Credit unions are good at what they do. But is that enough?
CUNA Chairman Mike Mercer used sports analogies to urge credit unions to secure their place in the future Tuesday morning at the America’s Credit Union Conference in San Diego.
“Good won’t be good enough,” said Mercer, president of Georgia Credit Union Affiliates. He likened the movement to good sports teams that make it to the playoffs but haven't yet won the big game.
“In some ways, being good is worse than being bad,” he said. “If you’re bad, you have the license to make change--big changes. If you’re good, it’s ‘well, let’s not mess with things,’ or ‘we’ll just work a little harder next year.’”
It’s not about the history of results but more about the attitude for approaching the future and doing “what it takes to win it all,” Mercer said.
Credit unions have had impressive victories, such as surviving the great recession in good shape, handling the “corporate network solvency problems without affecting public confidence,” being recognized by high profile consumer advocates, and being “named beneficiaries of the Bank Transfer Day uprising.
“But we’re having trouble winning the playoffs,” he said. “There’s not much noticeable gain in market share, we’re not that exciting to Gen Y or so they say, we’re burdened by regulation, we’re confined by internal capital growth rates, and we’re obstructed by banks, retailers, and Wall Street muscle in Washington.
“Does being good for decades keep us from doing what it takes to be great? Keep us from claiming big chunks of new market share? Keep us from leveraging the buying power of 90 million members?” Mercer asked, adding, “These will be the pivotal questions for our generation of leaders in American cooperative finance.”
In other countries, cooperatives are devoting themselves to the challenge of wealth accumulation for their members. “They are committed to empowering people through the development of cooperative business organizations,” he said.
“When I look at these other cooperative systems, it’s not just their results, which are spectacular. It’s the audacity of their vision for the future. It’s their attitude that ‘We’re going to solve big problems that make a difference to lots of people. Where will we choose to become the best? The unquestioned leader of the pack?
The “good won’t be good enough” frame of mind should also be applied to the CUNA/league support system. “The leagues and CUNA exist fundamentally to project influence outside the credit union world and to cause consensus inside.” Mercer said. “One can’t be done without the other.”
Without consensus, he said, “there can be no meaningful influence.”
The credit union system has been good for decades, Mercer said, citing accomplishments on share drafts, the tax exemption, expanded fields of membership, and member business lending.
Among other things, CUNA and the leagues have:
- Deflected Community Reinvestment Act regulations;
- Obtained carve-outs for most credit unions in the Dodd-Frank Wall Street Reform and Consumer Protection Act;
- Fixed troublesome provisions in the Credit CARD Act; and
- Turned back the Internal Revenue Service’s unrelated business income tax.
There’s enough good to rationalize any degree of resistance to change, he added.
“There are still formidable players that can roll us under the right circumstances: trial lawyers, retailers, Wall Street interests, insurance lobbyists, and others,” Mercer said. “I don’t think the banks can roll us, but they have had some success in blocking us. Generally, credit unions are respected in government, but not feared.
“We can’t play at the same level by working harder using the same techniques. The trend toward fewer and larger credit unions is changing the dynamics of consensus formation inside the credit union world. Like credit unions, CUNA and the leagues will have to embrace a strategic perspective grounded in the conviction that ‘good’ won’t be good enough.”
New structures that foster greater interdependence--not independence--should be designed for the future framework of consensus building, Mercer said.
To that end, he praised CUNA CEO Bill Cheney's initiative to develop a longer term strategic vision for the CU system, which Cheney outlined in his remarks to the ACUC the previous day.
The credit union movement should cultivate big ideas that address major problems affecting millions of people and embrace metrics for evidence of success. Credit unions should aim for nothing less than being the premier financial partners for American citizens.