical for smallcooperatives.

Michael Warrell, president/CEO of the $129 million Solano First Federal Credit Union in Fairfield, Calif., saidthat even though credit unions are facing many marketplace andregulatory challenges, he pointed out that cooperatives have alwaysfaced challenges and still found a way to adapt with assistancefrom trade groups.

He noted, for example, that the compliance advice and assistanceSolano First FCU receives from NAFCU and its CUNA-affiliated stateleague enables it to adapt to new regulations and controlcompliance costs.

“While the burdens seem overwhelming now, I firmly believe thatwith NAFCU and other trade organizations, such as the CaliforniaCredit Union League, we are going to be able to adapt,” saidWarrell, who was recently named NAFCU's executive of the year.“NAFCU focusing on what they are really good at makes sense.”