Delicate Balance Of Being Large CU, Not Small Bank
Eloquence seldom graces our collective ears anymore. Talking heads don't talk as much as yell. Much "discourse" occurs in txts & mst arnt wrth gng bck & insrtng the vwls. And bank CEOs speak a language that begins in spreadsheets and ends in stock tickers.
But there was one CEO recently who offered some observations and insights into the credit union business and the reason for being that are among the most eloquent I have heard and are worthy of your attention. As is reported in this story, Tamara Vrooman, CEO of VanCity Credit Union in Vancouver, B.C., was recently one of three panelists talking about credit unions, cooperative finance and more during the World Council of Credit Unions' recent meeting in Scotland. (You can add new WOCCU CEO Brian Branch to the list of eloquent, by the way, after he spoke for some time without notes and with passion about the role credit unions can play in the world.)
The VanCity story is well-known, its brand respected and omnipresent in its home city, its innovations and leadership frequently cited outside of the credit union community. Vrooman was asked a question about the need for scale in order to survive. Most interesting was that she did not reply by citing expense ratios or other data. Instead, she reminded what makes the data possible in the first place.
"I think sometimes we put the issue of scale too much in an either/or," Vrooman observed. "We must be competitive, absolutely. As we say in our organization, 'No margin, no mission-and no mission-no margin.' That is the challenge we face as a credit union of $18 billion that serves 400,000 members, which is one in four people in our market. We have remembered that we serve our members first and we take that responsibility very, very seriously. We seek to innovate and be ahead of our competitors; we were first to lend to women without a male co-signer, in part because that's our mission but also because there was demand."
Vrooman then summed up the challenge in front of her, and facing all credit unions in the world-especially in the United States-as they merge and pursue bigger is better "efficiencies."
"Our challenge now is how to become a large credit union and not a small bank," Vrooman said. "The minute we become a small bank we will lose to a big bank. The real challenge is how can we use our cooperative infrastructure in order to leverage economies. I do believe financial sustainability is important, but if we pursue financial sustainability and growth, and if you don't stay true to your mission. we put our entire mission and our movement in peril."
Vrooman, who said VanCity has a "triple bottom line" that requires it to make decisions that are "good for people, good for the environment and good for financial sustainability," then added another insight that was penetrating.
The word "collaboration" has all but become de rigueur at credit union conferences (the CU Journal online archive shows more than 350 mentions of the word in our reporting just this year). And yet, as Vrooman pointed out, there just one itsy-bitsy problem with all the talk-there's no walk.
"We trust our members, and our members trust us, but as credit unions we don't trust one another. We don't collaborate," she said.
A couple of other quick notes while cleaning out the notebook:
• I recently shared the extraordinary story of Mahir Momand, CEO of the Islamic Investment and Financial Cooperatives Group (credit unions) in Afghanistan. To get to the WOCCU meeting in Glasgow, Momand first traveled to India, where he was made to wait 23 days to get a visa to visit the U.K. Each day Momand said he asked authorities, "Why do you make we wait? I am not a terrorist."
• Seen in London, best name for an electronics repair shop: "TellyOnTheBlink."
• At the Glasgow airport travelers have no choice and must take a long, serpentine walk through the Duty Free store to get to their gate.
• If you've often wondered why there is such a void in rock music universe with no bands made up of bagpipers, you may rest easy: the WOCCU conference opened with the Hot Red Chili Pipers. (You can check out some of their performances on YouTube.)
• On a dinner bill at a Glasgow restaurant:, "Please note a discretionary service charge of 10% has been added to your bill." Hmm, doesn't sound discretionary to me.
• At the WOCCU meeting I had the great pleasure of leading a breakout session. At this session, I broke up the group into tables and asked them to form "countries" as they participated in the discussion.\Among the names chosen by participants: "KenUsBago, for a table that included Kenyans, Americans and Tobagonians; "Comtue," for "Come to us for everything," and a group of Aussies and Irish who proudly announced for reasons that only they seemed to know that their country was to be known as "Chicken Combo."
Frank J. Diekmann can be reached at email@example.com.