Wow, Sam…what an interesting, challenging situation!
Essentially, you have two basic options: Continue…or…Merge.
First, merging is OK! Nothing too devastating will happen. If you decide to merge, now is time to search out a merger partner for an orderly turnover of the operation. The very worst is that some employees lose jobs. In any case, your members will be covered and the world will go on. The raw reality is that we’ll see many more mergers; the number of credit unions will dwindle . . . dramatically.
But wait — CWCU, with 50,000 members, is the 338th largest credit union in the country, out of 7,000+! You’re healthy in terms of business with members – an $8,500 average deposit balance is well above the national figure! And you have solid reserves – more than enough to open some new branch offices in your community, and to introduce the “new” CWCU to a broader membership base. This is all ample basis for a healthy, prosperous future!
But you (and every other CU in the country, actually) must seriously reassess your purpose, and restructure much of your thinking if you hope to “make it” in the months/years ahead. Why? Our market is vastly over-supplied. Competition is ferocious. The last thing we need is more places to do banking.
What the market does need . . . today more than ever . . . is more of the value-added function of help and assistance,delivered in an easy, user-friendly context that can truly make a difference for members. This is the role credit unions played from the start . . . primarily concerned with people and their respective financial circumstances and needs. Because we credit unions have worked hard to compete with other banking sources – as our marketing and selling skills increased – we’ve let this particular focus slip away in favor of selling “products.” We’ve become too much like banks!
The help-and-assistance factor is what sets credit unions apart. The challenge, for all of us, is recommitting to this intention and using it to set credit unions apart on the competitive spectrum . . . and of seeking ways to go at this in a more skilled, more aggressive, more state-of-the-art manner, with absolute conviction and determination.
This is the basis for going broadly afield in an attempt to win people to your door. If not this, why should people want to change their well-established connections and come running to get your versions of what they already have?
Now, what will it take to get from here to there? First, do some serious soul-searching with your Directors. Do they have a strong – driven – sense of purpose, a sense of purpose that commits to helping members get ahead financially? That’s the key element for success. This, we know from our research studies, is what the market is looking for.
Some assumptions: You can shift to off-base facilities and not lose too much operational momentum, so you’re likely to hold, rather than lose, the large majority of your members. The likelihood of a charter expansion offers potential for growth.
We want to know: How many members have checking accounts with you? How many with paycheck/direct-deposit? How many have two services, three services, four or more? What are their habits, inclinations, perceptions? How much banking do they do with CWCU, how much elsewhere? How do they view the credit union: modern, “with it,” basic, safe, dynamic, fantastic or what? (Thus, do you have a recent membership survey?)
Replacing existing branches: You have reasonable options. In fact, reconsider your entire service delivery strategies in favor of technology-based systems. Put as much effort and resources into your Internet presence as you would a new branch.
Aspire to a down-the-road plan of attracting/merging other credit unions into yours. The advantage is economy of scale.
So my recommendation: If your people have a strong sense of what the role of a credit union should be in what has become a very competitive, very challenging market, go for it! You have the strength in terms of established operation, ample resources, good will, and significant operational momentum. Building your new credit union will be different from past times. It will be challenging. But it could be, should be, very satisfying, very fulfilling, even very exciting. And you should be tremendously successful. This is what our industry desperately needs to see happen. You have every opportunity to help to make it so.