By Ray Birch
PALM COAST, Fla.—Strong succession planning, finding a niche and simply having the fortitude to not raise the white flag are just some of the strategies that will help small credit unions in their fight to remain in business, experts have been telling CUToday.info.
Over the past year CUToday.info has regularly featured reporting aimed at responding to the challenges in front of small credit unions—the have-nots in an industry in which the very large credit unions account for the majority of the movement’s membership and overall growth.
But that reporting has also highlighted how some smaller CUs have bucked the trend, driving record loan growth and effectively responding to pressures to reduce or eliminate overdraft fees.
Experts agree there are no simple answers to solve the challenges facing small credit unions, but, in the following stories, they offer advice and address many of the issues facing small CUs:
SANTA ROSA, Calif.—The CEO of one small credit union is urging leaders of similar-size operations to not raise the white flag and merge out, but instead focus on a niche in which they can grow.
'Don't Give Up. Start, Instead, With Planning'
LITTLE CANADA, Minn.—The pace of small credit unions merging out doesn’t need to be a swift as it has become, says the leader of one $41-million cooperative, who contends too many tiny shops simply give up and don’t try to continue once the CEO decides to retire.
It's The Right Opportunity, Says CEO
ALBANY, Ga.—In a rare move, one small credit union has merged into another even smaller CU, and the leaders of both organizations say the cooperative spirit—and the right opportunity—are primary reasons.
Mergers, Payouts & The Ethical Quandary
LAKE TAPPS, Wash.—It’s become an ethical question for the aging CEOs and managers of many struggling credit unions, according to one person—do they seek out a merger in order to provide members with more services, or do they hang on until they get paid?
WARNER ROBBINS, Ga.—It is as much a David and Goliath battle among financial providers as ever, but it’s a fight that small CUs can win if they have the right sling and stones, according to one small credit union.
Succession Planning Proposal Raises Issue
BIRMINGHAM, Ala.—NCUA’s new proposed rule on succession planning could lead to issues for credit unions—including driving more mergers among small credit unions, even though one of the agency’s stated goals is to slow the pace of those combinations, according to Dennis Dollar.
Trend Puts More Pressure on Smaller CUs
LAKE TAPPS, Wash.—As the number of credit unions eliminating or reducing overdraft fees continues to rise, will the trend also lead to more small credit unions merging out?
A Lending Boost For Small CUs?
NEW YORK—The number of credit unions expressing interest to one company over buying loan participations is increasing, fueled by smaller CUs seeking to increase their own lagging loan numbers.
13% Loan Growth During Pandemic
LONGVIEW, Wash.—One small credit union is reporting that in just a year it has been able to go from a shrinking loan portfolio to 13% loan growth, while boosting stagnant membership growth to gains of nearly 7%. And it has done so by blowing up boxes, both literally and figuratively.
Another Tough Battle For Small CUs
MADISON, Wis.—One credit union is forecasting that as the economy recovers from the pandemic many CUs will have little choice but to increase wages in the war for talent, adding it's a battle small credit unions will have a tough time winning.