Top Three Reasons We Should NOT Start New Credit Unions—And Why I’m Doing It Anyway

Denise Wymore, Chair, The CU De Novo Collective

Back from the GAC and still riding that conference high like so many of us. After 43 years in the credit union movement, this annual gathering feels less like a conference and more like a family reunion.

This year, however, I attended from a different perspective. Going into the event, I unexpectedly found myself without traditional employment. But instead of feeling uncertain, I felt free—free to create the job I truly want and find ways to make it sustainable.

For the past two years, I’ve dedicated my spare time to helping groups navigate the grueling process of obtaining a new credit union charter. It’s been one of the most fulfilling experiences of my life. And lately, I’ve been asking myself: Wouldn’t it be great if I could actually get paid to do this?

When I reconnected with old friends at GAC, and they asked, “What are you up to these days?” I proudly answered: “I’m helping start new credit unions!”

I wish I had captured their reactions on camera. Nearly every single person paused before responding—many with a puzzled, “Why?” Some well-meaning friends tried to talk me out of it, citing what they saw as the obvious obstacles.

After hearing the same arguments repeatedly, I realized I had conducted an unintentional poll. So here are the top three reasons people say we shouldn’t start new credit unions—followed by why I believe we absolutely must.

1. If small credit unions are struggling, what chance do new credit unions have?

Watch Herb Wegner Award winner Teri Robinson’s video, then come back to me.

One of the biggest reasons small credit unions merge is they lack growth. As the saying goes, “If they’re not growing, they’re dying.”

Well, let’s apply that logic to the broader credit union movement. We’re not growing. Which means, by that same logic… we’re dying.

New credit unions are not just a nice idea—they are essential to our survival.

2. Why not just become a SEG of an existing community-chartered credit union?

Every single group I’m working with has been offered that option—and every single one has declined.

Why? Because their communities are not being served by those credit unions.

Most of these groups are made up of minority populations trapped in the payday lending cycle. Many large credit unions have gatekeepers that make it difficult—if not impossible—for these individuals to become members, let alone qualify for a loan.

There are alternative solutions. Take a look at Debbie Wege’s Herb Wegner video about EXPRESS Credit Union and BECU for proof that underserved communities can be reached—if we’re willing to do the work.

3. People expect full-service banking. Starting from scratch is nearly impossible—the capital requirements alone are astronomical.

It’s true that today’s members expect full-service financial institutions, which is why there’s so much pressure to gain economies of scale through mergers. But here’s the thing:

Most of the groups I’m working with don’t need to build a full-service institution overnight. They need to help their communities escape payday lending—just like the earliest credit unions in America helped workers break free from loan sharks.

Back then, we called it loan sharking. Now, we’ve legalized it. The number of payday lenders in the US is about 23,000 – twice that of McDonald’s and Starbucks restaurants.

The answer? The modern-day “cigar box credit union.” With the right mentorship and scholarships to cover initial expenses, a new credit union can launch with as little as $100K in capital.

And Here’s Why I’m Doing It Anyway

In my 43 years, I’ve worked for credit unions, state leagues and CUSOs. I’ve seen what works—and I know that credit unions succeed when we work together.

State leagues were originally created in the 1930s for one purpose: to start new credit unions. That’s no longer their primary focus, and that’s okay. But the demand for new charters is growing, despite the lack of a coordinated effort.

These groups don’t need me to convince them to start a credit union. They are already willing to spend three to five years fighting through an archaic process to make it happen.

If they refuse to give up on their communities, I refuse to give up on them.

On the last day of the GAC exhibit hall, I ran into Guy Messick—the CUSO guru. When I worked with him at NACUSO, he was deeply concerned about the decline in new charters and the rise of mergers.

He put it simply: “If credit unions go away, CUSOs go away. Credit union trade associations go away. It’s not good for anyone.”

He’s right, so I’m rolling up my sleeves, and I’m doing this anyway. The movement depends on it. Who’s with me? 

For more information, contact Denise here!