By Denise Wymore and Lou Grilli
Background: In March of 2016 CUNA’s affiliated credit unions voted overwhelmingly–43% of its membership with more than 90% voting in favor–of a new membership model that gave CUs the option of belonging to the traditional CUNA/league model or individually to either CUNA or their league.
In addition, today any credit union in the U.S. can choose which league to affiliate with by paying dues. According to CUNA this “modernizes” the membership model. As a result, many leagues have voted to merge.
Below, the two authors debate whether these league mergers are good or bad for credit unions.
Grilli: The North Carolina and South Carolina leagues merged in 2014. The Pennsylvania and New Jersey leagues have now merged. The League of Southeastern Credit Unions, already the merger of Florida and Alabama leagues, recently voted to approve a merger with Georgia Credit Union Affiliates. And many other consolidations among leagues has happened prior. Are you saying that this is a bad thing?
Wymore: At the Underground Collision in Las Vegas last November, Randy Karnes, CEO of CU*Answers, made the observation that an industry that has no new businesses starting up is doomed. Given that, these league mergers are just keeping the industry from dying sooner, rather than making it grow. Rather than having 50 state leagues focusing on local issues, networking, education and building shared services, I see a trend towards more “national” trade associations that will compete with CUNA, NAFCU and NASCUS, diluting our message even more in Washington. To what end? It feels like the beginning of the end.
Grilli: The industry is not dying, as you may believe. The number of members is growing, loans are growing, assets are growing. I will grant you that leagues have changed their mission away from helping new credit unions start-up. But league consolidation increases networking opportunities, collaboration and camaraderie more than ever before.
Wymore: Yes, there is more networking for the big credit unions, but the small and remote credit unions get left behind.
Grilli: How so?
Wymore: When a league is just statewide, the annual conference is held in-state, and staff from even smaller credit unions can drive in for a few days. With large mergers, such as California and Nevada or the merger of the Washington, Oregon, and Idaho leagues, that networking opportunity becomes more costly and in many cases out-of-reach for smaller credit unions that cannot afford travel budgets.
When I worked for a credit union, the president of our state league made it a point of visiting every single credit union in the state at least once a year. That’s a lot of driving. But because of this, the league had near 100% affiliation. That just doesn’t happen anymore in the multi-state mega-league territories.
They also focused on creating other sources of revenue and not being too dependent on dues dollars. They had two national programs that brought in revenue and helped them weather economic storms. I asked a very respected credit union lifer who wished to remain nameless what he thought the purpose of the state leagues are today. His answer: “To save executive’s salaries.”
Grilli: But Denise, you’ve got to admit that a bigger league can be a much more powerful voice when it comes to lobbying on behalf of all the credit unions in those states, whether the credit union is a member or not. So even smaller credit unions benefit.
Wymore: I don’t believe bigger is better. It is the role of CUNA and NAFCU to be an advocate at the national and federal level. The leagues have advocacy responsibility at the state level. But multi-state organizations can lose their focus – they don’t always stay crisp when it comes to each state’s individual agendas. They can become engrossed in building a business of providing shared compliance services, or data analytics services, or portfolio growth solutions–not that we don’t need such things. This can be at the expense of active chapters, great lobbying efforts, education, or other functions that leagues were intended to provide, and which is often still needed today, maybe even more so.
The Last Word: There are fewer than 25 individual state leagues remaining – the consolidation of leagues Is more than a trend. But merging leagues should continue to focus on state advocacy, encouraging and helping to create new credit unions, while helping small credit unions grow, and not make the merger about creating new profit centers.