CDCUs Told Commitment, Good Works Insufficient To Sustain Ongoing Growth
Community development credit unions gathered here were told that if they want to survive, they must start investing in several key areas, specifically strategic planning.
NCUA Board Member Debbie Matz told the National Federation of CDCUs' 30th Anniversary Meeting here that "CDCUs have never been more important to the entire credit union community."
"As legislators investigate credit unions' tax exemption and their contribution to the 'societal good,' CDCUs continually fulfill their 'societal good' by enriching the lives of low-income members," she told the meeting. "CDCUs are often the only insured financial institutions in underserved communities, and generally offer exceptional personal service that can't be found anywhere else. To some people-most notably, many legislators-CDCUs are the icon of credit unions."
'Commitment Is Not Enough'
But all those plaudits and goodwill aren't enough, according to Matz, who cautioned commitment is "not enough to preserve your future. You must overcome the threats to survival that all small credit unions face today."
Matz noted that small credit unions, a category into which most CDCUs fall, are disappearing at a rate of one per business day. The reasons, Matz believes, is limited planning, insufficient training, and inadequate services to attract new members and grow.
"With all the threats to small credit unions' survival-and all the opportunities to grow- there has never been a more critical time to invest in your credit union's future," Matz emphasized.
Matz said she would like to see CDCUs take three specific steps to thrive:
1. Create a strategic plan. Matz urged credit unions to start by asking challenging questions, including: Why is your credit union in existence? What is your mission? Is your mission realistic? Are your services structured in a way that you can survive? What is your vision? Where do you see your credit union in five to ten years? Where will you find new members of tomorrow? What services will they need? How will your credit union provide those services?
2. Train volunteers and staff. Help board members understand their responsibilities to ensure effective internal controls; sound procedures to prevent conflicts of interest and fraud; adequate reserves; clear expectations and evaluations of staff.
For staff, invest in ongoing training to keep up with changing credit union operations, compliance requirements, and strategies to reach new members. "Training requires an investment of resources which some small credit unions may not have," Matz pointed out. "But without this investment, a credit union is doomed to failure."
Partner with other credit unions and outside organizations. "By forging creative partnerships," Matz observed, "CDCUs can leverage resources to provide needed training and offer new services."