ORLANDO, Fla. - With credit unions disappearing at a rate of one a day, it’s high time the industry put the “co-op” back into the cooperative movement, according to one expert who suggested collaboration is the key to continuing healthy growth.
“Even the largest of credit unions have scale issues,” said Dan Kampen of the Rochdale Group during his session at CU Journal’s Grow Show here. “Are there any regulators in the room? No? Good. The regulations are too restrictive. Our organizational structure does not support our strategies. It’s why you don’t see many start-ups.”
And that, Kampen suggested, is why greater cooperation is going to be vital to the continued success of the credit union movement. But even in an industry that touts itself as one, big happy cooperative family, there are some huge challenges to collaboration. One of the top barriers: the loss of control when more than one credit union’s wants and needs are at stake. And a barrier that is relatively unique to credit unions: a reluctance to leverage one of the primary “economies of scale” that collaboration often brings–downsizing of staff.
To deal with these challenges, Kampen suggested credit unions look outside of the industry for guidance and, interestingly enough, for partners, as well. “There are a number of Fortune 1,000 companies that are interested in credit unions, but the cultures are so different. The Fortune 1,000 company wants to start small and get something done. Credit unions want to do a full analysis and see where it’s going 15 years down the road and have everything ironed out before they do anything.”
Kampen suggested that as credit unions start to approach the 12.25% MBL cap put in place by HR 1151, participations are an area that is ripe for collaboration right now.
One of the easiest areas for credit unions to collaborate on is technology, particularly when it’s back-office stuff that doesn’t directly interface with members, Kampen noted. But beware, “sometimes it is easier to look at an ASP model with a vendor than to do a vendor CUSO,” he said. “Sometimes it is more expensive to collaborate.”
