We’re about a month removed from the biggest credit union advocacy event of the year, America’s Credit Unions Governmental Affairs Conference, and as I continue to reflect on the state of the industry, I can’t help but think we’re in a difficult spot as an industry.
In general, our credit unions are facing a major battle for core deposits at a lower cost, elevated (or is it now normal?) interest rates, increases in delinquency and loan losses, as well as massive compliance challenges stemming from CFPB proposals. Every way you look at it, it seems as if our ability to drive in revenue via non-interest income is getting cut while our expenses only continue to grow. While I could go on a rant and deep dive into each of these issues, I think our time is better spent on evaluating “what can we do about it?” or “how can we better compete in this market?” Even more blatantly speaking, control what we can control.
When I ask myself those same questions about our credit union, a small credit union in the Southwest corner of Louisiana with assets of approximately $175 million, I usually come to a crossroads. A friend in the industry said it best, “Do you want to compete on profit-driven initiatives or compete on cooperation and collaboration?”.
Credit unions bring so much value to our local communities and properly expressing that to lawmakers or stakeholders in our own community has become so much more important over the past year. Without our credit union, our communities would genuinely feel a void being left by what we offer. In 2023, our credit union made over $1 million in loan amounts of less than $2,500 to over 750 members (or approximately 25% of the total loans we made for the year). We also made over $7 million in loans (or approximately 18% of our total loan amount) to members with a credit score of less than 650. Consider this: where would the members of our community go for support if not for a credit union? These numbers truly reflect the individuals we assist on a daily basis. Often, it is those in our community who are disregarded or turned away due to past mistakes or because their needs may seem insignificant to a traditional financial institution.
So, when I ask myself that dreaded question, “Why should we try to compete in today’s wild west market?”. I remember that our impact is not strictly financial. We focus on providing financial education and fostering community partnerships that address the education, housing, transportation, and entrepreneurship needs of our communities and our members. Whether it's donating shoes, backpacks, food, housing supplies, or any other essential items, we strive to meet every need in a meaningful way. Our presence in the community is both physical and in spirit, ensuring we make a positive impact wherever we go.
Without credit unions, there truly is a void that would take place in our economy on a national scale. I, for one, am going to continue to focus on impact and collaboration with my fellow credit unions. We were built for tough times like these. We were built on cooperation and collaboration. We were built for our communities. So, let’s stick to our roots and our principles, but let’s embrace innovation and drive our members back to our credit unions. Whether that’s through the digital channels or good ole boots on the ground, let’s focus on meeting members where they are and deliver the impact they deserve!