LAS VEGAS–Groupthink is posing an increasingly larger threat to credit unions, according to one person.
Randy Karnes, CEO of Michigan-based CU*Answers, said he believes many people within credit unions feel they are “being herded” by pressures related to scale and compliance and other issues.
“And it’s all adding up to this sense of ‘I’ll never catch up. I’ll never get there. Technology is too hard. I will never get there’,” said Karnes. “Is that really the chorus that we want thought-leaders to say to our industry.”
Karnes said he has watched as many people who loved credit unions are no longer around, as some of their CUs couldn’t make it financially and other people simply lost faith.
Why Start a CU?
“Who has faith in de novos today?” asked Karnes. “Even in my own community, why the heck would they even want to do that? Thought-leaders would tell you any industry without new entries is dead. Is it easy to be a startup today? No, not at all.”
Karnes said he disagrees with those who suggest NCUA is not a thought-leader, although his disagreement is for reasons different than what some might expect.
“They may not be a coach you like, but they are a thought-leader. They tell us where we’re going,” he said. “And they tell us even though we have no voice in how they elect board members. It’s a bad game. I’ve seen no change in the way they elect the board since I got here.”
Karnes said even when there is thought leadership within credit union it is once again herd-like, typically around a theme such as CECL or risk-based capital.
Wasted Money
“We will have wasted more money on CECL and the bullshit seminars we sat through on CECL than CECL will ever save us,” said Karnes. “I guarantee we are going to get CECL. Yet over and over and over thought-leaders missed the chance to say,
‘Calm down, think it through, does it make sense?’ Technology isn’t that complicated and it always shows up for credit unions. I get so tired of people saying if we don’t do this we’ll be left out. Name one technology we’ve been left out of.”
Other Observations
Other observations made by Karnes:
“My point here is not that only the strong will survive. I know we all believe that,” said Karnes. “Why don’t we become the first to break with the ‘Strong will survive, the rich will survive.’”
- “NCUA is supposed to coordinate chaos. But they are coordinating chaos to the point there is only going to one of us someday.”
- “People know their topics, but I don’t know that we’re talking with an emotional smartness that serves us well.”
- “There is a sincerity we used have to have that we don’t have anymore, that of the consumer-owner, not agent careers.”