Credit Union Culture: Cooperative or Cut Throat ?

Who is the Enemy At the Gate
In my capacity assisting credit unions with their Business Continuity planning, I have noticed a great deal of distrust among the credit union family. Many credit unions feel that their sister credit unions are their enemy.  While friendly competition should be the norm, the attitudes I detect seem to be of a much more cut throat in nature that contradicts the cooperative spirit of the movement.

While conducting training for the management team of one credit union, my suggestion of credit unions supporting each other in times of crisis was viewed as an anathema.  Sending the little old lady trying to cash her Social Security check to the main branch five miles downtown was preferable to setting up a mutual agreement with another credit union with a nearby branch to offer one teller space in the event of a crisis.

The Not So Cooperative Nature of Credit Union's 

Shouldn't “People Helping People” extend to “Credit Unions Helping Credit Unions”?  I certainly think so.  ALL credit unions should still be part of the cooperative network. Yet, too often many credit unions seem locked into “If Acme CU is bigger than me, they must be stealing membership from me!”  Though not a new development, it certainly seems to have gained momentum in recent years.  Perhaps it is an outgrowth of the community charter movement.  Perhaps it is as a result of the regulatory pressures brought on the management.  Perhaps it is fallout from the economic times.  Perhaps it is a combination of all three.

Credit Union membership shouldn’t be a zero-sum game!  Credit Unions don’t steal other credit unions members.  After all, unlike the NCUA thinking as they initially proposed their new corporate rule, real people can be a member of multiple credit unions without impunity.  People will become members depending on service, services, locations, and rates.

Credit unions should actively recruit new members from the population who don’t know the benefits of credit union membership.

We Need A "We Are the World" Moment

Credit unions should help each other out. We should embrace our common mission and unique charter and join together to help offset the enormous expenses we incur as smaller community based institutions. Mutual assistance should be le mantra de jour, not the exception.  How?  Here are a couple of simple examples to provoke some ideas:

• If one credit union’s branch is incapacitated, for whatever reason, other credit unions in the community could offer working space or teller space, especially if it were a mutual assistance agreement.  This is ideal if both use the same core systems.
• Consider supporting each other with staffing assistance.  Why pay the fees to temp agencies for temp staffing when another credit union might lend a person who’s already trained?
• Consider using staff from other credit unions to assist in facilitating Business Continuity exercises with inputs and role playing.  They could act as press, disgruntled members or members with off-the-wall questions to enhance the stress of the exercise.  They could also work as trusted agents assisting the exercise facilitator.
• What about some joint public events?—Sponsor a lunch & learn about credit unions; host balloons and ice cream event in the park for kids and young parents (potential members, right?); organize a pet parade to support the local animal shelter; provide staffing for the local public radio fund raiser.  OK, I may not be the most creative in the world, but you get the idea!

The Battle for Board Walk and Park Place

Like power hungry community titans in a real life Monopoly game some credit unions seem bent on owning all of Board Walk and Park Place and leaving only Baltic Avenue to their credit union neighbors. This credit union distrust seems especially intense where several credit unions share overlapping community charters.  Each credit union sees the same pool of potential members as “theirs" and as they seek to increase their membership they perceive themselves in competition for those members with other community based credit unions. 


This sense of competition can be a good thing.  It could force each of them to evaluate their mission, their service, and their approach to the various segments of the community.  Yes, even though they all have community charters, their potential new members are grouped into different and specific demographic segments.  Credit unions should play to their strengths, play to their best demographics, play to building a loyal following. Viewed correctly, each should find a synergy with the other credit unions that can become a growth multiplier in the membership recruiting game.

OK, so who is the enemy?  It’s certainly not the other credit unions.  It’s the banks who see us as playing on an unfair field.  It’s the banks who try to impede credit union progress (should we be looking to them for critical services?).  It’s the banks who want to make sure credit unions are taxed.  It’s the banks who won’t support the underserved.  It’s the banks who are so creative at imposing additional hidden fees. It’s the banks, with their lack of real interest in their customers’ welfare, who should drive credit union membership.

That’s where the credit unions should focus their animosity.  Not at each other!

This blog article was written by Ken Schroeder, Vice President for Business Continuity at Southeast Corporate, where he is responsible for the life cycle management of all business continuity functions. Mr. Schroeder provides consulting services to member credit unions and has been a featured speaker at numerous conferences, forums and other events. You can learn more about Ken at Ken Schroeder