Credit Unions: Industry or Movement?

It’s pretty amazing when you look around the credit union landscape and realize there are so many passionate, hard-working professionals who are striving to make their members’ lives a little bit better every day.

Recently I had some private email discussion that made me think back to Brent Dixon’s excellent OpenSource CU post on CUs being an Industry vs. Movement. When subsequently the CU Skeptic came on the scene, and got a certain degree of flame-mail for his stance and anonymity, I had to come to his defense to say that his voice is important and likely representative of many others. There are people, both inside the industry and outside, who say that credit unions are really the same as banks… that we are just pushing more debt and doing whatever it takes to bring dollars into the institution no matter what the impact to members (e.g. fees generated via courtesy pay, tap the equity in your home for any purpose), in which case we are no different than banks, right?

Please know that there are few people more passionate about the credit union movement than I am. But more and more people within the movement are concerned about a bank-like attitude that is pervading throughout credit union land, especially at larger credit unions. And they might be afraid to speak up for fear of losing their jobs. Are large CUs losing their way? Are they a black eye to the industry/movement? Or is a more bank-like approach inevitable with growth?

Or is it that we are just an errand that people appreciate even less than dentistry, and we just create tons of junk mail in the pursuit of making a buck? Are we becoming cutthroat competitors of each other who only cooperate when its convenient? Is cooperation now an anachronism?

If we have lost our way as a movement, who is at fault, our members for not caring about the credit union difference anymore, or our fault for not telling our story in a way that resonates with them?

Update: I just discovered (via comments to the CU Skeptic’s About page) that our Irish friends are wrestling with these same issues.

(If you are a credit union professional, and want to respond in a forum where only your credit union peers will view it, you can do so on EverythingCU.com here.)

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9 Responses to “Credit Unions: Industry or Movement?”

  1. Cam Minges Says:

    History has taught us that movements (as we refer to them) are born from a grass root. We in the movement should stop trying to call ourselves a movement and let our members/customers do the talking for us.

    Perhaps, our members/customers don’t give a hoot about the movement. They want products and services that are relevant to them.

    If they want to call us a movement, bank, ice cream parlor, or whatever let them. As long as they call us.

  2. Robbie Wright Says:

    We an industry, not a movement. As much as I’d love to say we are, I just can’t bring myself to say it. Yes, we have passionate people all over the country doing what’s best for our members, but look at what Cam mentions: grass roots. Small, grassroots CU’s can’t survive on their own. They get gobbled up by larger CU’s and the initial reason for CU’s, the common bond, disappears. We need to bring the movement back into CU’s, but to do that we need to figure out a way to make small CU’s super successful. We need to think about service our niche member base exactly how they want to be served and not always about growth.

  3. Morriss Partee Says:

    @Robbie – There are small CUs that are struggling, some that give up and get merged into a larger one, and there are others that are THRIVING! Don’t tell Gene Blishen, President of Mt. Lehman CU that a small CU can not succeed- he’ll prove you wrong.

    @Cam – Perhaps because leaders at some CUs feel that it doesn’t matter what CUs are called has led to a deterioration of the credit union difference from the members’ point of view? Is this not a vicious downward spiral? Some members don’t care, so the CU itself no longer cares, so the CU stops educating all members and potential members about the CU difference, purpose, and mission, which means that eventually no members are left who know or care about the difference…. see how that cycle goes to zero quickly? Can the cycle go upward, even if slowly? Can we educate more and more members about the difference? Is it worth it? Or should we indeed stop trying? Has your CU already stopped trying? What about all the CUs that are dropping the words credit union from signage and marketing?

  4. Cam Minges Says:

    A while back Seth Godin spoke to some credit union folk. He kept on referring to the word “bank” in his message. Throughout, the faithful were shouting out…”we’re a CREDIT UNION not a bank, we’re a CREDIT UNION not a bank…”. Seth’s reply was…”I’m a customer and I don’t care what you think. I think you’re a bank”.

    The key ingredient to success is that we in the “movement” know the difference When we forget that then we have a problem.

    The underlying charter to every credit union is to be in the business to serve their membership. Not to serve the movement. If you can convince a marketing department and/or credit union leadership to devote monies in their budgets to educate folks on the difference, more power to you. I’d rather spend our money on developing innovative products and services that differentiate us.

  5. CU Communicator Says:

    IMHO – it’s both movement and industry … depending on whose lobby you happen to be standing in.

  6. Mike Templeton Says:

    I agree with Robbie and describe our side of the FI playground as the “credit union industry.” As competitors against banks in the overall financial space, I think its difficult to say that a movement could compete with an entire industry. But, when we describe ourselves as an entire industry, albeit smaller than banks, it gives us more of a fighting chance.

    If I were a consumer with little knowledge about credit unions and was looking for a FI to bank with, which sounds better, a movement or an industry? Movements come and go, but an industry is harder to erase.

    I feel like this argument could go back and forth forever and that there will always be viewpoints on both sides, but I think Seth Godin really made the best point. It doesn’t matter as much what we think of ourselves as, but what’s really important is how the customers/members picture us.

  7. Morriss Partee Says:

    Mike, I love you man, but I could not possibly disagree with you more. Movements come and go? It’s industries that come and go, e.g. the horse-drawn carriage industry, telegraph, coin-operated arcades, etc.

    Movements on the other hand: the civil rights movement, the environmental movement, the feminist movement, the peace movement… these are fairly timeless movements, and the only thing that would make them go away is if the need that caused them in the first place is eradicated. Since we are in the midst of a savings crisis in this country, the need for the credit union movement is as big as its ever been.

    Also, the last time I checked, Seth Godin has no particular insight into the banking industry or credit union movement and what will or won’t work in terms of furthering the credit union cause.

    Unfortunately, I am discovering that you and Robbie are in the majority thinking that either it’s an industry, or that the label doesn’t matter. (There’s a poll on the subject on EverythingCU’s home page right now. I argue that it’s the CU world’s fault for not telling its story more effectively (which is where marketing comes in). I realize that not everyone has the resources to make a trip to America’s CU Museum, but if you have the chance to visit our movement’s Mecca, stand in the foyer of that home where the first millworkers waited in the 1910’s to make their case to take out a $2.00 loan, understand how/why this movement started, then let me know if you still think it’s an industry.

    I think it’s an unbelievably large oversight that this information does not exist online in a meaningful way, so that those who can not make the trek to Manchester can gain a glimpse into why and how the credit union movement was founded.

  8. Morriss Partee Says:

    @Cam – Thank you for your follow up response. Indeed, each CU is chartered to further the financial well being of its members, and innovation is an important component of doing that effectively. Telling our story is also an important part of doing that effectively, and there is no reason why we can’t tell our story as an integral part of the way we do business. It shouldn’t be thought of as an expensive, time-consuming add-on. To the contrary, the institution is losing potential business when it doesn’t tell its story to its members/customers.

    In our neck of the woods, UMassFive College FCU has recently improved its account opening process to include clear explanation of what a credit union is all about. This rather amazing story was the nearly-immediate result. It’s harder to measure the long-term impact, but I’ll bet its significant.

  9. Mike Templeton Says:

    @Morris – I wonder if Robbie and I share viewpoints because of our stance in the credit union world (both of us working for CUSOs)? I understand where you’re going with the savings crisis and how credit unions can and need to help, but is it really a credit union movement or a thrift/savings movement? I think it’s about the idea of saving more, spending less, being more educated financially, etc.

    My problem with credit unions being a movement is that it just doesn’t seem to translate well into the business world. If credit unions want to compete with banks for the FI future of mainstream consumers, they need to organize themselves in such a way that allows it. This doesn’t mean CUs need to give up their philosophies and ideals or conform to the way banks do business, but I think they do need to act and plan more like a larger business unit (an industry).

    I love what credit unions stand for, I just think they need to pay more attention to what consumers what and think and act accordingly. Seth Godin may not be an expert or an authority on credit unions, but he does know marketing and I think those principles can be applied across the board to any industry or movement.

    I hope I’m making more sense of my viewpoint. 😉

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