Underground Thriller Coverage: Some Hard Questions Around CU Impact, Collaboration

Several serious questions around the social impact of credit unions, why more consumers don’t know about CUs, and whether the long-time credit union practice of collaborating with each other is deteriorating were explored during a far-ranging discussion among CU leaders here.

The issues, questions and proposed resolutions were discussed during a session titled “Making an Impact” during Mitchell Stankovic’s Underground Thriller meeting in Las Vegas, which was held in conjunction with the annual Money 20/20 conference.

Participating as panelists were Renee Sattiewhite, president and CEO of the African-American Credit Union Coalition; Tom Kane, president and CEO of the Illinois league; and Joe Franklin, senior director-experiential marketing and industry engagement with Origence. The session was moderated by Keith Sultemeier, president and CEO of Kinecta FCU.

Here is what was discussed, the ideas exchanged, insights offered and more.

The ‘Definition’

Sultemeier: Give me a definition of social impact?

Sattiewhite: For AACUC, it’s internship matches, mentorship matches, hiring and retention development plans, knowledge networks, career networks, career progression and talent pipeline diversity. It’s looking at bringing people together to move our industry forward. The impact for AACUC is do we have people of color who look like me in the C suite? Are we making decisions? An unfortunate fact is we have 450 billion-dollar-plus credit unions, and there are only 10 with CEOs who are African-American. The impact for me, for AACUC, is seeing more leadership in the C-suite and also making sure those people are in their communities serving the people that look like them.

Sultemeier: Are you planting seeds with the early generations to get them into those positions, or all of the above?

Sattiewhite: We have a young professionals network that is phenomenal and growing. We’re also looking at creating C-level executive training. We've partnered with TruStage and CUES—CUES, as we know, does it best--- so they're the graduate school. We have what I call a university-level program that shows you how to be an executive. Most times, people of color don't have the opportunities to go to these schools or to get the tutoring that they need, so at AACUC we're developing programs that do that.

Getting Out in the Community

Franklin: I think first and foremost it's kind of two different columns, First of all, it's the business side of the house. At Origence, we gauge our commitment to community by ensuring that we are helping our credit unions meet the members where they are. But it’s also about being out in the community. We want to make sure we're enabling them first and foremost to do their jobs well and quickly and easily, and that everything that we are producing is helping to streamline that process so that they are actually getting the work done so they can be out in the community.

I think being out in the community is so, so vital. I love turning on my computer in the morning and seeing our company chat pop up and everyone is talking about how amazing the culture is at Origence because we're out in the community. Especially this month with breast cancer awareness, we're doing walks, we're out in the community. We're doing that but, again, we're pulling alongside our credit unions to be out there doing it as well. We’re trying to lead that force.

The Biggest ‘Bow’

I think probably our biggest bow, if you will, is our relationship with CMN hospitals and that's truly how we are able to really be part of the community. Our biggest event is our wine auction, which many of you are a part of. Last year we were able to raise $1.8 million. The event in and of itself is great and it's amazing, but it's really not about that. It's about all the hospitals back in the communities that are receiving those funds so that when our credit unions are out they are more than just the financial institution, they are part of the families they are helping.

We are proud of our partnership with CMNH and again, not to toot our own horn, but collectively we have raised over $16 million for CMNH since 2006. I think that's a big piece across the board and that's really how we measure it.

A League Perspective

Sultemeier: You raise a great point. It bears pointing out again that it doesn’t just have to be about us providing the social impact directly, it can be us leveraging our resources to amplify impact through others. Tom, what do you think?
Kane: As a president of a league…the key thing for us is trying to figure out how, first of all, to be able to put credit unions in a position to be able to survive. That’s a lot of what we end up focusing on at the state level. There are a lot of small credit unions in Illinois, so that's a big deal for us.

You’d like to be in a position to be able to focus on more positive things and see the powers of credit unions expanded but, unfortunately, in the environment we've been in it's been much more of a defensive battle. Our big thing is to be able to protect credit unions as much as possible so that they can do the social impact in their communities.

Not only do I run the league, I also run a service corporation, as well, and our focus very much is on smaller credit unions. A lot of it has to do with survivability. Certainly, credit unions are thriving as an industry, but when you take a look at the kind of the categorization or stratifications, the biggest credit unions are doing great, but at the next level maybe not quite as much, and then when you get down to those under $100 million, that's where you're seeing a lot of the struggles.

The Capital Message

As an industry, we need to stay together, because I will tell you when I go to Washington or when I go to Springfield (Ill.) and talk to legislators, some big credit unions do come along, but the stories that we tell are the stories of those smaller credit unions and the impact that they've made, because that's the differentiation with the banks. I hear a fair amount of “the big credit unions are just like banks,” but the smaller and mid-sized ones are the stories we like to tell. It’s just important that this industry continue to stay together as much as possible. These smaller credit unions and mid-sized credit unions must remain viable and because they do make a huge social impact.

The ’Big Tax Battle’

Sultemeier: There’s a big tax battle coming up and it's going to be pretty nasty. We'll be on the table again as we always are and there's a certain lobby that's going to make sure that they know about us. Are we doing enough? Are we telling the right message?

Kane: I don't know if you can ever do enough. It's one of those things where (the tax exemption) has never come up, so people can get kind of complacent about it. But the environment has changed and certainly in Illinois we are familiar with the concept of slipping something into a bill at the last minute without any sort of guidance. That's how we got CRA a couple of years ago, that's how we got the wonderful Interchange Reduction Act, If we do get taxation, I'll have the hat trick of bad legislation.

I don't think you could ever do enough to prevent that and there's going to be a lot of different forces that are going on because it's not just those other lobbyists that are working at it. There are people in the government that are actively working on that. I think the CFPB would love to see more regulation of credit unions; maybe not the taxation thing directly, but certainly more control.

Looking in the Cushions

I do think that that is a concern for next year. The government's is going be looking for change in the cushions, they're going to be looking for money wherever they can get it and credit unions can be a convenient place to look.

I think the biggest defense, though, is just do what you're supposed to be doing you. If credit unions do what you do, legislators see that, they hear about that. If all credit unions were to do that I wouldn't hear that comment about big credit unions being just like banks.

Missing the Mark

Franklin: In looking at where we are missing the mark I think it really is about working with our communities across the board. It’s about financial education and financial literacy and how do we help our credit unions educate their members in such a way that we see it coming back around, that we see them making the wise decisions, the wise choices. An educated person is an empowered person.

Whenever we know something about a topic or we just have gone through a class we want to encourage everyone else; we tell everyone, we bring them aboard, we bring them in with us, we become empowered. I just think that that is such an important piece of building that community not only financially, but educating them. Again, they're building great communities because they're making a choice.

Telling the Story or Coming up a Chapter Short?

Sultemeier: Are we doing enough, are we telling the story?

Sattiewhite: I want to keep the glass half full, so I don't think we're falling short, I think we're just moving slow, we're sluggish. What I'd like to see us do is I'd like to see us turn the notch up a little bit, we need to step it up.

I think in terms of the advocacy piece, we as a credit union movement need to come together…and agree we have to save our small credit unions—those under $100 million--but we also have to be in step with one another. Until we do that we're not going to find success.

Losing the Collaborative Spirit?

Sultemeier: That’s another fear of mine, and I could be off base, but it feels like we're losing a little bit of our collaborative spirit. (The audience murmured in agreement.) It feels like everyone's kind of wrapped up in their own problems and, trust me, I've got problems, but it just feels like we're not as available maybe as we once were, and that's a real shame.

When I got into the business almost 25 years ago, and coming from the for-profit startup world, I was like, “What do you mean I can call up such and such a credit union and they'll kind of open the kimono for me and tell me exactly what they're doing? That blew my mind. The more I experienced it the more I kind of had a little sip of the Kool-Aid and then I had a great big gulp of it. Twenty-five years later I can't imagine being anywhere else, but it just feels like we're losing maybe a little bit of that.

Sattiewhite: My challenge would be for all of us to drink the Kool-Aid again. Go back and drink the Kool-Aid and bring somebody with you.

What Else Can be Done?

Sultemeier: I'm going to pivot into the final question: What else could we be doing? What are the opportunities where credit unions could lead on this?

Sattiewhite: For credit unions under $100 million, in the first week of April I am going to bring together anybody who says they want to solve for small credit unions. I'm tired of us talking about it. I say we take three days in Atlanta and we make it work. Navy Federal is on board to be a sponsor, Mastercard is on board to be a sponsor. I say let's get it done . So, I'm going to need 10 small credit union CEOs to show up. If you're interested, let me know, but the rest of you are welcome to come.

Boosting Financial Lit

Franklin: We were at (the California and Nevada Leagues’) REACH Conference this week and they had their competition where they were bringing in different employees from credit unions and pitching their ideas to the panel of judges. I'd say probably over half of them, if not more, were all based on financial literacy and education across the board. I think that's a big opportunity for us to be out there in the community really educating them and really showing them those wise decisions and what they can do.

I think it goes back to what (Origence CEO) Tony Boutelle always says, which is “We go where credit unions go.” We want to be part of it.

Actually Building Awareness

Kane: I will go with the awareness and consumers knowing about credit unions. We went through this whole thing with America's Credit Unions kind of leading the “Open Your Eyes” campaign, which spent a lot of money and probably moved the needle a little bit--but it really hasn't. We're talking about the different generations, the younger people and I would throw my kids into this mix. They love the idea of a credit union, they love the concept, they love the mission, and there's all sorts of people that want to do something like that—but they don't even know that credit unions even exist. How do we get how do we get that to change?

One of the things we started a couple years ago was this “I Love My Credit Union Day” because I was like, OK, we’ve spent a bunch of money with this Open Your Eyes (campaign), but I don't know how much it did. This is a free way of doing it to try to get that message expanded out there. We started something we called CU Kind Day in Illinois that's now being done by seven different leagues that is a single day where people are doing things in their communities, things that they were already doing anyway, but we are trying to get some publicity around it, because consumers in the world and consumers in the U.S. love the notion of a credit union, they just don't even know that they're there.

Need for Simplicity

Part of that, too, is the technology, the simplicity and all that kind of stuff that's not there yet. So, I think that's another big thing that we have to figure out: how to get there to make it easy for people to join and do business with the credit union?