OVERLAND PARK, Kan. -
"The bigger issue really is a lack of organic growth," said Kampen. "When you struggle with organic growth, you have to look for other ways to grow." Resolve the growth issue, Kampen advised, and some of these other symptoms likely go away.
"It obviously isn't our capital that's keeping us from growing. Sure there are some regulatory issues, and some economy of scale issues, but that's not the real problem," he said. "Innovation and efficiency are the real issues."
"If you can't grow organically, you grow through acquisitions," offered Alan Theriault of Maine-based CU Financial, which has been involved in a number of credit union-to-bank conversions. "Frankly, members have been faced with hostile takeovers ever since [former NCUA Chairman] Dennis Dollar did away with field of membership overlap protection. The bigger community credit unions move in and steal away members from the smaller credit unions. And in the end, I think that's what this Wings deal is really about. The difference is that members are getting paid to make the move. The credit union profitability model has been eroded."
The passion being expended on this situation, as well as conversions, is blinding the movement to the real issues, advised Tampa, Fla.-based GTE Federal Credit Union CEO Wendell "Bucky" Sebastian.
"I'm concerned things are not being discussed dispassionately amongst everyone in the industry. I think everyone has an axe to grind. No one should have an axe to grind," he said, noting that part of the problem is that the focus has been on what is best for an individual CU, regulators or trade association, when the focus should be on why members are leaving their credit unions.
But for as important as growth is, some have warned it can't be the be-all, end-all of everything a CU does. "There have been some aggressive activities, because credit unions are seeking growth. In some cases, it might be growth for the sake of growth. In some cases, there is a belief success is measured by asset growth or ROA growth, rather than focusing on member satisfaction," said Texas CU League CEO Dick Ensweiler. "When the plan calls for asset growth, and CEO and management compensation is linked to asset growth, sometimes when that happens it causes creative juices to kick in and we see some interesting new twists."
