A Seismic Year Opens DEI Advancement Opportunities

The COVID-19 pandemic took over 2020 and accelerated longstanding racial and economic-based inequalities. Health and financial landscapes diverged along economic and racial fault lines. Add in nationwide agitation and calls for racial justice, and we can see how DEI erupted front and center for our nation, for credit unions and for many of us as individuals. A year after credit unions took a stand for diversity, equity and inclusion (DEI), what progress has been made? The short answer is that while the ground beneath us has shifted, DEI has emerged as an established feature of the credit union ecosystem.

For their part, credit unions found themselves addressing DEI on two fronts. First, they were prompted by the market to position themselves in relation to civil rights calls for racial justice and calls for greater financial inclusion to address growing inequalities. Second, credit unions were nudged to examine themselves internally, in terms of how their organizations measured up on staff and leadership diversity, the degree of equitable work outcomes, and levels of inclusivity and belonging their work cultures nurtured. Now, one year later, we can begin to assess what progress has been made and what lies ahead.

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Building Infrastructure and Early Steps

From a system-level perspective, a great deal of infrastructure-building took place in 2020. From the top, then-chair of the NCUA Rodney Hood declared financial inclusion as the civil rights issue of the 21st century and called on credit unions to expand their offerings for affordable financial services. From the grassroots, the CU DEI Collective was launched with the claim that "diversity, equity and inclusion are fundamental to a vibrant, relevant and growing credit union movement." So far, over 225 credit unions and system partners have signed up to be part of the collective, which will endeavor to drive system-wide, meaningful change.

The African American Credit Union Coalition grew their reach with over 1,000 registrants to their annual virtual event, whom they called on to unite against racism, and expanded their programs and partnerships. Other new and newly revived organizations to help advance DEI include the Credit Union Women's Leadership Alliance, the National Association of Latino Credit Unions & Professionals and CU Pride. There has even been a growing movement to add DEI as the eighth cooperative principle.

In order to better support DEI work within credit unions, Filene Research Institute launched a new Center of Excellence for Diversity, Equity and Inclusion led by Filene Fellow Dr. Quinetta Roberson. This five-year research project will tackle challenges in access to both talent and products and services in the financial services industry and conduct applied research on DEI practices in credit unions as a model for the larger financial services sector. Filene's Center will provide support to credit unions as they implement evidence-based strategies to advance DEI in their organizations in order to attract, retain and develop talent, better serve members, and create business and social value.

Many credit unions released statements of commitment and began to adopt DEI-informed policies and practices. Some created new leadership positions devoted to DEI, and CUNA notably followed suit with a new position of vice president, diversity, equity and inclusion held by Dr. Samira Salem.

The Path Forward

In terms of our cooperative principles and history of mission-driven work to improve member well-being, one could argue that credit unions have always had DEI as part of their DNA. The cooperative principles connect easily to those espoused by DEI.

And yet, by any number of objective measures, a great deal of work remains to be done. Our communities are becoming more diverse, and for credit unions to remain relevant they will need to keep up with the times. Ask yourself, does my credit union's staff and leadership reflect the members (and potential members) we serve? How might a credit union staff reflective of its membership create a more empathetic member experience that deepens engagement? What local partnerships can credit unions leverage to further embed themselves into the fabric of their communities?

Consumers that value DEI want and expect the organizations they do business with to put in the work to do better. One 2020 marketing study found that nearly 60% of customers in the U.S. want businesses to be vocal about issues and 75% of Gen Z will conduct their own research to see if a brand is backing up their statements with actions.

On the product and services side, another approach credit unions can take is to learn more about their members and communities to identify the financial pain points and barriers to access experienced by members and potential members. Credit unions would do well to evolve and meet the new financial needs of members struggling with increased medical costs, volatile incomes and a frayed social safety net that may not be available in their time of need. Cooperative finance can do better. It's time to dust off your credit union's value proposition and breathe new life into how you can truly address and improve member well-being.

From 'Why' to 'How'

Most importantly, the conversation in C-suites shifted over the past year from "why should we do DEI" to " can we leverage DEI to advance our strategic pillars?" As an approach that tackles both margin and mission, DEI addresses a number of pressing concerns faced by credit unions as they look to differentiate their offerings in an increasingly competitive financial services marketplace. I see many credit unions poised to roll up their sleeves and begin leveraging DEI in 2021. I can also tell you now that the work will not be done in 2021 – advancing DEI is a journey that takes years to reach maturity.

If you are looking for a way to engage with DEI in your credit union, you may want to begin by taking Filene's DEI Practices and Policies survey. Research has shown that organizations with effective DEI practices and policies perform better in terms of value-creation and growth. But these findings have yet to be validated in the credit union system. Your participation will support foundational benchmarking research much needed by the credit union system, and participants will receive a personalized index with sound and effective direction for next steps your credit union can take to achieve desired outcomes.

The business case and opportunity presented by DEI are clear. Activating DEI can build on the credit union movement's legacy of financial inclusion and, given the demographic and social changes taking place across the U.S., the work also represents a necessary business decision for credit unions wishing to grow and stay relevant into the future. Not only is your field of membership growing more diverse and expecting their financial services providers to be engaging with DEI, but your next generation of staff and leaders are as well.

Don't fall into the chasm. The time is nigh to make a commitment to engage with and advance DEI in your organization. Looking for guidance? Join Filene on June 22-23 for our next virtual event, Amplifying Impact: Connecting Credit Unions and Communities, where we will revive foundational credit union values of inclusion, equity and security to meet the demands of our day. Stable ground can be reached, but not without putting in the work.