How To Increase Diversity And Inclusion In Credit Union Land

Thirty-three years after the first Martin Luther King Jr. Day celebration, discrimination, immigration, and equal pay continue to fuel policies at credit unions, but more can be done.

 
 

Top-Level Takeaways

  • U.S. credit unions are working to advance tolerance, diversity, and inclusion in their hiring practices, workplace environments, and services.
  • Of the 81 federal credit unions that participated last year in the NCUA’s voluntary diversity self-assessment, 72% reported a commitment to diversity and inclusion.

CU QUICK FACTS

Arlington Community Credit Union
Data as of 09.30.18

HQ: Arlington, VA
ASSETS: $ 324.2M
MEMBERS: 21,911
BRANCHES: 4
12-MO SHARE GROWTH: 7.9%
12-MO LOAN GROWTH: 19.1%
ROA: 0.34%

Thirty-three years ago, President Ronald Reagan signed into law the Martin Luther King Jr. Day legislation. Today, the federal holiday serves as a day of reflection on the soul of America. For their part, credit unions across the nation are working to advance tolerance, diversity, and inclusion in their hiring practices, workplace environments, and services.

Last year, Arlington Community Credit Union ($324.2M, Arlington, VA) offered special loans to help Deferred Action for Childhood Arrivals (DACA) “Dreamers” with citizenship expenses. Three employees of the credit union are Dreamers, and the immigrant community became a rallying point for the whole staff. 

Amy Thomas, Chief of Staff, Arlington Community Credit Union

“Things happening in the world are impacting us at work, and organizations should be talking about it,” says Amy Thomas, chief of staff at Arlington Community Credit Union. “I think many organizations feel like they can’t handle every possible situation. They don’t want to say the wrong things, so it’s easier to not say anything at all.”

Illustrating the point, Thomas attended a Callahan Executive Roundtable in 2018 and asked colleagues about diversity and inclusion strategies. None of the credit unions, including her own, had a formal program. 

“I was surprised,” she says. “None of the credit unions was actively addressing this or taking it on as an initiative.”

 

 

 

In fact, it was just three years ago that the NCUA become responsible for assessing diversity policies and practices at federally insured credit unions as part of the Dodd-Frank Act. The NCUA board adopted a policy and rolled out a voluntary diversity self-assessment tool. Results of the assessments are analyzed in aggregate by the NCUA’s Office of Minority and Women.

Tracking Progress Across The Industry

Diversity And Inclusion Strategies

The NCUA’s Annual Voluntary Credit Union Diversity Self-Assessment includes more than 50 criteria for evaluating diversity and inclusion in areas such as:

  • Organizational commitment.
  • Employment practices.
  • Supplier diversity.
  • Transparency of organizational diversity and inclusion.
  • Ongoing self-assessment.

“Credit unions, who have historically operated on the principle of people helping people, have organically embraced diversity and inclusion,” says Monica Davy, director of NCUA’s Office of Minority and Women. ‘People’ is not preceded by an adjective. It is not, for example, ‘old people helping old people’ or ‘young people helping old people.’ It is simply ‘people helping people.’”

Last year, 81 federal credit unions participated in the voluntary self-assessment, up from 35 participants in 2016. 

“We are reviewing feedback from the 2018 self-assessment,” says Monica Davy, director of NCUA’s Office of Minority and Women. “In 2017, credit unions reported having a leadership and organizational commitment to diversity and taking steps to implement employment practices to demonstrate that commitment.”

According to the agency’s most recent annual report to Congress, 72% of participating credit unions reported “leadership and organizational commitment to diversity and inclusion,” and 71% reported “proactive implementation of employment practices that expand outreach efforts to minorities and women, or other diverse individuals.” However, only 26% said their credit union promotes the “transparency of diversity and inclusion practices,” and only 7% consider the “practices of supplier diversity in procurement and business practices.”

“We have not measured the prevalence of formal D&I programs in credit unions,” Davy says. “But we see growing signs of their commitment, such as displaying their D&I policy and posting D&I videos and staff profiles on their webpages.”

Based on feedback from the 2017 assessments, the NCUA co-hosted a diversity and inclusion summit with other federal financial regulatory agencies in 2018 and published the Credit Union Guide to Supplier Diversity

“Other credit union organizations, including leagues and others, have resources, training, or conferences that address D&I within the industry,” Davy notes.

The Changing Face Of Diversity

NCUA Voluntary Assessments

The number of credit unions that have shared the results of the NCUA’s voluntary diversity self-assessment is small but growing:

  • 2016: 35
  • 2017: 64
  • 2018: 81

Source: NCUA Office of Minority and Women

The NCUA’s definition of diversity covers “a broad spectrum of characteristics including race, skin color, ethnicity, national origin, gender, age, religion, language, disability, sexual orientation, gender identity, socioeconomic status, family structure, geographic differences, diversity of thought, life experiences and more.” The agency defines inclusion as “cultivating an environment that connects each employee to the organization; encouraging collaboration, flexibility, and fairness so that all individuals are empowered to participate and contribute to their full potential.” 

Over the past two years, Arlington Community Credit Union has incorporated diversity discussions into its annual Thanksgiving celebration. It has asked employees to bring personal artifacts that represent their backgrounds and heritage, including baby pictures, ethnic clothing, and hobbies.  

“It created a great dialogue among staff and a deeper knowledge for us about the importance of inclusion and the fact that we all have unconscious bias,” Thomas says. “We found Thanksgiving is great time to do something like this, and we learned there are more things that unite us than separate us.”

But creating a more diverse and inclusive culture not only promotes fairness in a credit union’s workplace, it also supports the organization’s goals for growth.  

In 2016, Harvard Business Review reported on research that indicates businesses that place a priority on creating a diverse, inclusive workplace also experience better internal decision-making, greater staff motivation, improved customer service, and higher employee retention — all of which can lead to improved financial performance. 

Spotlight On Leadership

Credit Union Diversity

According to the NCUA’s March 2018 diversity report to Congress, a sample of 1,139 employees across 64 credit unions displayed the following breakdown:

  • Men: 55.7%
  • Women: 44.3%
  • White: 72%
  • All Minorities: 28.0%
    • African American: 15%
    • Asian: 6.4%
    • Hispanic: 5.1%
    • Native American: 0.7%
    • Multiracial: 0.8%

The 2018 NCUA report also touched upon diversity within industry leadership. Women accounted for 64% of CEOs and senior leaders in credit unions with less than $100 million in assets but only 13% of leadership teams at credit unions with more than $1 billion in assets. That trend shows signs of changing, however, with Mary McDuffie taking over in January 2019 as CEO of the industry’s largest credit union, Navy Federal ($95.3B, Vienna, VA). 

Arlington Community, led by CEO Karen Rosales, has two women including one African-American on its five-member leadership team. The Washington, DC, area has a diverse ethnic and cultural makeup, Thomas notes, so developing a staff that reflects the diversity of the membership isn’t too difficult. 

“The real challenge is inclusion,” Thomas says. “That’s where I feel we can do a better job. Whether it’s how we recruit, how we interview people, or what types of programs we put in place, we have a tremendous opportunity to help people feel connected to the organization.”

Communication And Culture

According to Thomas, communication is key to a culture of inclusion. To that end, Arlington Community Credit Union recently launched a weekly newsletter, In the Know, that informs employees of project updates, cultural events, and training and development opportunities. It complements the credit union’s intranet site that offers polls and discussion boards on which employees comment and ask questions.

“We want our people to connect with us and feel like a part of us,” Thomas says. “How you communicate, the messages you send, and how you make decisions is important. We do a lot of staff surveys to get their perspectives. Different groups meet with leaders to share ideas so leadership can get a greater understanding from the ground troops. That definitely helps with inclusivity.”

As Dr. King noted to followers in 1964,  “We must learn to live together as brothers or perish together as fools.” HR managers and credit union organizations must continue to address diversity and inclusion as 2019 unfolds and beyond. The question is, how will they? 

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Jan. 22, 2019


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