5 Strategic Issues to Discuss with Your Team

Jay Johnson outlines five key operational and strategic topics that credit unions across the country are debating in their Board rooms.



The past 24 months have broadened the horizons of most management teams. The pressures of the economy, regulatory reform and the changing dynamics of financial services competition are forcing more conversations that focus on the external influences of performance.

These conversations are anything but straightforward, with multiple interpretations of events. Is greater regulation a threat or an opportunity? Are other credit unions’ balance sheets evolving in the same manner as our balance sheets?

These are conversations that Callahan & Associates helps facilitate with credit union management and Boards for both large and small credit unions. Jay Johnson, executive vice president of Callahan, sat with me on Friday to discuss five key operational and strategic themes he is hearing in his work with credit union Boards and management teams. These are:

  1. A changing credit union business model. A decade ago, non-interest income was just 11% of total income; today, it’s 23%.
  2. A return to conservative borrowing habits. Consumers are once again returning to normal savings levels between 6-7% of disposable income.
  3. The changing payments landscape. Regulation may limit two of the main sources of non-interest income (debit interchange and overdraft fees), and competition in mobile payments is heating up.
  4. Mergers as a strategic choice. Contrary to the impression given in the media, the total number of mergers is down both in number and as a percent of total institutions. However, we are seeing more “strategic mergers” between institutions.
  5. Regulatory pressures are increasing. It’s easy to view all regulation as bad, but credit unions are treating the changes as an opportunity to market the credit union advantage.

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