Collaboration isn’t just about playing nice. It’s about survival, and it’s a good thing a lot of credit unions are finding multiple ways to get good at it.
That was the main takeaway on Sunday as American’s Credit Union Conference got underway at Caesars Palace in Las Vegas, NV.
Angela Prestil, CUNA’s director of business development, led the Small Credit Union Roundtable. Instead of presenters, this year the roundtable was just that: discussions at each of the tables, with ideas then shared with the whole group.
“Small credit unions have the advantage of being able to know your members in ways the bigger financial institutions usually can’t,” Prestil told the group. She then posed two questions: “What are you most proud of that you’ve accomplished in the past 12 to 18 months,” and “in what ways have you collaborated with other credit unions.”
A single answer often served for both questions: What several respondents saw as significant accomplishments was the collaboration that was enabling them to serve members better and in new ways.
For instance, Edwin Williams, president and CEO of Discovery Federal Credit Union, ($133.2M, Wyomissing, PA), says sharing an experienced commercial loan officer with another credit union through a Philadelphia-based CUSO has helped Discovery make a mark in member business lending.
“We got into it in 2008, so our timing was excellent,” he says. “The banks around us wouldn’t lend to anyone unless they needed $5 million or more. Need $100,000, $200,000? They wouldn’t touch you. That’s where we came in,” he told the group.
Discovery’s MBL portfolio as of first quarter 2017 is $12.6 million, compared with $5.4 million on average for the 732 credit unions in the $100 million to $250 million asset group in the Callahan & Associates database.
Discovery also uses its CUSO partner’s services for mortgage lending, like many other credit unions, but Consolidated Community Credit Union ($220M, Portland, OR) adds a twist to the usual collaboration story.
Marketing manager Jeff Berard says CCCU is now collaborating on mortgage services with a couple dozen smaller credit unions in Oregon, Washington, and Idaho. Those credit unions take the applications and CCCU does the heavy lifting, from underwriting to brokering the loans into the secondary market if necessary.
“We’re just taking one of our strengths, sharing it, and riding it,” Berard says. “We now have more mortgage loan officers than consumer loan officers.” He adds that this is not a CUSO but that it might need to become one eventually.
Meanwhile, Fort Community Credit Union ($234.7M, Fort Atkinson, WI) is helping the movement at the core, helping to pay for research and development at Datamatic Processing that smaller credit unions on the same platform can then utilize for themselves.
“The $30 million shops have a lot of the same issues we do, and we’re happy to work with them on it,” says Fort Community president Susan Johnson.
Compliance is another big area for collaboration. A number of CUSOs have popped up to help with that specialty, and the interest is high. Prestil, the CUNA business developer, says that 18 months after its launch, the online CUNA Compliance Community now has 3,500 members and 70,000 uploaded documents.
The New York Credit Union Association, meanwhile, currently has 14 credit unions paying about $10,000 to $15,000 a year to share a compliance officer through the NYCUA
“That’s a real savings for them for much-needed expertise they couldn’t afford on their own,” says Ron McLean, the league’s SVP and chief engagement officer. “It’s great to hear about such solid best practices among credit unions like this.”
Collaboration and core values also loom large at Tarrant County’s Credit Union ($85.1M, Fort Worth, TX), where president and CEO Lily Newfarmer says building on those principles as a foundation is the only way for smaller credit unions to survive. That’s what’s happening in her shop as they launch a three-year plan to trim costs, build capital, and enhance member service.
“And really, we’re all small, when you think about it that way,” Newfarmer says. She says she’s fortunate to have a staff of “educated professionals that we farm out all the time to mentor other credit unions.”
“We have to collaborate,” Newfarmer says. “Our members don’t care that we’re small. We shouldn’t even really be saying that so much. We have to provide the services that differentiate us, and how well we do that is going to determine our fate in the next 10 years.”