One month into the job and at her first appearance as CEO of the California/Nevada CU Leagues, Diana Dykstra said she has not been charged with any specific mission by the leagues' board. Instead, she has her own charge.
"The world has changed, our credit unions have changed, and the league has to adapt to these new realities," said Dykstra, saying that adaptation must take the form of offering different educational programs, means of helping CUs collaborate and reduce expenses, and paths to new revenue. "The league must adjust to the landscape; many of these issues have always been there, just not at the forefront."
Of course, it's in the best interest, too, as Dykstra readily notes, to ensure there remain CUs healthy and operating. She noted that when she was chair of the league five years ago, there were 9,200 CUs; today, around 7,500. While consolidation is natural, Dykstra added, "For those credit unions with the ability and the desire to serve their members, they should be able to do so and we need a solution in which merger is not the only option."
Dykstra is coming aboard at the same time the leagues are rolling out a new CUSO, CURoots, Inc. She was on the committee that worked for two years to help create the new entity designed to help CUs reduce expenses. "Our very first offering is compliance, because that was the number-one thing credit unions wanted. Compliance may not necessarily save a small or medium-size credit union a lot of money, but it will free up resources for other things, such as serving members." CURoots will likely move next into finding ways to use the group buying power of CUs to reduce health plan and workers comp costs. "We have been hearing from credit unions in both states that are facing 20% increases in medical premiums."
To do all of that will require collaboration, a word used increasingly in credit unions. But as Dykstra noted, "Collaboration is an interesting word and process. We talk about it a lot, but it's difficult to do. One problem in collaboration is we often bite off the big beasts first. That's the reason CURoots did not touch technology first."
Instead, she noted, the focus is on the backoffice for now and on building trust, which is key in collaborative efforts.
The New Landscape
Dykstra, who said she has a good familiarity with Nevada's CUs as she was previously chairman of the California/Nevada leagues and it often hosts joint board functions, said all the attention being given to collaboration and the new "landscape" will not come at the cost of reducing the budget for political advocacy. "This is a chicken-and-egg situation. If we did not have strong advocacy, we would have a much tougher operating environment. We want to make sure that the things that do get passed do not impact credit unions more than banks."
In the wake of the recent elections, Dykstra said the league is projecting that "some of the regulations will be fought by the Republican leadership. Through 2012, however, we are expecting a lot of gridlock. It is frustrating for us. It's a difficult environment to get things accomplished when people will not reach across the aisle."
Just as credit unions will need to collaborate, Dykstra said leagues will, as well. She noted the Texas and California/Nevada leagues, for instance, have worked to share their advocacy insights and experiences with other states. She said there are no current plans, however, for the league to merge with another state's, such as Arizona/Colorado/Wyoming and Oregon/Washington have recently done.
Dykstra, who joined the league after being CEO of San Francisco Fire CU, is stepping into the job at the time one conflagration continues to smolder: corporate CUs. California and Nevada's CUs lost substantial capital and investments in the failure of WesCorp.
"I think credit unions across the country will work together to create a solution that makes sense," Dykstra said. "With the new rules corporates are not given the opportunity to look at something else. I think we will come together to craft a solution. But it won't be corporates that decide what we are going to do; it will be credit unions that decide what we are going to do."
Dykstra acknowledged that among those smoldering embers is still some anger at WesCorp's former management. "Yes, there is a lot of anger. The corporates lost a lot of their members' money. But was is intentional? Absolutely not. They were victims of a crisis like anyone else. They invested in highly rated investments."
Moving forward, she added, "We would be foolish not to have a system solution (that provides liquidity, investments, brokerage services, etc.). We would be forced to go back to banks. I think it's a matter of what it would cost us NOT to recapitalize the corporate. We could lose more by not doing so."
Dykstra said she has heard some rumblings on occasion from CU leaders who question the ongoing viability of the CU business model if MBL relief isn't granted or the tax exemption is ever lost.
"There have been pockets of people who sometimes say this model is not right. I think that focus is wrong. I think we are flexible and nimble enough to recreate ourselves. The credit union charter is valuable; it changes people's lives."
Frank J. Diekmann is publisher of Credit Union Journal and can be reached at