LENDING OUTLOOK 2021 EMBRACE LASTING CHANGE - CEOs focus on the future - CUNA News
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WINTER 2020 2021 LENDING OUTLOOK EMBRACE LASTING CHANGE CEOs focus on the future Max Villaronga TFCU - El Paso
Your voice needs
to be heard!
Sharing the credit union difference with lawmakers is
more important than ever before, and your attendance
at 2021 CUNA Governmental Affairs Conference is
critical. Don’t miss your chance to learn, network
and advocate for the 120 million American
consumers who depend on credit unions
across our country.
Register at cuna.org/gac
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Contents Winter 2020
Volume 86 › Number 5
FEATURES
20 Embrace lasting change
Diversity, equity, and inclusion initiatives change board
recruitment strategies.
28 2021 lending outlook: ‘Cautiously optimistic’
A sustained economic recovery and lending
growth will require successful containment of
COVID-19.
34 Moving forward
Two CEOs share insights on adjusting to the
pandemic and approaching the future.
38 Redlining and income discrimination
Regulator finds “significant violations” in two key
areas of credit transactions.
‘It’s all about
how confident
members feel
in their job or
industry.’
JIM BLOCK
iStock
Contents
Cover, page 34 photo credit:
TFCU - El Paso
4 Credit Union Magazine | news.cuna.org/creditunionmagazine
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MUST READS
8 Digital Features 18 Chairman’s Corner
Visit cuna.org/news for the latest CUNA News Your members know credit unions are their best
Podcast episodes and other online exclusives. financial partners.
10 Editor’s Note 33 Statement of Ownership
How you manage today’s “constellation of
change” will define success. 37 Advertiser Index
12 Ideas & Inspiration 41 Branching Out
Leading during challenging times requires con- The what, when, how, and why of
tinual planning, says Maurice Smith, president rebuilding for 2021.
hing today
of Local Government Federal Credit Union and
Civic Federal Credit Union. 42 Q&A
Pamela Lambkins of Together Credit Union is
16 President’s Perspective motivated to make a difference.
Your innovation, creativity, and resilience this year
have been nothing short of incredible.
DOWNLOAD OUR
MOBILE APP TODAY
Consumers
are in better
shape
compared
with the last
recession.
CD
14
grown since COVID-19:Ideas &
58% of consumers
28 outlook
2021 lending
prefer to interact with their
channels, according to Fiserv’s Expectations and Experiences research.
Inspiration
34 Moving forward
video teller services instead of the branch: Credit unions are moving
ly branch visits, or they encourage members to use drive-thru services
The post-COVID-19 branch CUNA senior economist Loan participations help
oor encourage and remind members to maintain six-foot social distancing
looks different and functions in Jordan van Rijn on what to overfunded credit unions, says
aemployees.
tects members and safer way for members. expect for lending in 2021. Lynette Smith, president/CEO
he credit union remind people that mask use is required. of TruEnergy Credit Union.
mployees’ and members’ use.
ulate traffic flow.
POSTAL INFORMATION 15
Credit Union Magazine | Winter 2020
Credit Union Magazine (ISSN 0011-1066) is published quarterly for $83 per year by Credit Union National Association, 5710
Mineral Point Road, Madison, WI 53705. (Multiple-copy and multiyear discounts available.) Periodical postage paid at Madison,
Contents
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POSTMASTER: Send address changes to Credit Union Magazine subscription department, P.O. Box 461, Annapolis Junction, MD
20701-0461. Single issues are available; call 800-348-3646.
6 Credit Union Magazine | news.cuna.org/creditunionmagazine
Training matters.
Do it right with CPD Online.
CUNA
PROFESSIONAL
DEVELOPMENT
ONLINE
“The breadth and
depth of the courses CPD Online is the premier web-based training
are unrivaled. CUNA service for the credit union industry.
is light years ahead
of everyone when it // Increases efficiency – online access for remote training
comes to training.”
// Allows for learning flexibility – everyone can learn on
- A credit union that has their own schedule and at their own pace
been training with
CPD Online for 9+ years // Offers a consistent format – training is standardized
from one branch to another
// Eases administration – managers and HR can easily track
and monitor training progress
cuna.org/cpdonline/trainingmatters
© Credit Union National Association 2020
Digital Features
VISIT CUNA.ORG/NEWS FOR THESE ONLINE EXCLUSIVES
Don’t miss: stories of Sharing hope on International
military service Credit Union Day
In honor of Veterans Day, we shared stories of To celebrate International Credit Union (ICU) Day
people in the credit union movement who have during a year of uncertainty and anxiety, $3.2 billion
served in the military. Check out complete coverage asset Royal Credit Union, Eau Claire, Wis., held a con-
of the 2020 Salute to Veterans, sponsored by FIS, at test that allowed members to nominate someone who
news.cuna.org/veterans. inspires hope for them.
This year’s ICU Day theme was “Inspiring Hope for a
Global Community.”
“We want people to take this opportunity to shine a
light on a person in their community that truly makes
them feel hopeful,” says Jennifer McHugh, Royal’s vice
president of community engagement.
Prizes were awarded to nominators, nominees, and a
nonprofit of the nominee’s choosing.
Hear from the 2020 Credit Union Rock Stars
Several of Credit Union Magazine’s 2020 Credit Union Meeting the COVID-19 challenge.
Rock Stars appear on the CUNA News Podcast to dis- Tillery Durbin of 121 Financial Credit
cuss the innovation and creativity that makes them Union and Amber Rahn of Blue Federal
some of the best and brightest in the movement. Credit Union discuss how they watch
Episodes featured: out for members and staff. Durbin
Pathways to growth. CEOs Lisa Brown aimed to help as many people as pos-
of Tallahassee-Leon Federal Credit sible with Paycheck Protection Program loans, while
Union, Pam Brown-Graff of MED5 Fed- Rahn organized virtual events to engage
eral Credit Union, and Kabir Laiwalla staff.
of Platinum Federal Credit Union The Credit Union Rock Star program
explain how their credit unions have is sponsored by Listen and subscribe at
achieved growth in recent years. Fiserv. news.cuna.org/podcasts
A blended approach to training
Before the coronavirus (COVID-19) struck, Mountain Brown, who spoke at the 2020 CUNA HR & Organi-
America Credit Union in Sandy, Utah, was already zational Development Council Virtual Conference Col-
adjusting its training and talent development program lection, says the pandemic allowed the credit union to
to meet the future needs of employees. But when the reevaluate its curriculum.
pandemic hit, Aaron Brown, vice president of talent The Mountain America team implemented after-
and member development at the $11 billion asset class learning sessions, experience-based learning,
Digital Features
credit union, knew that goal was more important than and an audit of its training resources, including
ever. mobile-based training options.
“We needed to convert a lot of content and courses “There’s a lot of leverage we can still gain from our
to virtual, but we also needed to think about other existing tools without having to add tools,” Brown
elements,” he says. says.
8 Credit Union Magazine | news.cuna.org/creditunionmagazine
Member engagement.
Credit union excellence.
CUNA
CREATING
MEMBER LOYALTY™
“CUNA Creating
Member Loyalty™ Transform your credit union into a member
skills are critical relationship and engagement powerhouse
to the success of with CUNA Creating Member Loyalty™ (CML).
communication
because it starts with CML provides strategic guidance at the individual and
focusing on member business level, which results in a culture that exceeds
needs and helping find members’ expectations.
solutions by listening
and asking high Our collaborative process goes beyond training to generate
impact questions. If buy-in from all staff members and creates organizational
we continue to keep change that delivers results.
member interests at the
heart of our interactions Through our framework, your credit union will initiate a
and maintain personal transformation to grow your member relationships and
responsibility to assist engagement.
them, we can continue
to meet and exceed
their perceived and cuna.org/cml-20
unperceived needs.”
-Mark Stetzer, training
manager, First Florida CU
© Credit Union National Association 2020
EDITOR’S NOTE
Fast forward to 2021
How you manage today’s ‘constellation of change’ will define success.
December traditionally is a time to products and services in response. rangements, and planning for less
reflect on the year behind us and to This includes consideration of infrastructure will shape the future
look at the year ahead. board governance and recruitment for many credit unions.
But since March, the credit union practices to ensure representative The digital and virtual experience
movement has been in fast-forward service as communities evolve. is at the forefront of every decision,
mode—reconfiguring branches, ›Lending and the economy. Loan says Lynette Smith, president/CEO
supporting small businesses and growth should settle in at 6% in of TruEnergy Federal Credit Union,
communities, making emergency 2021, and mortgage refinancings Springfield, Va.
loans, caring for employees, and will ease, CUNA economists say. To futurist Amy Webb, major
reimagining talent needs. As the economy recovers, expect events like the global pandemic
The global pandemic delivered a shift from mortgage to consumer often accelerate technology trends
the future to our front doors. loans, such as auto loans, credit that stick for years to come. “Ca-
In this issue, we examine the cards, and personal loans. tastrophe tends to catalyze innova-
2021 landscape and how credit BCU in Vernon Hills, Ill., sees its tion,” she says. “Myriad factors and
unions are addressing: mortgage growth continuing in inputs create the constellation of
›Membership. The U.S. will 2021 despite “headwinds” from the change that becomes our future.”
become a minority-majority nation pandemic, says Jim Block, execu-
by 2043, the U.S. Census Bureau tive vice president/chief operating
reports, when people of color will officer. Ann Hayes Peterson
comprise a majority of the popula- ›Operations. Credit unions Editor-in-chief
tion. continue to experience the trans- Credit Union National Association
Credit union leaders are working formation of digital services and apeterson@cuna.coop
hard to understand their changing branches. Adopting new technol- 608-231-4211
marketplace and create equitable ogies, offering flexible work ar-
MANAGEMENT ADVERTISING EXECUTIVE COMMITTEE
TROY STANG // chairman, Seatac, Wash.
ANN HAYES PETERSON // vice president/editor-in-chief KARIN SAND // vice president • ksand@cuna.coop
BRAD GREEN // vice chairman, Sheffield, Ala.
apeterson@cuna.coop • 608-231-4211 920-460-7430 TONY BUDET // secretary, Austin, Texas
EDITORIAL STAFF MICHELLE DOSHER // mdosher@cuna.coop • 608-231-4006 LISA GINTER // treasurer, Lenexa, Kan.
CAROLINE WILLARD // member-at-large, Plano, Texas
LISA DUSHACK // ldushack@cuna.coop • 608-231-4220 JIM NUSSLE // president/CEO, Washington D.C./Madison, Wis.
BILL MERRICK // deputy editor • bmerrick@cuna.coop
608-231-4076 MARLENE LAUFENBERG // mlaufenberg@cuna.coop DIANA DYKSTRA // AACUL chair, Ontario, Calif.
608-231-4341
CASEY MYSLIWY // deputy editor • cmysliwy@cuna.coop DIRECTORS RON SMITH // Tennessee
608-231-4213 EDITORIAL ADVISORY BOARD DALLAS BERGL // Indiana STEPHANIE TEUBNER //
MICHELLE WILLITS // deputy editor • mwillits@cuna.coop BRIAN BEST // Florida Wyoming
BRAD BARNES // Air Academy Federal Credit Union, PAT DRENNEN // Iowa JOE THOMAS // Virginia
608-231-4067
Colorado Springs, Colo. SCOTT EARL // Colorado SCOTT WOODS // South
RON JOOSS // senior editor • rjooss@cuna.coop CHARLES ELLIOTT // Carolina
SANDI CARANGI // Mercer County Community Federal Credit
608-231-4321 Mississippi
Union, Hermitage, Pa. LEADERSHIP
JENNIFER PLAGER // senior editor • jplager@cuna.coop TERESA FREEBORN //
MICHELLE HUNTER // CU of Southern California, Anaheim California JIM NUSSLE //
608-231-4290
GARY FURTADO // Rhode president/CEO
KEVIN KESECKER // SECU, Linthicum, Md.
DESIGN & PRODUCTION Island JILL TOMALIN //
STEVEN LANGLEY // Schools Financial Credit Union, ELIZABETH HAYES // Maine chief operating officer
BEN TENORIO // senior digital media designer Sacramento, Calif. TOM KANE // Illinois RYAN DONOVAN //
DEBIE KEESEE // chief advocacy officer
CARRIE DOYLE // graphic designer RICHARD S. MILLER // FeatherStone Planning and Consulting Washington GREG MICHLIG //
JEAN PETERSON // Aberdeen (S.D.) Federal Credit Union BRETT MARTINEZ // chief engagement officer
SUBSCRIPTION SERVICE
California BRAD MILLER //
IDREES RAFIQ // Credit Union Resources, Texas MARIA MARTINEZ // Texas executive director,
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P.O. Box 461 PATRICK PIERCE // American Association of
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10 Credit Union Magazine | news.cuna.org/creditunionmagazineNominate your
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Each year, Credit Union Magazine honors unsung professionals who devote their talent to
shaping a brighter future for members and their community. Nominate your Credit Union
Hero to give them the recognition they deserve.
What makes a Credit Union Hero? Qualified individuals:
// Are credit union system employees or volunteers
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SPONSORED BY:Ideas & Inspiration
Be a pineapple
While a pineapple is prickly on the outside, it’s a sweet of others because we have value,” she says.
fruit that can teach us how to react with courage and ›Is sweet on the inside. The most dangerous weapon
authenticity when faced with challenges. in our arsenal is words—whether spoken, written,
“The ‘Pineapple Principle’ is about going through or typed on a keyboard. Make sure your words are
these changes and acknowledging the challenges not belittling or negative. Rather, use your words to
we face and other people face,” says Annie Meehan, spread kindness and encouragement. “Remind your-
a professional speaker with AM Speaking & self that we’re all feeling the disconnect,” Meehan
Consulting. “When we’re true to who we are says. “That sweetness inside can come through
and when we’re courageous about taking verbally by saying kind words or sharing good
care of ourselves, we can care for other news, hope, and positivity.”
people and show up even better.” ›Is prickly on the outside. Like a pineapple,
Meehan explained the Pineapple Prin- we’re sometimes prickly. But Meehan reminds
ciple during the 2020 CUNA HR & Orga- us that being prickly is a choice each person
nizational Development Council Virtual makes. “We still have a choice to be kind,” she
Conference Collection. says.
The pineapple: Remembering the Pineapple Principle
›Stands up straight. When you come during the coronavirus (COVID-19) pandemic
in contact with another person, don’t is especially important, Meehan says,
look down at your phone, Meehan says. because people didn’t sign up for remote
Instead, look at the person. “When you work or other challenges that leave them
stand up straight, you can truly see stressed and anxious.
people.” “The Pineapple Principle is about valuing
›Wears a crown. By seeing yourself myself and then valuing others, showing up
wearing a crown, you’ll see the value in with kindness and encouragement,” Meehan
yourself, Meehan says. And that applies says.
to others as well. “By valuing myself and “Part of being authentic,” she adds, “is
others, I can then show up and take care acknowledging this is hard for everyone.”
Prepare for a crisis before it hits
Crises typically are unexpected. But preparing to lead believe they are responsible for this role, but HR is the
during a crisis should take place continually. department that ensures the credit union is staffed
“Sooner or later, no matter how well things are with the right people and that the applicable training
going, you’re going to get punched in the nose,” says is available to develop
Maurice Smith, president of Local Government Federal their talents and leader-
Credit Union and Civic Federal Credit Union, both in ship skills.
Raleigh, N.C. “There will be a challenge that arrives at “The monkey is on your
your credit union’s doorstep.” back. You have to rise
The preparation for the kind of leadership required to the occasion,” Smith
during a crisis needs to begin long before the crisis says. “There are too
occurs, says Smith, who spoke at the CUNA HR & many stakeholders and
Ideas & Inspiration
Organizational Development Council Virtual Confer- followers who need you
ence Collection. And that preparation should involve to be successful. If you do
everyone at the credit union. that, your leadership will
Smith says it’s imperative that human resources be prepared for today,
(HR) take the lead in preparing the credit union—and tomorrow, and whatever
its employees—for a crisis. Other departments may crisis may come.” Maurice Smith
12 Credit Union Magazine | news.cuna.org/creditunionmagazineLenders capitalize on digital channel trends
Since the onset of the coronavirus (COVID-19)
pandemic, consumers have relied increasingly on
Hungry for relevant credit offers
the digital platform to drive commerce, as 40% of Consumers value credit offers that are customized
consumers now use these channels more frequently, to their financial needs, according to TransUnion,
according to a survey from TransUnion. with more than two-thirds responding favorably.
The increase is happening at a time when 60% of
consumers say that most of their financial transactions
are conducted via mobile applications, the survey
reports.
One-third of consumers engage with their preferred
financial institution multiple times a week via digital
channels, and roughly two in three use such platforms
33%
a minimum of once a week. Very important to
Half of financial executives polled by TransUnion receive tailored offers
believe lending will take a year or longer to return to
pre-COVID-19 levels.
However, the same percentage of executives also
noted their organizations will be making more invest-
ments in digital capabilities as a result of the COVID-19
pandemic.
Consumers also are hungry to receive relevant
credit offers that are tailored to their financial needs.
According to the survey, 33% of consumers found
33%
Somewhat important
customized credit offers to be very important and to receive tailored
another 33% cited this as somewhat important. offers
To generate more leads and capture market share,
lenders are capitalizing on these digital trends,
TransUnion reports. Source: TransUnion
1st United supports student ambassador program
An enterprising high school student was the impetus social media with the credit union’s assistance.
for a successful financial wellness program at $1.2 The project has turned out to be a win-win for the
billion asset 1st United Credit Union, Pleasanton, Calif. credit union: Great engagement with a young demo-
After attending a 1st United financial education graphic and lots of financial education.
workshop hosted by Lisha Fabris, the credit union’s That said, Fabris admits to a little hesitation at the
communication manager, Mission San Jose High outset.
School student Jatin Chadha asked Fabris about “I was a little cautious about having young people
expanding an existing ambassador program at Mission teach some of these concepts that we’ve been
to other high schools. teaching for four or five years because we can get
Chadha worked with 1st United to develop the pretty technical,” says Fabris. “The kids have done a
Ideas & Inspiration
Youth Financial Literacy Ambassador (YFLA) program, great job. Even people at the credit union are amazed
a train-the-trainer partnership in which students learn how well they’ve grasped it.”
financial concepts and host classes with their peers to Fabris adds that the peer-to-peer teaching aspect
share their new knowledge. creates a new set of obligations for the credit union.
The YFLA program includes student members who “There’s much more of an onus on the credit union to
support each other through education, marketing, and train the trainer,” she says.
Credit Union Magazine | news.cuna.org/creditunionmagazine Credit Union Magazine | Winter 2020 13Branching today
DOWNLOAD OUR
MOBILE APP
$
Illustration credit: Carrie Doyle
Mobile and online banking use has grown since COVID-19: 58% of consumers prefer to interact with their
primary financial institution via digital channels, according to Fiserv’s Expectations and Experiences research.
More members use drive-thru and video teller services instead of the branch: Credit unions are moving
from open branches to appointment-only branch visits, or they encourage members to use drive-thru services
or video teller services when available.
Social distancing markers on the floor encourage and remind members to maintain six-foot social distancing
Branching Today
when inside the branch.
Plexiglass across teller stations protects members and employees.
Signage on doors and throughout the credit union remind people that mask use is required.
Sanitizer stations are available for employees’ and members’ use.
Directional arrows on the floor regulate traffic flow.
14 Credit Union Magazine | news.cuna.org/creditunionmagazineIdeas & Inspiration
Tighter wallets this winter
Americans predict they will spend an average of $805 on holiday gifts this year, significantly below the 2019 esti-
mate of $943. This October holiday spending projection is close to the level Gallup measured after the Great
Recession.
Average amount spent on holiday gifts
906 943
885
$801 786 781 812 785 $805
740 715 712
2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020
Source: Gallup
Ideas & Inspiration
Credit Union Magazine | news.cuna.org/creditunionmagazine
pg_15_Mercury-Mech.indd 15
Credit Union Magazine | Winter 2020 13
10/29/20 9:54 AMPRESIDENT’S PERSPECTIVE
Flexibility in the face of challenges
Your innovation, creativity, and resilience this year have been nothing short of incredible.
Lending has certainly taken on a waivers to low- and no-interest unions this year have been noth-
new meaning in 2020. In good times loans. ing short of incredible, all the
credit unions are there to meet Once government relief pro- more so because you did this to
member credit needs, whether it’s grams came together, credit help your members get through
to finance a first car, a mortgage on unions quickly found their role, a worldwide crisis on an unprec-
a dream home, or a small business. becoming Paycheck Protection edented scale. It’s that fantastic
Credit unions provide that next Program (PPP) lenders almost work that will help us foster
step forward. overnight and making loans to change in Washington.
This year, loans became about businesses banks turned away In addition to boosting lend-
something more—in many cases because they were too small. ing to help members, the credit
they’re vital for survival. The PPP resulted in a deploy- union system worked more
The normal course of daily life ment of nearly $669 billion, closely than ever to support
shifted dramatically in March overseen by regulations literally each other.
as the pandemic forced schools thrown together in a matter of The National Credit Union
and businesses around the coun- days. While CUNA and leagues Foundation launched its CUAid
try to close. pushed for clarity and guidance App, an evolution of CUAid
As Americans, along with the on PPP loans, credit unions had that works to ensure there is a
rest of the boots on continuous pot of money ready
world, found the ground to deploy as soon as disaster
their busi- getting loans hits. Already the Foundation
nesses shut- as small as has made more than $100,000
tered or their EVEN AS $1,000 to in grants to help credit unions
paychecks businesses on the front lines of wildfires,
paused (or CONGRESS AND THE to prevent floods, and other disasters.
canceled), ADMINISTRATION many Amer- Leagues and state foundations
suddenly icans from found ways to provide credit
loans weren’t BEGAN FORMULATING losing their unions with important personal
for reach- A RESPONSE, CREDIT jobs. Cred- protective equipment and other
ing dreams. it unions resources to stay open while
They filled
UNIONS PUT helped keep keeping staff and members safe.
more basic SOLUTIONS INTO more than We’re proud of credit unions
needs. ACTION. 100,000 every day. But it’s impossible
As we’ve Americans to ignore what we’re capable of
seen with employed when things look their worst.
other crises through PPP Our mission and structure help
in the past, loans. us stand out. But credit unions’
credit unions acted as financial CUNA is pushing Congress and people-helping-people attitude
first responders. regulators to examine outdated helps us go above and beyond
Even as Congress and the regulations and laws that are for our members when they need
administration began formulat- hindering our economic recov- it most.
ing a response, credit unions put ery, including expanded liquidity
solutions into action. As branch- resources and member business
es closed, credit unions worked lending opportunities.
with members on alternative NCUA Chairman Rodney Hood
President’s Perspective
ways to reach their money, told me himself how impressed
including enhanced drive-thru he was with how credit unions JIM NUSSLE
and mobile capabilities. immediately went to work, find- President/CEO
If there was a way to help a ing safe and sound ways to help Credit Union National Association
member, credit unions did it— those who needed it. jnussle@cuna.coop
from paycheck replacements, The innovation, flexibility, and 202-508-6744
skipped loan payments, and fee creativity I’ve seen from credit
16 Credit Union Magazine | news.cuna.org/creditunionmagazineThe essential professional communities
for credit union executives.
Insightful
resources.
Valuable
connections.
Be part of a credit union-specific, member-run professional network
of more than 7,300 credit union leaders. CUNA Councils connects
passionate people, great ideas, original content and relevant resources.
Why join CUNA Councils?
• Connect with peers who share your concerns and interests
• Stay current with trends and topics impacting your credit union and your work
• Unlock fast and easy access to trustworthy information, advice and solutions
• Proactively expand your network of credit union professionals and grow
in your career
• Find new energy and enthusiasm for your role
Join at cunacouncils.org/membershipCHAIRMAN’S CORNER
A brighter future
Your members know credit unions are their best financial partners.
Credit unions have proved their Directors, I got a front-row seat to otherwise have a voice in the
value and partnership to members witness the difference you made, financial services marketplace.
every single day of this memorable and I could not be prouder of the This world-class movement is so
year. way credit unions put their feet on ready for the opportunity to raise
No one could have anticipated the pedal, full throttle. the bar of financial inclusion and
the twists, turns, and curveballs to deliver next-generation service
that 2020 would throw out, but it Accelerating forward to Main Street.
is awe-inspiring how quickly credit Looking ahead, it’s clear that the CUNA and the leagues fulfill a
unions doubled down on the “peo- financial services landscape and critical role in enabling a future-
ple helping people” mission when how we serve consumers will focused operating environment for
consumers most needed a financial never be as it once was. What credit unions.
partner. we proved this year is that credit Consider that your advocacy in
Think back to early this year, unions can be even better and statehouses and inside the Belt-
when the first coronavirus more relevant. way resulted in flexibilities allow-
(COVID-19) cases were confirmed Connecting with members is ing credit unions to safely serve
in the U.S. Credit unions rapid- the movement’s North Star. The their members during the pan-
ly worked together to write the coming year will be important for demic, such as remote notariza-
playbook, seemingly the industry tion and the ability to hold virtual
flying the plane as the pace board and annual meetings.
as it was being built. of change Why shouldn’t we advocate to
As states issued in financial make these conveniences perma-
executive orders services nent for members?
closing many sec-
CONNECTING continues to Advocacy is a full-time job.
tors of the economy, WITH MEMBERS accelerate. This year’s elections ushered in
collective advocacy IS THE Advancing some new representatives and the
efforts ensured cred- the speed opportunity for our movement to
it unions were des- MOVEMENT’S of digital help them come to know the cred-
ignated as essential NORTH STAR. adoption in it union difference and become
businesses so they the regulated our champions.
could keep operating financial ser- As consumers emerge from
and serving their vices space is 2020’s challenges and look toward
members. a necessary better days ahead, I believe they’ll
When Congress and winning look back and know credit unions
drafted the first federal relief pack- strategy for credit unions as they had their back.
ages, in some cases there were no strive to remain relevant and grow Your members know credit
specific mentions of credit unions. market share. unions are their best financial
CUNA, leagues, and credit union While we expect competition partners.
advocates mobilized to message among traditional financial insti- Let’s keep proving them right
Congress, and we successfully tutions, the intensity of competi- by advocating for and defining for
addressed that issue. tive forces from the nonregulated them a brighter financial future.
Credit unions then became sector also is going to intensify.
important conduits for getting Because achieving growth and
money into the hands of con- capturing market share still
sumers who had to shutter their matter, we must strike a balance TROY STANG
businesses or who lost jobs. between maintaining human CUNA Board Chair
President/CEO
Chairman’s Corner
From Paycheck Protection connectivity and accelerating to
Program loans that helped to save make greater strides into digital Northwest Credit Union
millions of jobs to modifying loans technologies. Association
that kept people in their homes, The credit union environment tstang@nwcua.org
you made a difference. is grounded in its historic roots, 503-350-2212
As chair of your CUNA Board of serving those who might not
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© Credit Union National Association 2020EMBRACE
LASTING CHANGE DARLA DERNOVSEK
Diversity, equity, and inclusion initiatives change
board recruitment strategies.
Embrace lasting change
Creating a board of directors that members and and senior leaders. While embarking on a continuous
employees alike see as leaders who want to hear DEI journey is no small task, the alternative is losing
the concerns of “people like me” is a vital part of touch with member needs.
diversity, equity, and inclusion (DEI) initiatives.
Fastest-growing demographic
Making DEI part of leadership selection and ongoing Greylock Federal Credit Union, Pittsfield, Mass., serves
operations is a never-ending journey that mirrors the communities in western Massachusetts, eastern New
evolution of their communities, say board members York, and southern Vermont that today are 90% white.
20 Credit Union Magazine | news.cuna.org/creditunionmagazineClockwise from far left: Carlos Ruiz, board chair, Seat-
tle CU; John Bissell, CEO, Greylock FCU; Robert Ca-
marillo, board chair, Ironworkers USA FCU; Sheila LaBar-
bera, board member, Greylock FCU; Ty Allan Jackson,
board member, Greylock FCU; Teri Robinson, CEO,
Ironworkers USA FCU; and Tonita Webb, EVP/COO,
Seattle CU.
Yet the fastest-growing demographic groups in those members who are women or people of color. The
areas are immigrants and people of color. board unanimously committed to the Credit Union DEI
“If we want to be here thriving in 20, 30, or 40 years Collective Pledge to Action and has added “accessibil-
as a region and as financial institutions, we need to
embrace the change that is happening all across
America,” says John Bissell, CEO of the $1.4 billion
asset credit union. Focus
Embrace lasting change
Considering white, middle-class experiences as the
norm and all other experiences and value systems as ›Strive to mirror your members’ demographics
“other,” he says, benefits a narrower demographic. on the board.
Roughly seven years ago, Greylock Federal leader- ›A diverse board allows the credit union to be
ship realized they needed to work toward having a more innovative.
board and workforce that reflect the wider community. ›Board focus: Board diversity provides a better
Due to that work, Greylock Federal has: understanding of members’ needs.
›Assembled an 11-member board that includes six
Credit Union Magazine | Winter 2020 21ity” to its Inclusion, Diversity, Equity, and Accessibility LaBarbera won election and became the first woman
(IDEA) Program. to chair the board.
›Increased the percentage of employees of color from She says creating a more diverse board makes it
less than 5% in 2015 to 10% in 2020. easier to consider new ideas.
›Developed products that meet the needs of a “When you sit in a room where the demographic
broader range of members. The credit union offers is all the same, you knew what you were up against
more than 25 loans, including mortgages, that expand because they all had the same thought process,”
access to home ownership. LaBarbera says. “Today, everyone has different
›Reviewed lending bias in credit scoring and account perspectives.”
decisioning with the help of a data expert from a
minority-owned business. Start with the ‘why’
›Partnered with community organizations that serve Knowing the “why” for DEI efforts is critical to suc-
specific demographic groups, including the Massachu- cess, says Samira Salem, CUNA’s vice president of
setts Small Business Development Center Network, to diversity, equity, and inclusion. For example, Greylock
gain insights into community needs. Federal pursues DEI both because it’s the right thing
to do and because it helps reach members who rep-
Finding the path to leadership resent the credit union’s future growth (“2 business
Recruiting a diverse board takes time and persistence. impacts,” p. 24).
Greylock Federal board members Ty Allan Jackson “This approach is a lifestyle choice,” she says. “It
and Sheila LaBarbera took different paths to board means applying a DEI lens throughout your organiza-
service. tion and to your products, services, and outreach to
Jackson, who is Black, joined the board in 2015 after current and potential members. It requires a high level
being introduced to the credit union during two dinner of commitment and clarity about why you’re doing
events. Jackson is the founder of Big Head Books LLC this work.”
and co-founder of Read or Else, which combats the Internally, DEI creates organizations that are more
cycle of illiteracy. He appreciated Greylock Federal’s diverse, more inclusive, and more equitable. Exter-
efforts to verify that he had the “caliber and quality” nally, DEI helps organizations have a greater impact on
to serve, as well as the credit union’s direct approach marginalized populations.
of asking him to join the board. For example, Salem says recent evaluations of both
“
the Coopera Hispanic Outreach program and the
Juntos Avanzamos designation found credit unions
that participated in these programs achieved higher
growth in membership, loans, and assets than those
that did not.
“It should come as no surprise that diverse and
You have to do the inclusive organizations are more collaborative, more
innovative, and better able to avoid risks,” Salem says.
legwork.” “We see better team performance, customer orien-
tation, and improved decision-making. Ultimately,
becoming more diverse, equitable, and inclusive is a
TY ALLAN JACKSON
win-win for all.”
Rebuilding with diversity
When other credit unions complain about their Diversity has been an important part of efforts to
inability to attract diverse board members, he wryly rebuild Ironworkers USA Federal Credit Union. The
responds, “How many did you actually ask?” Portland, Ore.-based credit union increased its assets
“You have to court diverse board members, you from $7.5 million in 2010 to $56 million in 2020 by
have to do the legwork, and you have to be able to see broadening its base of union ironworkers across the
Embrace lasting change
their level of commitment to the community,” Jackson country.
says. He has “great pride” in serving on a board that Board Chair Robert Camarillo says that as more
includes people who are Black, Hispanic/Latinx, and women and workers of color join the Ironworkers
female. Union, they want to see “people who look like them”
That wasn’t always the case. in leadership and on the board. Achieving that at Iron-
LaBarbera sought a seat on the all-white, all-male workers USA Federal meant ending traditional refer-
board in 1999. A board member suggested it was ”not rals for board seats.
the right time” for her to serve. Despite the pushback, “I’m proud of the work we’ve done to reduce
22 Credit Union Magazine | news.cuna.org/creditunionmagazine“
consider new approaches, such as loan products
tailored to ironworkers’ needs, CEO Teri Robinson
says. Meanwhile, Ironworkers USA Federal staff has
grown from five to 10 employees, allowing Robinson
Everyone has different to recruit two bilingual Latino employees to boost
engagement among new members.
perspectives.” “Because we’re progressive, our board is diverse
enough to understand we need to move ahead as a
SHEILA LABARBERA credit union to survive,” she says.
To ensure that diversity continues, Camarillo plans
to introduce a formal DEI policy for board adoption.
barriers and be more diverse and inclusive,” he says. Too many organizations have employees who are
Volunteer leaders on the six-member board and more wary than welcoming to diverse populations,
four-member supervisory committee include three Camarillo says. “That attitude drives a lot of people
people of color from varied age groups, starting at age away.”
25. Finding those talented candidates took some work
but wasn’t too difficult, Camarillo says. Aiming for lasting change
A more diverse board is also more willing to Many experts say DEI must start with the CEO, says
‘LOOK FOR CHAMPIONS’
Credit unions can work toward greater diversity, equity, and inclusion (DEI) with these ideas from
Greylock Federal Credit Union, Ironworkers USA Federal Credit Union, and Seattle Credit Union:
Make a commitment. The Credit Union DEI Collective offers webinars and materials
that create a framework for diversity efforts. The board can formally commit to the col-
lective’s Pledge to Action or approve a related initiative or policy.
Network and ask. Partnering with community organizations can help credit unions find
talented young professionals with diverse backgrounds and talents. Asking them to
become board candidates reinforces your commitment to DEI.
Seek talents, not tokens. Don’t appoint board members based solely on demographic
characteristics. Focus your search on finding the right combination of skills, insights, and
demographic characteristics.
Offer training and coaching. The board, CEO, senior executives, and all employees
can benefit from in-depth, repeated DEI training.
Look for champions. Diversity efforts should be led by the CEO or another senior
executive with the support of the board, where more diversity champions may emerge.
Recognize the role of board size. It can be easier to add diverse members to a larger
board. But credit unions can also shrink the board to reduce over-representation by cer-
tain demographic groups. Seattle Credit Union began with 12 members before drop-
Embrace lasting change
ping to five members. It now plans to gradually expand the board by adding strong,
diverse candidates.
Build trust and empathy. Hold events or meetings that help board members relate to
each other on a personal level.
Credit Union Magazine | Winter 2020 232 BUSINESS IMPACTS
Fostering diversity, equity, and inclusion (DEI) isn’t simply the right thing to do, it’s good for busi-
ness, says Samira Salem, CUNA’s vice president of diversity, equity, and inclusion. More than
60% of credit union membership growth has come from people of color, she says, citing CUNA
Mutual Group research.
“Think of DEI as a three-legged stool that includes the values case, the business case, and the
policy/regulatory case,” Salem says. “Credit unions have a values case for DEI anchored in our
cooperative principles and values of people helping people and serving all communities. Plus,
our structure ensures credit unions’ success depends on that of our members and communities.”
Salem offers two business impacts of DEI:
1. Access to a growing market. The U.S. will become a minority-majority nation by 2043, the
U.S. Census Bureau reports, meaning people of color will comprise a majority of the population.
Credit unions need to understand the changing marketplace and create equi-
table products and services, and be responsive to these new groups.
2. Financial performance. Diversity is associated with stronger finan-
cial performance. Companies in the top 25% for gender diversity on their
executive teams were 21% more likely to have above-average profits,
according to McKinsey & Co.
According to a study by Deloitte, 69% of executives rate DEI as an
important issue and 78% of executives report it increases competitive
advantage. At the same time, 85% of CEOs
whose organizations have a diversity and Hear more from
inclusion strategy say it has enhanced their Samira Salem at
organization’s performance. news.cuna.org/podcasts
Carlos Ruiz, board chair at Seattle Credit Union. experiences” that help them ask tough questions
“But who does the CEO report to?” he asks. “And about products and services.
how many boards are well-versed in DEI topics?”
Without a deep understanding of DEI’s role and Calling for courage
purpose, credit unions risk falling for the lure of Becoming more diverse requires courage from execu-
achieving a quick win by “checking the box” to show tive staff and board members alike.
they have diverse board members. For example, the Seattle Credit Union board weath-
Tonita Webb, executive vice president/chief oper- ered criticism from members when it decided not to
ating officer at the $910 million asset credit union, says recommend board candidates for election at the 2018
lasting change instead relies on a long-term plan to annual meeting because the candidates didn’t match
educate staff and remake the board. DEI goals.
Seattle Credit Union began conversations about “You have to go against the status quo, especially
DEI seven years ago, and launched its plan about when you’re doing it when not everyone else is, and
five years ago. Webb says the former City Employees DEI is not the buzzword,” Webb says.
Credit Union gained a state community charter in Ruiz adds credit unions must help board newcomers
1998. from diverse backgrounds fight the “imposter
“But that didn’t bring any diversity, so we knew we syndrome” that makes them feel unworthy of sharing
Embrace lasting change
needed to change that,” Webb says. their opinions.
Today, the credit union uses an experience matrix Ruiz leads a consulting firm, Sidekick Consultants
to review all the elements that comprise a qualified LLC, that provides strategic and operations consulting
board member, including diverse demographic char- to nonprofit organizations.
acteristics. “It’s a robust matrix,” Ruiz says. “We look “As board members, you have to push through the
and see where we need more expertise, voices, and fears and say, ‘My voice is equal to everyone else’s
perspective on the board.” voice,’ ” Ruiz says.
The result is a slate of strong candidates with “lived Board diversity has led Seattle Credit Union to intro-
24 Credit Union Magazine | news.cuna.org/creditunionmagazine“
professional challenges but says she had a relatively
easy path to marriage and parenthood compared to
people in the LGBTQ community.
“It’s important that all of us understand we have
DEI requires a high level of biases and we walk in privilege,” Webb says.
Recognizing that reality can help credit union
commitment and clarity in boards and executives have meaningful conversations
along their ongoing journey toward meeting member
terms of why you’re doing needs through greater DEI.
this work.” Ruiz hopes that in the years ahead, more credit
unions will ask hard questions about why so few
people of color are promoted to senior executive or
SAMIRA SALEM CEO positions, or invited to join the board.
“If you’re not incorporating the board in these
efforts, you’re going to have limited effects at best,”
duce new products aimed at diverse member needs, Ruiz says. “It’s where you’re truly creating opportunity
including a bike loan, a renter’s loan, emergency within a diverse community.”
microloans, and citizenship loans for up to $2,400.
Loans designed for Muslim members charge only fees
since their faith does not allow them to pay interest.
Resources
Walking in privilege
Webb says all credit union leaders—both employees ›CUNA DEI training resources: cuna.org/learn
and volunteers—likely benefited from some form of ›Credit Union DEI Collective: cudeicollective.org
privilege. As a Black, heterosexual woman she faced
ALREADY SOLVING
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institution’s performance, the challenges are growing even more demanding
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Learn more at www.bokfinancial.com/institutions. Embrace lasting change
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Credit Union Magazine | Winter 2020 25
pg_33_BOK.indd 2 8/3/20 2:51 PMADVERTORIAL
‘Solopreneurs’ find a match in credit unions
Most sole proprietors want to expand their business but only 26% have applied for financing.
Sole proprietors, independent government began supporting The needs of the solo SMB, how-
contractors, or “solopreneurs.” No the Paycheck Protection Program ever, more closely mirror those of
matter what you call them, these (PPP) in response to the coronavi- a consumer, allowing credit unions
smallest of the small businesses rus (COVID-19) pandemic. to expand wallet share and instill
(SMB) represent a unique opportu- Sole proprietors, who represent loyalty without heavily investing in
nity for credit unions. 81% of all small businesses, found commercial platforms.
A recent Bank Administration it difficult to access PPP funding Consumer lending platforms
Institute study revealed that 79% even when approaching their make it possible for community
of small business owners use the own financial institution. Fintech lenders to satisfy both the personal
same financial institution for their lenders took advantage of the and business needs of solo SMBs
personal and business accounts. opportunity to fulfill solo business without heavy investments in com-
Quite often, the needs and prefer- needs, issuing $4.7 billion in loans mercial platforms.
ences of solo SMBs closely mirror and becoming the fourth-largest Lenders should consider a
those of the business owner, allow- supplier of PPP financing to date. complete loan origination system,
ing credit unions to serve both. In the process, fintech lenders offering streamlined processes
This expands member wallet share took more than lending business and workflows, as well as a flexible
without the need for more exten- from credit unions. These tech-sav- online portal that reduces the need
sive commercial platforms. vy market entrants also stole mem- to enter duplicative data.
Because many solo business ber loyalty. When integrat-
owners operate as independent A COVID Loan ing the right set of
“
contractors or sole proprietors, Tracker survey solutions, financial
they have no employees and claim reveals that The needs institutions can
income on their individual tax
returns. Their banking needs are
customer satis-
faction with many
of the solo remove many of
the manual steps
naturally simplified compared to primary finan- SMB closely associated with
that of a larger SMB and are often
limited to a business checking
cial institutions
dropped dramati- mirror those of
“ underwriting and
also automate
account. cally as businesses credit score consid-
However, it is important that went through the a consumer. erations, rules and
credit unions not lose sight of the PPP application internal policies
lending needs of sole proprietors process. Nearly to reduce the total
or even the needs of the one-per- a quarter have considered ending time to cash and remove potential
son shop. According to the Fed- their current banking relationship. credit risks.
eral Reserve Bank’s 2019 Small By 2027, solo small business The financial institution of tomor-
Business Credit Survey covering owners or freelancers will account row will largely be built on the
non-employer firms, 71% of solo for much of the workforce, accord- business of solo SMBs, and finan-
SMBs want to expand their busi- ing to a study conducted by Edel- cial institutions that can meet their
ness but only 26% have applied for man Intelligence. They represent needs today will be positioned for
any kind of financing. a unique opportunity credit unions. the lion’s share of their business.
Instead, solo SMBs rely on per- Nearly a third of financial insti- To be part of the future, consider
sonal funds, borrow from family tutions are servicing commercial delivering mobile-ready applica-
and friends, or use a personal cred- clients from retail platforms that tions that can be submitted in
it card before seeking a business lack business-specific products and minutes and seamless integrations
loan. services. For larger employer firms, that carry them—and your team—
With no commercial credit this attempt to square peg com- effortlessly to close.
history, non-employer firms are mercial clients into a round hole
often passed over by financial results in low satisfaction. STEVE HOKE is vice president
institutions for business loans, In fact, 67% of SMBs say their & general manager at Finastra.
Advertorial
even though 58% are considered bank does not offer services they Contact Finastra about the Total
a low credit risk. This became would be willing to pay money to Lending experience at
particularly evident as the federal receive. finastra.com/consumermoments.
26 Credit Union Magazine | news.cuna.org/creditunionmagazinePresident’s Perspective Credit Union Magazine | Date Year 27
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