They should also follow the guidance they give members. Of the four general categories of advice credit unions give members who obtain a financial windfall, some of the advice categories don't quite translate:

Save: In the credit union context, this means adding to their capital position. However, credit union capital is hundreds of basis points above the regulatory minimum so it is questionable how saving more will help fulfill their missions.
Pay down debt: Credit unions don't hold debt in the traditional sense, but many have debt in the form of short- and long-term borrowing and those positions are growing, so it may be good for some. More generally, many are loaned out or close to it, so paying down debt may not be an option that resonates.
Go on vacation: Credit unions love attending meetings and conferences. In 2017, they spent $70-plus million on education and training. While some investment here is worthwhile, it is unlikely the full amount would affect even the most curious institutions.

But one piece of advice does hit the mark: Invest.

Investing is about buying something today in hope that the asset will increase in value, pay dividends, or both. Credit unions' investment portfolio is $360 billion, so adding less than 1% more in traditional investments would have a minimal impact. Seize the opportunity to invest in a different asset class. This diversification approach may kick start a new line of business, build a new competency or enable entry into new markets.

In 1935, Edward Filene gave a $25,000 personal loan (roughly $450,000 in today's dollars) to start CUNA Mutual Financial Group – which now has 3,500 employees and $3.5 billion in annual revenue, and serves about 95% of the credit union market. Not a bad investment, eh?

Instant Insights /

NCUA Dividend: A Case for Critical Thinking

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