By Ray Birch
ALEXANDRIA, Va.—NCUA has changed its approach to supporting small credit unions that need assistance to grow and survive.
The agency has now moved away from its one-to-one consulting program in favor of an online tool that allows small CUs to choose educational courses that range from marketing to operations to strategic planning and access them 24/7.
Small credit unions need support. As CUToday.info has reported, the trend line has been consistent and long running, with the latest NCUA data again showing credit unions with assets of at least $1 billion claim the strongest growth in loans, membership and net worth, while CUs with less than $50 million in assets continue to show declines in loans, membership and net worth.
Martha Ninichuk, NCUA’s director of credit union resources and expansion, said the move to online support was made to reach more small credit unions with educational programs and allow them to access the courses when they have time.
“When the agency went through our latest realignment, we decided to go to more online assistance for small credit unions,” Ninichuk said. “We did not keep the consulting arm and have transitioned to online learning.”
Expanding Access to Resources
As CUToday.info previously reported, NCUA had been offering free consulting assistance from the agency’s Office of Small Credit Union Initiatives to qualified CUs. NCUA’s consulting program offered hands-on assistance and practical advice to help credit unions take advantage of opportunities in the marketplace. However, credit unions had to apply for the program or be nominated by someone, and then the agency selected the CUs with which it would work. The consulting services were provided for a six-month period.
Ninichuk said NCUA believes it will help more small credit unions with its new approach.
“The credit union can access the courses whenever they have the time and go through the program at the pace that fits their schedule,” said Ninichuk. “With the consulting program the examiner came on site and there was a finite amount of time in which the examiner could work with the credit union.”
Called the Learning Management Service (LMS), 2,141 credit unions had signed up for the free service as of June 30.
“You have to be a registered user, but once you are your credit union can access videos, webinars, online courses …,” said Ninichuk.
Introduced in 2017, LMS currently offers information and training on credit union system governance, operations, products and services and partnerships.
Answering Examiners’ Questions
“Those are the main topics and within each we have listed the various subject matters,” said Ninichuk, who noted that most small credit union are seeking help with strategic planning. “One of the nice things about LMS is that if you take a course and complete it, you receive a certificate of completion that you can show your board and even examiners, if they ask, for example, what you are doing about strategic planning.”
LMS also has courses for boards and supervisory committee members, including a series on succession planning.
“We are still only in the early stages of LMS,” said Ninichuk. “We are continuing to develop course curriculum. We have one person here at NCUA whose role is to build out these courses.”
Ninichuk emphasized that LMS is just one element of support that small CUs should be using. She said small CUs need to look for grants, what the leagues offer and what they can learn from other non-profits, adding that more small CUs can begin to prosper if they take the right steps.
Reduced Burden
She said that NCUA is also assisting small CUs with its grant program and has worked to make field of membership expansion easier for all CUs, including small credit unions.
“When we raised the asset ceiling for small credit unions to $100 million, that helped us reach more credit unions with targeted assistance and it has also relieved some of the regulatory compliance burden,” she said.
Martha Ninichuk
Ninichuck reminded that small credit unions, defined as those under $100 million in assets, represent 70% of the total number of credit unions.
“But it behooves small credit union management to make changes to their business model to flourish. Since I have taken on this role, I have had a lot of access to small credit unions as they are involved in the process of a merger. A lot of times I see the reason for the merger is they don’t offer the products and services required by their members.”
Another reason that many smaller CUs throw in the towel, observed Ninichuk, is due to the lack of a CEO succession plan. “So when the long-time CEO retires, as many are now, the board just decides to merge.”
Need to Work Together
Ninichuk said that more CUs need to work together to strengthen their competitive position. She said collaboration among small credit unions is critical to their success.
“We wish more credit unions could share resources and back office support,” she said. “Say one small credit union has a great collections officer, could they not share that person’s skills and salary with other credit unions? But we know it takes time to sort these kind of things out, and distance sometimes is an issue.”