When Paul Stull, CEO of the Credit Union Association of New Mexico, saw our recent column on the scarcity of new credit union charters, he fired off a long email filled with thoughts about how to remedy this situation.
That is: just maybe we can take steps that lead to a flowering of many new credit unions.
It starts with this question: Are small credit unions a lot like microbreweries? Stull thinks they should be more like them—and, no, we are not sampling the wares.
Stull of course wants to see credit unions thrive, he wants to see more new charters, and then he thinks about craft breweries and he wonders—what is going on here?
He wrote: “micro brews are so popular that [they] spring up in every state. They are all startups, and indicators [are] that locally produced items with a unique identity and flavor can and do excite consumers.”
What’s that have to do with new credit unions? Just maybe a lot.
Stull observed: “The local brew master does not want to become Budweiser…. They want to serve their customers with a high quality product and meet their needs in a unique and welcome fashion.”
He added that much the same can be said about the feisty and creative food trucks that are flourishing in much of the nation. Think of Los Angeles cook Roy Choi and his Kogi BBQ Taco Truck, where Korean flavors meet Mexican in a mashup that has won Choi spreading fame. These cooks, observed Stull, don’t want to be the next McDonald’s—what they want to do is serve food, their way, that satisfies their community.
For McDonald’s and Budweiser, substitute Chase and Bank of America, and—does that make the picture clearer?
Do a quick Google search: “Craft beer [insert name of your town].” I did that for where I live, Phoenix, and Google returned many pages, including quite a few places and beers I had never heard of. That is because the sector is throbbing with activity—excitement and energy—and, yes, a lot of startups.
So why can’t credit unions?
Stull said: “It is hard for me to believe that financial institutions are so complicated that new ones can’t spring up to meet the needs of a specific community or group of people. Can’t regulation be designed to fit these organizations that are better able to know their members needs than even the highest paid bureaucrat in Washington.”
Read that again. He is making two crucial points.
First: the best model for a credit union is to attempt to be one of a kind, to meet the needs of a specific community or employee group, rather than be like a big bank and try to give a little satisfaction to a lot of people, just about anywhere.
Stull’s second point: Who better to come up with these ideas for credit unions than the people who live and work in them?
Stull continued: “McDonald’s has to adjust their menu to fit local tastes. Where I live in New Mexico, they serve green chile cheeseburgers. I don’t see that on their menu in Washington DC. Making adjustment to menus and regulation is just common sense. We need startups to grow the credit union movement, introduce it to new members and to specifically meet the needs of new communities all across the nation. Regulation has done everything possible to keep this from happening. That is just not the American way!”
Understand this: it is crucial that the credit union movement follows safe practices, and if that requires some regulation, so be it.
But Stull is right. The history of the credit union movement—going back to its roots—is that where an unmet need is observed, a new credit union popped up to help.
Don’t you believe the imagination and the energy are out there to help identify the kinds of credit unions and financial products that are needed in community XYZ.
There is a lot of creativity in the credit union movement. Is it is always properly fertilized and watered—or does it just get sidelined out of bureaucratic caution?
What can we do to let creativity flourish in financial services as much as it does in breweries? That just may be the key question in charting the course for a successful credit union movement in the 21st century.