Higher Ed For Higher Growth

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MADISON, Wis.-Credit unions will continue to grow-but at a slower pace if they do not obtain continuing education for directors, and lending staff when the CU seeks to enter into or expand business lending.

CUES President Fred Johnson told Credit Union Journal that many directors need to go back to school so they have the knowledge necessary to help guide the credit union in the new business environment. "There is no doubt about boards' dedication and volunteerism. But I can be a very passionate guy who wants to fly a 747, but if I don't have the skills for it... I am not saying our folks do not have skills, but those skills needed have changed considerably."

In addition to the financial literacy skills NCUA is now requiring of boards, Johnson said directors need to be trained on how to listen and ask the right questions when proposals are presented to them. Johnson stressed that many new and different proposals will face boards in the coming years as credit unions look to new markets and opportunities to grow in the face of challenges to revenue streams.

"It will be very critical that boards be able to ask the right questions of proposals," insisted Johnson. "Some of those good questions will be around the downside to what is being presented. How many times, when a new opportunity is presented, are downsides addressed? You have to understand all the costs of a decision. Nothing is perfect."

CU staff need to go back to school, as well, before a credit union expands its business lending program. "Anyone is kidding if they tell you that lending money to individuals is not very different than lending money to businesses. Business lending is a big growth opportunity for credit unions, but it is a challenge for credit unions because it is a skill that is not natural to them."

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