During a panel session titled “Courage” the CEO of one small CU said he’s “calling out the industry” and is “pissed off” at the direction it’s going. He was joined by several other people who had some similarly strong comments on what they believe is taking place in credit unions.

The comments came during a panel discussion that was part of Mitchell Stankovic’s Underground Thriller meeting. Participating as panelists were:

• Shellye Carpenter, director of partner relations with BALANCE

• Shirley Senn, chief consulting officer with CU Strategic Planning

• Scott Prior, president and CEO of Connection Credit Union

Barb Lowman, president and CEO of CUNA Strategic Services, who served as moderator, noted the definition of “courage” is the “ability to do something that frightens.”

To that end, she asked her fellow panelists how they see courage in credit unions and for future leaders.

A Holistic Look

“I think it’s important for credit unions of all sizes to look at our members holistically,” said Carpenter. “We need to see them for where they are and sometimes it takes courage to craft a solution when you're working with the member one-on-one that maybe is not part of your menu of products and services. Maybe it's a solution that has nothing to do with a loan or a second chance checking account. Perhaps the person is food insecure. How are we going to know that though unless we are courageous enough to ask questions?”

Carpenter said BALANCE, which provides financial counseling services, fielded 55,000 calls from CU members during 2023. Those are people who already know how to stretch a dollar, she observed, and they don’t need lectures.

Not Just Another Loan

“They need a solution that may be outside the box. Maybe they need a referral to an agency,” Carpenter told the meeting. “Look at them holistically; don’t see them as just another loan to put on the books or another checking account. We're really about people helping people but that becomes a cliche if we're really not looking at where they are and what they need. I think that does take some courage.”

CEO Says He’s Had Enough

For the CEO of one $38 million credit union in Silverdale, Wash., courage is about the leaders of smaller CEOs coming together to say they’ve had enough.

“I've been CEO for 14 years and there's a lot of us in the industry who are pissed off at the direction we're going,” said Prior. “We're not staying true to our credit union values and roots. There are a lot of us small ones that don't want to leave that path. We know that path is not good for us. I think it’s the courage to collaborate, and I mean true collaboration, not the hypocritical collaboration that our industry is full of.”

Lowman interjected and agreed, saying collaboration is not the “coopetition” that is so often heard.

‘Sick of It’

“I'm sick of it and the reality is I'm trying to get credit unions to join together and help each other,” Prior said. “We do things like putting on conferences, doing strategic planning, helping with vendor searches where we join together.”

Prior said he wants to challenge the narrative that, “You’re too small, you need to merge with me because I need to be a billion or five billion dollars in assets.”

He added his response to those larger credit unions seeking to merge in his 3,500-member CU is, “I don't want to join your bigness. That’s death to me. I can't make it there, but I can make it if I collaborate with other credit unions.”

Prior said he has seen a lot of former bankers come into credit unions as they have also looked to hire people away.

“I was with a community bank for seven years before I came into credit unions, so I understand the mentality, and they have no clue what collaboration really is,” Prior said.

Small CUs & Vendors

Prior pointed to what’s happening with vendors as an example.

“They’re going to where the big credit unions are because they've grown so fast and that's where the money is,” said Prior. “So, we get left behind with options that are shitty. We're kind of fighting back by saying there's going to be three to five credit unions and we're going to do this search together. We're going to do due-diligence together. We’ve kind of done that with loan participations. A lot of us are doing that in pockets. Our goal is to unite all the smaller credit unions across the country and do our stuff together. I hope the industry will join us but those that say, ‘Oh you need to merge out,’ you guys aren't part of that group anymore. As CEOs, we see that and we recognize that behavior really quickly now because there are a lot of predatory CEOs. I hope the industry can come along with us and figure out that collaboration is our superpower.”

An Example from the Volunteer State

Senn said she has seen the scenario described by Prior take place in her home state of Tennessee.

“When we look in our rural communities, in our underserved communities, in our inner cities, we're finding trends where credit unions are closing,” Senn shared. “We see larger banks and larger credit unions that are coming in and taking over those branches. Some are doing good, some aren't. Where I think it's really important is that every credit union member in every community has a voice and I, unfortunately, live in a community in Tennessee where this is very prevalent.”
A small credit union in her community merged with a larger CU and its branch closed, Senn said. Members are now referred to a 24/7 machine. There is a national bank and four community banks in the market, and every time a small business closes it is replaced by a payday lender, according to Senn.

Being Real

“We have to start looking and being real with ourselves. We have to understand that if we do not ensure these small credit unions survive, we're not going to have a credit union system,” said Senn. “It’s just my opinion, but if we're not careful we're going to see a dividing line. We're gonna see a portion of our credit union system taxed because they're acting like banks. Community field of membership does not mean the U.S. as community; it’s about who you're serving in your community, how you’re helping them and taking them on the next step in their lives.”

Something to Think About

It's a point Senn encouraged every credit union to think about when it comes to mergers.

“Without those small credit unions, and right now we've got about 3,000 that are under $100 million, we will literally be turning into a banking system,” Senn suggested. “We have to pay attention to this.”

And Another Thing…

Separately, Senn also told CU leaders that while some organizations have moved away from it, DEI is “not going away.”

“Those credit unions there are getting rid of their DEI departments and DEI officers are going to be the ones that are not in existence, because DEI also includes belonging and acceptance,” Senn said. “This isn't just about race. This isn't just about ethnicity. This is about disabilities, this is about LGBTQ, this is about prisoner reentry, this is about domestic violence victims. We are people helping people. Let's make sure that it's not just the people that we want to help. Let's make sure that it's everybody.”

Don’t Forget That Third Letter

Lowman agreed, saying credit unions have gotten “really good at the D and the E,” but not so much the I—inclusion.

“Without the I it really doesn't matter. It’s all about the inclusion,” she added.