By Ray Birch
FORT WORTH, Texas—What will be the “secret sauce” that helps more small credit unions thrive? Lilly Newfarmer thinks the new group she’s leading will find that answer in the coming months.
As CUToday.info reported, female CEOs from credit unions with assets of less than $300 million have come together to launch the Credit Union Women’s Leadership Alliance (CUWLA).
The goal of the organization, explained Newfarmer—president and CEO of $106-million Tarrant County’s Credit Union and founder of the CUWLA—is to create a “critically important” support system for women leaders of small CUs and to share best practices, offer opportunities for mentorship, and more.
As CUToday.info has also extensively reported, the credit union movement is increasingly comprised of the haves and have-nots, with the nation’s credit unions claiming the lion’s share of the industry’s growth, while small credit unions—many of them run by female CEOs—are losing ground.
“We don’t have the answers yet,” said Newfarmer, about what it will take to ensure the success of small credit unions. “But there is a big need.”
Newfarmer, CUWLA’s initial board chair, said it is too soon for the group to get its arms around what it will take to do more than just prop up small credit unions.
“I think there are nuggets out there,” said Newfarmer about what the group’s members can learn from each other. “Once we really start digging, we're going to find out. We’ll start out just scratching the surface, but I think there's going to be something that comes out of this.”
Trusted Support System
Newfarmer emphasized CUWLA’s objective is to help women running smaller CUs access a trusted support system.
“I believe smaller credit unions are the backbone of the credit union movement,” said Newfarmer.
What led to establishing CUWLA, explained Newfarmer, is all of the discussion going on in the industry about the plight of small credit unions, and the knowledge that many are run by women.
Lily Newfarmer
“One day I was just listening to some of my female CEO friends from much larger credit unions, who belong to a network that's been created to support larger credit unions,” she explained, noting they were discussing how their network was helping them professionally and personally. “I kept hearing those things but I was not part of that conversation because I wasn't part of a larger credit union. I just kept thinking that there are a lot of women who run smaller credit unions, and that they really need this type of support system.”
More than a Conference
In the absence of a support system for female leaders of smaller credit unions, Newfarmer said she initially considered a conference for like-minded CEOs.
“But I didn’t want to just do that, so I kept rummaging around in my mind about possibilities,” she said.
While Newfarmer said she understood women who run small credit unions could benefit from interacting with leaders from larger credit unions, as they often have many of the same challenges, such as regulatory and compliance burdens, she knew that was not the answer.
“I understood that those of us who run smaller credit unions have unique sets of challenges,” she said. “We do not have the economies of scale of the larger organizations.”
Too Many Hats
More important, and perhaps one of the biggest challenges facing women who lead small credit unions, is they wear too many hats, Newfarmer said.
“I talked to one of our founders the other day, she's at a $13-million shop, and she said she hires, fires, does payroll and HR…,” said Newfarmer. “I have friends who run larger credit unions, and while they may be responsible for those things in their credit unions, they don’t have to physically do those tasks.”
Newfarmer believes wearing too many hats does not allow leaders of small credit unions to have the time they need to spend on forging a strong path toward the future.
“That just makes it so much harder to be strategic, which is what is really needed for growth,” said Newfarmer. “That is the biggest challenge, just being able to focus on growth.”
Newfarmer said she hopes the Credit Union Women’s Leadership Alliance will lead to greater collaboration among leaders of small credit unions, sharing IT and other back office talent. She also hopes it can lead to greater discussion around the effective use of capital.
A Difference With Capital
Newfarmer acknowledged many small credit unions sit significant levels of capital, saving it for a rainy day.
“But 20% to 30% capital does not mean the same thing at a $50-million shop as it does at a $500-million credit union,” emphasized Newfarmer. “You take two or three really big hits as far as charge-offs at a small credit union and that big capital cushion is gone, and pretty quickly.”
CUWLA plans to discuss ways to better use the capital small credit unions have to focus on growth, instead of holding it all back, according to Newfarmer.
Another restraint on small credit unions: the inability to attract and retain top talent, stressed Newfarmer, adding boards of small CUs must recognize they have to pay for more of it.
“The CEO role has changed so dramatically over the years that you have to pay for talent,” said Newfarmer, adding that does not mean promoting from within all the time. “I think boards of small shops are starting to realize this and we are starting to move the needle here.”
A ‘Safe Space’
Newfarmer believes talking about all of those issues and others together in a “safe space” will lead to greater change within small credit unions and lead many more down the path of greater growth.
“This is ultimately about sharing best practices—what works what doesn't—and fostering collaboration opportunities,” said Newfarmer.
CUWLA started this year with 13 founding members, and Newfarmer thanked CUNA and CUNA Mutual Group for their support.
“I would say there's maybe 2,000 female CEOs in the U.S.,” said Newfarmer. “I would love to eventually get 50% to 60% penetration of that, with all of the members saying they are getting their money’s worth from the couple hundred bucks a year it takes to be part of this.”
The Organizers
In addition to Newfarmer, other organizers of the CUWLA include:
- Linda Bodie of Element FCU, Charleston, W.V.
- Amy Brodersen of Family Focus FCU, Omaha.
- Debi Keesee of Spokane Media FCU, Spokane, Wash.
- Maria Martinez of Border Federal CU, Del Rio, Texas
- Winona Nava of Guadalupe CU, Santa FE, N.M.
- Jan Page of Community South CU, Chipley, Fla.
- Carma Parrish of NorthPark Community CU, Indianapolis.
- Tammy Passifume of Diamond Lakes FCU, Hot Springs, Ark.
- Teri Robinson of Ironworkers USA FCU, Portland, Ore.
- Lynette Smith of TruEnergy FCU, Springfield, Va.
- Heather Walter of Advanz CU, Louisville.
- Linda White of Upward CU, Burlingame, Calif.
For info: www.CUWLA.org.