CUs Urged To Adopt “Relentless Drive For Efficiency’

BOSTON–Not surprisingly, the net worth of individual credit unions and the industry as a whole received a fair amount of attention during CUNA’s America’s Credit Union Conference here.Matt Davidson, VP with the California/Nevada Credit Union Leagues and a former regulator in Ohio, said it’s been his experience that credit unions suffering lagging or declining net worth often get there as the result of a slow decline rather than one major event. ”I think we need to hop out of our situations and realize when the situation is getting weak and take appropriate action,” said Davidson.He urged paying attention to peer group leaders such as CEFCU in Peoria, Ill., Space Coast CU in Melbourne, Fla., and San Diego County CU in California, which have posted positive numbers in part by watching their collective wallets. “What do they have in common? Low operating expenses. It’s not that they do things cheaply, they do things efficiently,” said Davidson. He cited a quote from Doug Samuels, CEO at Space Coast, which is engaged in a “relentless drive for efficiency.”“To be efficient, you can take a hatchet to expenses, or you can know how much it costs to provide a service,” Davidson said. “Decide if that’s how you want to spend your member’s money. You need to employ activity based costing and product profitability management. These help you implement the proper cost accounting to make a decision on a service or a loan.”