Can small credit unions survive? CUNA white paper says collaboration is key

When Troy Stang shared his vision for the future of the Northwest Credit Union Association in October 2013, the organization’s president and CEO stressed the need to maximize collective action to deliver real, tangible value for credit unions and their members.

Now, a white paper from the CUNA CFO Council suggests that kind of collaboration may be crucial if smaller credit unions hope to avoid extinction.

“Sharing the Burden and the Success” by Bryan Ochalla contends that credit unions must join forces to generate income, reduce expenses, and expand the menu of products and services they offer if they hope to compete with larger financial institutions and keep their doors open.

It’s a matter of survival, and I don’t think that’s an understatement,” says W. Kent Hartzler, president and CEO of Pennsylvania-based Everence Federal Credit Union. “I honestly believe that to the extent that we do or don’t do some of these things, it’s really going to have a reflection on whether the small, local credit union will be relevant or even survive in the future.”

“These things,” Ochalla writes, include participating in shared-branching partnerships, launching or investing in CUSOs, and centralizing key back-office functions. He points to CO-OP Financial Services-an NWCUA partner through Strategic Link-as one example of how credit unions are already working together to achieve economies of scale.

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