SAN DIEGO -
Rudy Hanley, CEO of Orange County Teachers FCU, said credit unions are mistaken if they believe simply expanding their field of membership is the panacea for growth.
"The needs of the new group a credit union brings in may be too much to handle," he said. "Similarly, marketing does not solve everything. A rock in a Nordstrom box is still a rock, and a diamond in a paper sack is still a diamond. Be careful of putting the same products in fancier packaging."
Raw membership growth is not an improvement if valuable members are leaving at the same time, Hanley pointed out. He said members with more shares and loans bring greater profitability. "The number of relationships is the most important growth number. That is where a credit union gains efficiencies."
Asked about mergers as a growth tool, Hanley said merging is an individual decision, but warned merging with a CU that has a different field of membership will lead to many changes. "Merger for merger's sake can be bad. It also can be bad to avoid a merger if doing so would mean missing out on benefits."
