The View From the Smaller Sized CU – What We Can Learn from Chumbawamba

by: Gregg Stockdale, President/CEO, 1st Valley Credit Union

I do like the line from their song –“I get knocked down, but I get up again” and it’s very appropriate for what the smaller cu is experiencing lately.  I also like the gritty determination to not let it destroy you.  “You’re never going to keep me down”, goes the next line.  We’ve taken our hits from the economy, the regulator, and the lawmakers in the same way our larger brethren have, but without the resources they have at their disposal.  It has been a bit like being on the receiving end of a fire-hydrant’s output.  We no sooner get a grip on one thing and two, three, no; four more regulations, compliance concerns, processes, and reporting demands spring up.  Start to get a grip on those, and here come four more.  It would be laughable if it weren’t so serious.  So what’s a bloke or bird to do?

• Merge – give up.  Throw in the towel and call it a day.  Go be a VP for a few years at a larger shop, and when the contract is up… retire. YUCK!  I’m writing this on the 4th of July so my patriotic dander is up… Do you think our forefathers threw in the towel to the British?  No, we had a “tea party” – of the Boston variety, not the current political group.  It’s un-American to give up.
• Try harder – tough it out.  Ok.  I’ve been there and done that.  I was the proud owner of over 600+ hours of unused vacation.  Why?  Well, there was this project and that program that needed done, along with this report and changes to be made in policies (repeat weekly).  You don’t get 600 hours overnight and the prospects of it going downward were slim and fat… Trying harder does not work as a long-term approach.
• Delegate – share the pain.  We have cut staff, increased workloads and duties, added programs and processes in order to be competitive…  How much “extra” does your staff have on their hands?  Not much.  Our larger brethren have more folks in EACH department than our ENTIRE staff.  We laugh when we hear “delegate”.
• Get help from another cu – Use a “life-line”.  I hate to use the term collaborate because everyone talks about it and very few actually do anything.  Don’t make it bigger than it is.  Do you need help with GL’s, bringing on a new program, understanding a new regulation (OK… everyone’s in that boat!).  Whatever you need, there’s someone out there that can help.  Being a long-time CEO of a small shop, I’ve learned to do this pretty well.  The nice thing is, the larger cu’s are usually very willing to help (as long as you keep it clear that there is no merger in the future…. Some of those people are sharks! Most aren’t.) And, the cu does not have to be a mega-billion shop to help.  They just have to have faced an issue you haven’t and are willing to share the experience they’ve learned.
• This one took a while to develop, but it changed our outlook and made life more bearable.  “Be your own CU”.  My advice is to get a very firm grip on what you ARE and what you ARE NOT.  Your programs need to be asset-appropriate and tailored for YOUR members… not the successful program that worked somewhere else for some other members.  You (and your Board) can waste a ton of time and money you don’t have trying to reproduce a program that made some other cu grow by leaps and bounds, brought in $zillions of loan demand…etc.  The burning question for me is always – “What do my members want and need?”  Get that right and you can throw away a lot of hoopla that’s not appropriate for your credit union.   Do you serve the under-served or the over-served?  Are your members modest in income or have abundant disposable income?  If you’re a smaller shop, chances are your members are on the under-served side.  GREAT!  While the rest of the country is trying to deleverage, those with limited means are still prime for increasing their financial services.  What a great opportunity for you to show your stuff and be their financial savior.   NCUA is about to identify a bunch of cu’s that they qualify for the LICU (Low Income Credit Union) status.  That only means that 50%+1 of their members are geographically located in designated low income areas.  If you are looking for a higher MBL cap or secondary capital… LICU designation already allows for that.

So, we just finished the first ½ of the year.  We’ve taken our licks, got knocked down a time or two… but, like the song says… We’ll get up again. You’re never going to keep me down!  Don’t lose heart. Don’t just work harder.  Focus better and call a friend.  It’ll change your outlook!

Gregg Stockdale is President/CEO of 1st Valley Credit Union. Today 1st Valley Credit Union has over $35 million in assets and serves over 3,800 members with a full suite of financial products and services at competitive rates and with outstanding customer service. We now serve the entire County of San Bernardino. www.1stvalleycu.com