TAMPA, Fla. - Suncoast Schools FCU’s Tom Dorety was elected chairman of the CUNA Board in March. Credit Union Journal caught up with the busy CUNA leader and CEO of the $6-billion Tampa, Fla. credit union to talk about his plans for the trade association and challenges facing credit unions.
CUJ: In your term as CUNA chairman, what will be some of the key areas you focus on?
Dorety: From my perspective there are two things that are imperative for credit unions to continue to be successful. The first is we have to protect and enhance our charter. And the second is we have to have the ability to grow, meet members’ needs, and be financially secure. Those two things in my mind are what CUNA is all about. We should be doing everything we can to protect and defend credit union charters–federal and state. And we should be looking at anything we can do to help CUs grow.
CUJ: As you pointed out, growth is a major issue. What do you see as essential to credit union growth?
Dorety: Growth comes down to becoming more efficient to enable you to offer better products, and more products and services. What I hope I see more credit unions doing is figuring out new ways to cooperate and collaborate to drive efficiencies. As an industry, we are not very large. I am at a $6-billion credit union and we are not a large financial institution.
CUJ: Are credit unions embracing collaboration?
Dorety: I think we are at a tipping point where everyone is going to understand this better. We are dealing with unprecedented economic stress, which is creating an environment in which CUs will have to work hard at becoming more efficient, utilizing other resources and working together. The CUSOs, the national organizations, the credit card associations...I think we are going to see a major expansion of these in coming years.
CUJ: What do you see the other major challenges facing credit unions?
Dorety: One of the biggest challenges is how we are going to work through the economic hurdles. We are in the middle of an unprecedented economic downturn. We are really feeling it in Fort Meyers and many other parts of the country are feeling it as badly as we are. But with the economy, it’s not just about how we run our credit unions, it also comes back to regulation and legislation. From a proactive standpoint, our representatives are suddenly faced with economic challenges and are reaching out to do things to help the economy that would directly impact how we run our business. When they start making changes in bankruptcy laws, credit card laws, and interchange fees, those things add different and unique challenges to credit unions.
I already touched on growth. And I think in the credit union world it is no secret that the larger you are the greater ability you have to be efficient. But that doesn’t always mean you are. And it doesn’t mean that smaller credit unions can’t be more efficient. I think everything we do today is tighter . . . tighter numbers, smaller spreads, and dealing with expenses.
Capital in also challenging. One of the key components of CURIA is PCA reform. I think it is absolutely crucial to the future of credit unions that our regulators have the ability to look at us and determine the risk of an organization and enable us to do things based on the amount of risk we are taking. I think we should be put on an even basis with banks as far as the level of capital that is required. There is absolutely no reason for that not to happen.
If you look at the cooperative movement in the country and in the world, access to capital is critical. I think there ought to be ways, and we have looked at this in the past but it doesn’t get a lot of traction, to figure out how we can come up with other means of capital–alternative capital, secondary capital–to help credit unions with growth issues or economic issues. Give us another tool to manage what we are doing. There are some people who say that changes what we are. It changes our ownership structure. Well, that’s always the easy thing to say to stop the debate. The fact is you can use our example today: If a credit union is growing and active and we run into economic difficulties, if we can work out a structure to allow us access to more capital in a meaningful way without changing the structure of the organization, it would help us manage what we are doing and help us serve more members.
CUJ: You mentioned how difficult it is today to get issues addressed in Washington. Credit unions have invested significant lobbying dollars into CUNA. Some say that with the current state of CURIA and CURRA, things are going nowhere. What are CUs getting for their advocacy dollars?
Dorety: That’s an incredibly valid question, today as much as any other time. I understand the frustration that credit unions have not been able to get a proactive piece of legislation passed. But without the advocacy efforts that CUNA has put forward, we would not have gotten anywhere close to where we are now. I have been involved with this for the last six years and have seen all that’s going on. CUNA doesn’t put out a press release every time we talk to a congressman, or every time we have a meeting to work a deal with a member of our country’s leadership. So much of what CUNA does from a lobbying standpoint is under the radar. We are much further along today than we have ever been in getting some type of relief from a legislative standpoint and we are aggressively working. And while there hasn’t been any major success–it’s a long and ugly process–if we don’t continue along this path, if we don’t continue to put the resources out there, then we put ourselves at grave risk of losing what we have.
What CUNA does is get in the trenches and works hard. It does the background work to give us the opportunities, represents us and makes sure we are engaged. Then it’s up to the CU world. In fact, we don’t have a majority in the House to pass CURIA. CUNA has done everything they can, and the fact is that my congressional representative was just here to sign on to CURIA. It wasn’t CUNA’s fault that she hadn’t signed on. It was all local. We had to finally figure out a way to convince her it was important. It’s the whole CU system that’s important and there’s nothing sexy about what CUNA does 99% of the time. But they are incredibly effective.
CUJ: You head a very large credit union at Suncoast. What would you tell the smaller credit unions that might say you are not close to the issues they wrestle with daily?
Dorety: The first thing is that I’d I admit they are right. I don’t understand all of their issues. And I don’t think that it is worth their time or mine for me to totally understand the intricacies of running a $20-million credit union. I come from large credit unions–State Employees (North Carolina) and Suncoast. What it comes down to is there are differences between small and large credit unions. But when it comes to understanding and addressing the important differences, that’s why we have a 24-person CUNA board. We have representation from all credit union sizes and its imperative we get input from everyone. But it’s all based on trust that I will do the best that I can whenever I have an opportunity to represent credit unions of all sizes...As I said, we have CEOs from small CUs on the CUNA board, and you can turn that question around when they become chair.
CUJ: Taking over as CUNA chairman will obviously affect the time you put in at Suncoast. How will you manage that?
Dorety: When you decide to get into something like the CUNA board and move into the executive committee, you should make a decision that you are going to try to become chair. So advancing to chairman can be an orderly process. In 2000, I had a daughter become seriously ill, and at the spur of the moment, for four to five months, I had to spend half of my time in North Carolina and half in Tampa. So I didn’t prepare for that. But it worked out just fine. In my current situation, I was prepared. We have a large staff and an incredibly talented group who run the credit union. I don’t run the credit union. We all do. They are fully prepared to handle this and run the credit union when I am away.
I also have the ability to set my own schedule. I will be traveling more. But you work it out. Every day, traveling or not, I am caught up on e-mail and voicemail, and I talk with anyone who needs to speak with me. It’s not that hard to do with technology.
CUJ: And managing family time?
Dorety: We have four daughters between 24 and 26. And a year ago my wife and I adopted a little boy who’s now 2. I’m 57, and all of a sudden we are doing foster care. It get’s a little challenging. But it’s working out fine. Everyone does their part and you learn to use your time wisely.
CUJ: Past CUNA chairs have made their marks, perhaps on member growth or even leadership. What kind of stamp would you like to leave on your chairmanship?
Dorety: I hope we can relearn the importance of differentiation between credit unions and banks. So many times–and I am a large credit union so we run into this trap more than most–we aspire to be a little better than banks. I think it is crucial that if we are going to continue to be considered unique and different, and that includes our charter and tax exemption, we need to be more than a little better than banks, and be cognizant of the differences between credit unions and banks. I think we talk about it a lot, but I fear we don’t embrace it as much as we should.
