Small credit unions continue to need a significant amount of support in order for them to support their communities. Given their limited resources, it can be difficult to find partners and attend conferences to learn about new ideas and solutions.

Sarah Snell Cooke sat down with America’s Credit Unions Small CU Initiatives Manager Tom Sakash at GAC 2024 to talk about what’s to come from America’s Credit Unions (formerly CUNA) and how they will continue to support small credit unions into the future. We cover everything from the war for talent to the NCUA’s records retention rules. Sakash recognizes that with just a couple of staff members, it can be difficult to get out of your shops, but make it a point to get out there and see what other credit unions and businesses are doing to ensure they remain relevant!

Read the full transcript below:

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Sarah Cooke 00:00
So welcome, everybody. We're live again from GAC 2024. I've got Tom from America's Credit Unions here, Tom, introduce yourself.

Tom Sakash 00:10
All right. I'm Tom Sakash. I'm the manager of Small Credit Union Initiatives at America's Credit Unions, formerly CUNA. Yeah, yeah. And

Sarah Cooke 00:17

so talk about small credit unions. I mean, obviously, there is a movement as a movement, you know, they are part of the core of it, and yet they're, unfortunately, often merging away, and sometimes unnecessarily so like, What are you all doing to help support them and keep them alive and relevant?

Tom Sakash 00:41

Yeah, well, we're trying to do a lot actually, it starts with our small credit union committee, you know, so America's Credit Unions is an advocacy organization. And so we make sure that the small credit union voices represented through our small credit union committee, it's a group of about 15 CEOs of small credit unions, ranging from asset size from zero to about 100 million. And they just work to understand the issues to try to identify how they affect small credit unions the most. And then they work to advocate on behalf of small credit unions and the industry overall. So this week at GAC, the committee met with the Consumer Financial Protection Bureau and the NCUA and they did an outstanding job, really making them understand that the regulators understand how potential policies that they're considering are going to impact small credit union operations.

Sarah Cooke 01:44

So as part of those advocacy efforts, you know, what are the big topics that they're really hitting on with the regulator's? Yes,

Tom Sakash 02:06

absolutely. So it's just starting with the CFPB overdraft overdraft overdraft. So small credit unions and credit unions of all assets sizes, they use overdraft as a service to their members, services that keep their members from going to payday lenders, right. So if you offer overdraft as a credit union, your members have the ability to overdraft if they need it. And the other thing about credit unions is they, they really make sure that the member understands the service that they're using, it's all disclosed upfront. And members then have the ability to overdraft a little bit if they if they're in a tight time. Without that service. If the if credit unions were stripped of that service members might be forced to go to payday lenders, and then go into the cycle of debt that would be really harmful to them. And so the committee really made sure to educate the CFPB, about how the loss of that program would be very detrimental to the consumer health or the member, the members financial health. So that's a big one. And then when the committee met with the NCUA, they they talked a lot about consumer protection, the NCUA has a new sort of focus on consumer protection. And again, you know, the committee just wanted to make sure that they understood that new laws or new rules, I should say, are going to disproportionately impact smaller credit unions, when you're smaller, you know, a new rule is going to cost more to a smaller credit union than it will to a larger credit union because they don't have the scale to absorb those regulatory costs. Yeah, yeah.

Sarah Cooke 03:29

Which is really sad. Because the smaller credit unions, they're the ones I mean, not that large cranes aren't great to use. But the smaller credit unions are often the ones who are in the community all the time and really serve a particular niche need. So yeah, I think the efforts you all are doing, as far as like the advocacy piece is great. I either what other kind of programs do you have outside of like the GAC kind of focus? Yeah,

Tom Sakash 04:01

totally. Yeah, well, we put on conferences, for small credit unions. This is something we've been doing for a number of years now. We really right size, the time and the price for smaller credit unions who don't often have time to get away from their shops, and who often don't have the budget to attend big credit union conferences. So we charge pretty low registration rates, and we try to locate them in places that are easily accessible to large groups of small credit unions. And then we have them typically from Sundays to Tuesdays. So they're usually just out of their office for maybe one day, maybe a day and a half. And they've been really effective and getting small credit units together so that they can talk to each other network, learn new ideas. And we think it's a huge value that we've been providing. Yeah, the other thing we do is in addition to sort of in person events, we also have an online community. For small credit unions. We have 1500 members of that community. And these are small credit unions across the country who can network talk to each other ask for sample policies. Ask for referrals for different business partners or vendors, anything as it relates to running a small credit union, and it's really fantastic for them to sort of have their their peers nationwide as just a new resource for them. Especially when you're smaller, and you don't have a lot of in house expertise.

Sarah Cooke 05:15

Yeah, no, and that's great. That's one of the purposes, you know, reasons I founded The Credit Union Connection was because smaller credit unions and often smaller business partners, they don't know that the other, each other exists. And they can often work very well together hand in hand. Because, you know, a lot, if you're running a small credit union, and you are the CEO, and the loan officer ended up, you know, occasionally filling for a teller or whatever, yeah, you don't have the chance, you don't have the time to go research, like all the partners, so like having a collection of, you know, expertise among themselves is really great, because they also understand each other's issues. Very,

Tom Sakash 05:56
very true. Yes, for sure. Yeah.

Sarah Cooke 06:00

So with the merger, obviously, CUNA and NAFCU creating America's Credit Unions. Do you know, I mean, it was kind of early on, but will there be changes to what you all are doing? additions? subtractions just differences? Yeah.

Tom Sakash 06:16

Yeah, I mean, I think that, you know, our support for small credit unions will continue strong, just as strong, if not stronger, without a doubt. I mean, that's kind of how we view the whole, you know, merger is, you know, taking things that we were doing really well, and keeping those things, and then building on them. So, you know, I don't see the small credit union conferences stopping or the community stopping, you know, I think we're going to continue to do those. But then we get all these great ideas and resources from our friends and NAFCU too. And so we're very excited about what this will mean, for our support for small credit unions. And yeah, yeah, I think a very bright future for small credit union programming, as credit unions.

Sarah Cooke 06:53

Yeah. Which is great to hear, because so many, like I was saying earlier, so many are merging away. And one of those reasons can be difficulty finding new leadership, for example. Whether that's sometimes on the board, more often than not probably the CEO or manager, whatever their title is, yeah. Are there things in that area that you all are doing to help them network and find the right people? Yeah,

Tom Sakash 07:25

absolutely. So it's the biggest challenge that we think small credit unions are facing right now is the talent shortage, you know, whether that's at the board level, like you mentioned, the CEO level, or all the way down the organizational chart, you know, a lot of small credit unions that I talked to, they have a hard time getting anyone to apply for frontline staff, because of the wage pressures that are being put on them from other financial institutions or from other industries. And so finding really good people all the way up and down is a big threat. So don't worry about it?

Sarah Cooke 08:07

So did you finish your answer? No. But I can let me go back. And it just helps with the editing. If I go back. Yeah, for sure. So very often, you know, one of the issues with pretty similar credit unions emerging way is finding that new leadership, the new CEO, the new, or, you know, board members who are vacating positions, and then refilling those, what are the sorts of resources you all are offering for that?

Tom Sakash 08:34

Yeah, so you know, that's something that we are working on. So each year, our small credit union committee that I talked about, they, they work on a project to address a big challenge that are facing small credit unions. So this past year, they worked on business strategy for small credit unions. And they asked credit units across the country to submit business strategies that have been effective for them and growing their organizations. We got 50 entries, it's about 170 pages of strategy for small credit unions. It was released today or this week at the small credit union roundtable at GAC. And so that was their big project, we're so excited to show small credit unions this resource because it's going to be awesome. But this year, this next year, the committee is going to focus on talent, because it is an existential challenge. It's one of the biggest challenges that they face, having less scale and resources to be able to afford top talent at all levels of the organization is huge. So so we're just starting to have those conversations about how we can help small credit unions with the with the talent challenge, because you know, at the end of the day, your your credit union runs on your people, if you don't have good people, you know, makes it a lot harder to be effective at what you do. So if we can help small credit humans with the talent issue, I think that's a great way to position them for success in the future. Digital Transformation

Sarah Cooke 09:44
only does so much right. Yeah, right. Need the people need the people. And so what else have

you guys got going on as far as like program programming for the rest of the year? Yeah.

Tom Sakash 09:56

So the other thing that we've been working on in partnership with CUNA Strategic Services. I don't know if they're going through a rebrand yet, but still called CUNA Strategic Services. They've been working to help us form buyers groups of small credit unions. So often it's difficult for a smaller credit union to access new technologies, partner with a business partner because of the costs. So we feel like if we can band a group of smart credit unions together, maybe collectively negotiate a contract that might drive down those costs and make those services more accessible to those institutions. So they've been kind of helping us kind of figure out where to go first, you know, maybe which which service might be most appropriate for that type of arrangement. But we think that will be another way to help small credit unions, you know, access technology, or other services that they need to improve their member service.

Sarah Cooke 10:44

Yeah. And keep themselves relevant. Because yeah, member service doesn't just happen in the brand. Right? Yeah. And, you know, if you're not getting in those new, newer younger members, which I was saw the other day, I mean, I remember 10, 15 years ago, credit unions average member age was about 47. Now it's 53. You know, we were talking back then about we need to make them younger, we went the opposite. Yeah. So yeah, if you don't have that technology to start with, like, people, my age will adapt. My parents have adapted, you know, to banking online. But if you don't have it to start with those young people aren't coming in the door, period. Yeah. Cuz they want your digital door? Yeah, for sure. Yeah. And so yeah, I like that the digital piece is super important. So any other initiatives you got for the small credit unions that you haven't listed? Quite a few? Yeah, anything else that you might be offering?

Tom Sakash 11:44

Yeah, you know, I mean, I think a big part of what I feel like we can do, can do, especially at America's Credit Unions moving forward, and our, you know, singular focus on advocacy is really continue to identify those areas that are pain points for small credit unions and work with the NCUA in particular, on how to address some of those things. We found that in our discussions with the NCUA, that they're usually receptive to the challenges that small credit unions face. And the other, you know, funny thing is, is that small credit unions might be the ones that bring up an issue, that's a pain point for them that they think is just a pain point for them, but ends up being a pain point for larger credit unions. A great example of that is record retention rules. So right now, credit unions are required to keep a lot of documents, you know, related to, you know, loan files, and board meetings, and so on, and so forth. And there are so many records at this point, because a lot of these credit unions are old, that they're filling up their offices, and they're having to go out and rent storage, lockers and storage garages, to, you know, save all these records that they're being required to keep. Well, that's a problem for small credit unions. It's also a problem for large credit unions as well. I mean, think about the scale and the scope of records that they are forced to keep. And so the committee has brought that up to the NCUA. And we think the NCUA might might move on that maybe enact a rule or initiate a proposed rule. And when our committee members have been out and about talking to other credit unions in the industry, larger credit unions, they're like, You know what, that would be huge for us, too. And I think that's something that's really special about the small credit union committee is that they just have a different perspective. But, you know, they can be just as effective for all credit unions as well, when it comes to advocacy, for sure.

Sarah Cooke 13:25

Not a wise use of member money there. Right. So I always offer final thoughts to my guests. Okay, I'm gonna give you what would you advise? What are your final thoughts to our audience out there?

Tom Sakash 13:39

Final thoughts? Well, if I was speaking to small credit unions, I would tell them, get out of your shops. You know, I know it's hard. If you have just a couple of staff, it can be difficult. But you know, it's really important to come to events, like GAC to go to your chapter events, your league events, our small credit union conferences, because that's where you learn new ideas from your peers. There are some cool things like you'll read in the blueprints for small credit union success, that small credit unions are doing to really run awesome organizations and to really serve members in cool and effective ways. And that information is out there. You just got to get out there and learn it from from your peers. So stay involved in the credit union community. Yeah, for sure. Excellent.

Sarah Cooke 14:17
Thank you for your time. Yeah.

Tom Sakash 14:18
Thanks for having me. It's a pleasure.