Small CUs Seek Ways to Work Together

Avoiding mergers or liquidation may require greater cooperation.

June 17, 2013
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The survival of small credit unions in the future may depend on their ability to work together.
 
They must form networks to share information and resources, and form partnerships, according to industry leaders at the 2013 Annual Conference of the National Federation of Community Development Credit Unions in Baltimore.
 
These networks come in many forms, including those organized by service providers, leagues, or credit unions—all with the goal of avoiding mergers or liquidation.
 
Service providers
 
“There is a place for small credit unions,” says Joni Brown, president of Service Center for Credit Unions Inc (pictured above, center).
 
Service Centers for Credit Unions contracts with about 20 small credit unions in Pennsylvania to provide services including data processing, staff training, loan processing, and basic office functions.
 
“I don’t want to see mergers—I don’t like to see you go by the wayside,” Brown says.
 
Credit unions can save money by sharing forms, office staff, and services through Service Centers for Credit Unions, Brown says. The company's largest credit union client has about $10 million in assets.
 
“We are not afraid of each other trying to steal members; we are helping each other,” Brown says. "That is the whole object, to share services.”
 
NEXT: League Support


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League support
 
Smaller credit unions may also be able to get specialized assistance from their leagues.
 
Members of the Pennsylvania Credit Union Association (PCUA) demand it, says Compliance Administrator John F. Kilduff. More than half of PCUA's member credit unions have less than $20 million in assets.
 
PCUA offers a variety of services to small credit unions, Kilduff says, including:
  • SCUNet, a small credit union network offered via the league’s website;
     
  • News and information specifically for small credit unions via a monthly electronic newsletter;
     
  • Mentoring, where credit union personnel can seek advice and help on various topics from their peers;
     
  • Discounts for webinars and conferences;
     
  • Compliance assistance through a program called Compliance Cavalry, which provides consulting, training, and policy reviews;
     
  • Financial grants through a foundation that awards up to $5,000 to assist with training, education, marketing, and other needs; and 
     
  • Face-to-face networking through the PCUA’s credit union chapters.
NEXT: CU Partnerships


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CU partnerships
 
Small credit union leaders have taken it upon themselves to band together and try to push back against the trend of mergers and acquisitions.
 
Three years ago, Joy Cousminer, president/CEO of $32 million asset Bethex Federal Credit Union, Bronx, N.Y., helped start an organization called We Care for Credit Unions.
 
"We watched what was going on with anger and fear,” Cousminer says. “As each credit union disappeared we said, ‘soon, we will be next.’ "
 
The alliance, which includes more than 30 New York metropolitan-area credit unions, brings credit union leaders together to collaborate. The organization is seeking 501c3 status to be able to work as a nonprofit that can receive donations.
 
Small credit unions must fight to stay alive—and they need to do so together, Cousminer says.
 
"Remember how hard it was to get your charter? That is how hard you are going to have to fight to keep your charter now," Cousminer says.