Two former credit union CEOs discuss strategies for success in 2023
In the ever changing economic environment, the focus of many credit union leaders this year is lending safely, growing membership and scaling solutions. We recently hosted a conversation focusing on these strategies, “Credit Union CEO Deep Dive: Positioning Your Credit Union for Success in 2023,” featuring two former credit union CEOs who became account managers at Upstart.
Drew Megrey, former CEO of Ohio Teamsters Credit Union, and Barry Roach, former CEO of Water and Power Community Credit Union, discussed how they think fintech partnerships can help credit unions brave stormy economic waters in 2023 by attracting new creditworthy members and building long term relationships with them.
With inflation and rising borrower rates, many lenders like banks have elected to pull back on lending during this time. However, Megrey and Roach discussed that these rising borrower rates have denied many borrowers access to prime credit, which opens up an opportunity for credit unions to better serve their communities in their time of need.
Partnering with fintechs to grow creditworthy members
If credit unions hope to fulfill their mission to serve their communities, fintech partnerships could enable credit unions to lend to more borrowers while minimizing loss rates. Despite having competitive products and added services, credit union members may still pass over their longstanding relationship with the credit union and turn to other lenders – and not necessarily for better rates. Fintech partnerships offer a way to provide an exceptional digital experience with minimal additional resources, allowing credit unions to focus on delivering a high-touch member experience and maintaining long term relationships.
By leading with lending in this tough time, Megrey and Roach also explained that members are more likely to remain with the credit union in the long term. While some of the largest, most conservative financial institutions are tightening credit policies and pulling back on lending, credit unions have a unique moment in time to serve members with affordable credit. By launching a product that helps the member with an immediate need, rather than a “nice to have” product like a depository account, credit unions will be able to better grow a long-term relationship with additional products and services.
Finally, Megrey explained that traditional underwriting methods are an antiquated way of understanding the entire borrower picture. A strong fintech partner should have a compliance team in place that supports credit unions navigating the increasingly complex regulatory landscape, preparing for their regulatory exams and continuing education of the rapidly changing regulations.
Why now is the time to partner
Looking to brave the economic environment ahead, credit unions need to be strategic about the partnerships they embrace and ask themselves how these partnerships are enabling them to both grow and deepen member relationships in the long-term. Given the cyclical nature of the economy, net new member relationships offer an irreplaceable asset for credit unions that wish to continue their successful growth. Though many lenders have turned to bonds and treasuries, personal loans can offer yields as high as 9 percent, and allow credit unions to gain a new member in the process that they can grow relationships with.
In case you missed the webinar, you can check out the full recording here.