DENVER-The Mountain West CU Association is in the process of assembling a small credit union task force, making it the latest state league to revamp its programs aimed at assisting small CUs.
The league, which serves CUs in Arizona, Colorado and Wyoming, was formed in 2011, but prior to that the three individual state leagues were part of a CUSO that aimed to find solutions for small to mid-size credit unions.
Scott Earl, president and CEO with the Mountain West league, noted that the CUSO worked with an IT company, and also had a relationship with ADP TotalSource for healthcare.
"As the economy went down, that venture just didn't go as far as I think everyone envisioned," said Earl.
Once the merger was finalized it was determined that the league could do much of the same work through its service corporation or through the association, without using funds from member credit unions.
"They put up the capital, and that capital was slowly being depleted because it wasn't a profitable situation, so the dollars were slowly disappearing."
The CUSO was mothballed and capital was returned to member CUs at the end of 2012.
Debut Later This Year
Since that time, association officials have been working on constructing the new task force, which is expected to debut later this year. MWCUA's new chairman, Bob Ramirez, took over in April, and Earl said more details on the task force will begin to emerge starting in August.
One element that is already clear, however, is that the group will focus on expense reduction rather than growth, along with compliance assistance. Earl said part of the reason the group will not focus on growth is because not all CUs are interested in growing-particularly those small CUs tend to serve niche markets.
Focus On Compliance
"One of the reasons we've focused on compliance is that CEOs of small credit unions just don't have enough time during the day," said Earl. "Where they ought to be out interfacing with members and helping to grow the credit union, they're spending their time complying with rules and regs from NCUA, the CFPB and everyone else. When you wear multiple hats like CEOs of small credit unions, so much rests on that one individual that we can burn them out if we're not careful."
MWCUA has beefed up its compliance staff at the state level and is using an automated compliance program from NeighborBench to provide real-time online views of CU compliance.
"That product was originally priced for mid-size to larger credit unions, but we've worked with that company and gotten them to where they've put together a scaled-down version of it that still works and is priced more effectively for smaller credit unions," said Earl.
The Mountain West CU Association also distributes a packet called "In Compliance" every time new regs are released that provides analysis and step-by-step procedures "on what you need to comply, so that CEOs of smaller credit unions aren't overwhelmed by having to read through everything. We're trying to bridge that gap and simplify it."
One problem with the CUSO was that ADP TotalSource could not provide healthcare services for CUs with fewer than 10 employees, which meant many small CUs were not covered. MWCUA is now working with Discovery Outsourcing, which will work with CUs with as few as one employee. "So far we're finding their pricing to be very good for folks," said Earle.
A Place To Start
Earl conceded that expense cutting will not be enough for many small CUs, but it's a good place to start.
"There's no question that if they want to survive, they've got to grow," he said. "But that means different things to different credit unions. I've been in leagues for my entire career and started as a marketing director. I spent a lot of time working on different programs, different turnkey kind of things that credit union could put in place to help with marketing and growth, and we never quite settled on something that worked universally from the state level. I'm not sure the kinds of resources we'll need to put together to make that work. It's got to be somebody brighter than me."
