ARVADA, Colo.-Recognizing that size limits their ability to improve the bottom line and grow, 20 Colorado CUs have created The Alliance of Rocky Mountain Credit Unions, an informal collaboration group that's producing quick results.
The alliance was formed in January 2010, and in its first three months "The ARM" has introduced MyBank2go, a youth campaign, and has three other projects being fast-tracked. The group is comprised of CEOs of credit unions whose assets are below $250 million.
Sundie Seefried, CEO of the $211-million Eagle Legacy CU and who also chairs the group, emphasized that driving greater economies of scale and leveraging the brainpower of a number of organizations are not only necessary for small- to mid-sized credit unions, they may be ways to ensure survival. "We don't have the resources of the larger financial institutions," she said. "But by combining talent and financial resources, we can compete more effectively for market share."
The ARM's objectives are clear: increase revenue, decrease expenses, and promote credit unions. The group reports that MyBank2go is driving growth, while two other key projects are looking at income replacement and how to prevent expenses from rising if corporate system restructuring eliminates some services.
MyBank2go offers a standard suite of products for the 18-to-24 market, in addition to materials to advertise those services, including a central website. It's an example of not only how quickly The ARM can move, but how well collaboration improves a concept, Seefried shared. "We took this idea to the table and it just kept developing into something bigger and better. We all realized that we would never have been able to develop this idea on our own."
The ARM is hoping for the same results with its income replacement project, Seefried said. Several ideas are on the table for replacing courtesy pay income-one is for a security/identity theft protection service that Seefried said is projected to generate more than $2 million in revenue among the 20 CUs this year.
Regarding the corporate alternative effort, brainpower is being directed at developing new ways to effectively and affordably replace corporate services, such as item processing, in case those disappear. "We are looking ahead to make sure business continuity is not interrupted," Seefried said.
The ARM is not a CUSO, nor are participants bound by any formal structure. There is no board of directors. That informal design is the key to getting things done quickly and checking egos at the door, according to Seefried. "A CUSO would have taken too much time, plus we want to keep it informal because we want people to come to the table and give their input. If you start going to a formal structure with board members and all that, you start getting tied up in meetings. This way we can just put information out to each other and talk without any political agendas. We are proceeding more like friends that want to help each other."
But The ARM members have each signed a letter of understanding that includes language requiring everyone to participate. "Everyone understands what they are committing to," Seefried said. CEOs are required to put in their time on project committees-on CEO skill. The income committee, for example, has many CEOs who used to be CFOs, Seefried shared.
The ARM meets four times a year at Denver Community CU, which has a large meeting room. Committees work independently of the quarterly meetings, when they share their progress. A great deal of additional communication among the credit unions is simply picking up the phone and talking, Seefried said. Carla Hedrick, CEO of the $223-million Denver Community CU, Claudia Milan, CEO of the $78-million Arapahoe CU in Centennial, and Seefried provided the impetus to first bring the Colorado credit unions together, and 30 attended a summit last July, which eventually led to the idea for the collaboration.
"It all started with that summit," Seefried said. "Things just got so ugly for us the first half of 2009, between the NCUA assessments, the corporate situation, and mounting member losses and foreclosures, we all felt so very alone. We started digging in and were not as close knit as an industry as we used to be. So we realized we needed to bring people together and support each other."
