By Ray Birch
LONG BEACH, Calif.—The CEOs of small credit unions frequently cite collaboration as a key to their future success, but many continue to express concerns around being pressured into a merger by the larger CU with which it is seeking to collaborate. The result: collaboration is inhibited.
That’s the stance of Christine Haley, CEO of the $77-million PostCity Financial CU, who told CUToday.info the pressure to merge has limited her CU’s ability to partner with other credit unions.
“A lot of small credit unions are afraid to collaborate either because their plate is full or because the market is full of a lot hungry, large credit unions,” she said. “There are some large credit unions in every state that I hear are always looking to merge in small credit unions. I think for that reason it limits collaboration.”
Haley shares her perspective at a time when the latest NCUA data show that last year lending and membership growth was negative in CUs in all asset categories below $500 million.
Haley compared the dilemma to a person being sick and needing to go to the hospital, but afraid to go in because they fear they may contract COVID-19.
“There’s a kind of line in the sand, and are you willing to cross it and take the risk?” she said.
Haley said early in her career she took that risk and was not happy with what she encountered.
“You tell yourself that at a certain point you have to collaborate,” Haley said. “When I first became CEO of this credit union I tried to start a Postal credit union CEO networking group. There were six or eight of us who got together, but there was this one CEO who every time I would see him he would ask, ‘OK, when are we going to merge?’
“I kept telling him to stop asking me that question and that my credit union was not going to merge,” continued Haley. “I got really frustrated. I was a young female then and I did not appreciate that. Well, I’m not young anymore, but that experience put a bad taste in my mouth regarding collaboration.”
Haley said she knows of many other small CEO leaders who fear “poaching” from larger credit unions brought on by collaboration; a fear many other CEOs have shared with CUToday.info.
Finding an Answer
How can the hurdle be overcome? Haley said the answer lies in building strong relationships with many credit unions—relationships the credit union knows it can trust.
Christine Haley
“But I think to do that you need to be much more intentional at reaching out to other credit unions,” she said. “You need to look beyond the borders of your local areas and state. I think when you do this and create trusted relationships you eliminate that fear factor of poaching.”
Haley suggested those relationships can be built first through small working groups.
“The California League’s Shapiro Group is wonderful. You can really connect with a lot of other credit unions,” she said. (The Shapiro Group was created to serve the needs of smaller credit unions.)
Haley emphasized small credit unions must cast a wide net.
“That means going to a lot of conferences and talking to a lot of people,” she said. “When you go to a meeting, you don’t have to reach out each time. You can just sit quietly and listen.”
Staying Connected
Another key to small credit union growth, said Haley, are strong connections with sponsor groups.
“I'm a single-sponsor credit union, so we have to stay well-connected with our sponsor,” she explained. “That means doing your site visits, having employees who work for the Postal Service serving on our board of directors…We have to be in front of them.”
The credit union, too, holds regular focus group sessions with Postal Service employees.
“We also have member ambassadors who work with us to provide us with insights about the needs of our overall membership,” Haley said. “And annually we hold our member appreciation event. Those are ways that we stay connected and remain viable.”
Haley said during the pandemic PostCity has tightened the connection with members.
“We started outbound calling very early in this health crisis,” Haley said. “We have been reaching out to every single one of our members to check in and see how they're doing. We are not only looking for ways we can help them get through this pandemic with our current products, but we also want to learn if we can develop something new.”
No Hail Mary
Haley has been leading the credit union for 20 years and acknowledged growth has been steady but slow.
“We are mindful that we don't have a Hail Mary pass we can throw,” said Haley. “We are not going to say let's increase fees $5 across the board. That's not how we're going to make our bottom line. We have 11.5% capital at this credit union and we're going to use our capital for a rainy day—and it has been raining this past year. We did two mergers in the middle of the last recession, and we came out OK. We're not looking to grow the credit union on the backs of our members. They're the reasons why we all come to work here—we’re working for them.”
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