DES MOINES, Iowa - To jump-start CU growth in this state, the Iowa Credit Union League has formed the Growth Commission, which is finalizing plans to help CUs lower expenses and invest the savings into strategies to build membership and assets.
Formed in late 2007, the commission is comprised of 22 CEOs and one board member from credit unions across Iowa, and representatives from the league.
Headed by ICUL’s Director of Credit Union Growth, Jim Niederhauser, the commission’s recommendations–expected in early 2009–will focus on CU back office support, HR, and marketing, and how to drive economies of scale and best practices in these areas.
“These are the areas in which we feel we can have the greatest impact,” explained Niederhauser, who said the key to the plan is collaboration.
“For us to be able to really grow, continue to be relevant, and have a sustainable model and system, we have to work together and look for collaborative opportunities,” he said, citing that working arrangements could take the form of CUSOs or partnerships. “Here in Iowa we have 144 credit unions, and although they operate similarly, they operate independent of one another. There are ways for us to work more closely together and address some of our challenges.”
The commission’s recommendations are being developed from research the group started in September of last year and is continuing today. The team is reviewing industry trends nationwide and conducting market research around credit union growth. Part of that research has been in-depth discussions with commission members. The market research should be completed soon, Niederhauser explained.
“We hope, by the fourth quarter, to have a pretty good idea of what we are capable of doing. We’ll need to create business plans for the initiatives.”
Pivotal in its research has been looking at best practices of successful CUs in Iowa and across the country.
“We learned that credit unions that are doing remarkably well have common tendencies,” Niederhauser said. “They have really effective governance practices, they manage cost structure well, and are zeroed in on their value proposition.”
Niederhauser said that if the commission can bring efficiencies to credit unions to help reduce costs in the three target areas “it will be really interesting to see what we can do with those savings. Take those savings and invest them in growth strategies, in retail platforms, and in value propositions.”
Once the commission moves further along with its plans, it will check in with CUs in the state to see if the team is “on the right track.” And, if things move along well, possibly release plans in the first quarter of 2009.
A financial analysis will determine the most viable solutions, which will only be pursued if there is a need and demand, Niederhauser insisted.
“It is conceivable that we may discover there is nothing we really can do in a particular area,” he said. “We might find there are practices and programs in the marketplace that we could marry CUs with and leave it at that. Or we might see an opportunity to do something better ourselves.”
Niederhauer said the Growth Commission was formed due to “stagnant” credit union growth in the state.
“We all know membership growth is hovering at less than 2% annually over the last five to 10 years. We are not advancing market share. The league has to be a catalyst to try to advance growth opportunities for Iowa credit unions,” he said.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
