Talked yesterday about a couple of key external factors which are helping drive a potential re-look at the future of CUNA. The "credit union demographic factors" - rapidly shrinking number of credit unions and consolidating leagues - hopefully are self-evident.
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| Blame it on global warming? |
CUNA actually has some pretty good historical stats on its website, which note the # of credit unions in: 1975 = 22,600; 1985 = 17,600; 1995 = 12,200; 2005 = 9,000; 2015 = 6,200. Hope we don't need to argue about this trend, do we? Competitive, regulatory, and technology pressures are accelerating the consolidation trend.
Equally the leagues are also consolidating as the
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| Get out your crayons and fill in the blanks! |
map indicates. There simply are no longer enough credit unions in many states to support the overhead of a full-blown, independent league. It is not at all difficult to "color in" quite a few additional, "logical" near-future combinations. Most folks come up with 6-8 large regional leagues in the very near future, with of course a few die-hard independent stragglers at the fringes.
Hope nobody wants to argue about the league trend either. If you do, then you might want to look at that map a little more carefully and glance again at the rapidly declining number of credit unions.
Fewer credit unions = fewer leagues.
As they say: "That ain't rocket science!
Their are two other crucial facts about the
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| Cash flows! |
remaining 38 leagues. First, there are extremely wide variances in capabilities among the various leagues - some are very strong, some are very weak. Second, there are also wide variances in the amount and source of revenues among the leagues - some have large budgets to fund programs, most don't; and some leagues are primarily "dues funded", while others control highly profitable "cusos" to help cover league operating costs.
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| "New math" on leagues? |
The smaller leagues have had to cut programs as the number of credit unions declined - which has greatly reduced the perceived value of leagues to many credit unions, large and small alike. And, since "all politics are local", it is hard to imagine a state being "represented" by an out-of-state league or a "not-from-right-here" lobbyist - so the long term political "benefits" of league consolidation just don't really "add up"!
Many credit unions are also now turning to non-league providers for services such as auditing, compliance, data processing, marketing, and other operational service support. Neither CUNA, nor most of the leagues, are effective in providing modern, efficient financial services to credit unions - they simply no longer have the funds, staff, nor expertise to compete and stay current in a fast-changing world. Quite often credit unions are paying above market rates for "league supported/provided" services - readily available, less expensively, just a "click" away. Many past league services have been "Uber'ed" by more efficient and accessible "on-line"entrepreneurs. Even long term credit union supporters such as CUNA Mutual have vastly cut back on overall funding support for the leagues - with more cuts clearly ahead.
SO WILL YOU PLEASE GET TO THE POINT!!!
1) WHAT ARE THE FUTURE VALUE OF CREDIT UNION LEAGUES?
2) WHO KNOWS?
BUT, THAT ANSWER WILL - AND SHOULD - BE DECIDED STATE BY STATE .
3) CUNA HAS NO LEGITIMATE ROLE IN THE "SORTING OUT" OF THE LEAGUE SYSTEM.
AND SHOULD THEREFORE FREE CREDIT UNIONS - AS REQUESTED - TO PROCEED WITH THAT "SORTING OUT" PROCESS.
4) IT'S TIME !
1 comment:
But Jim, where the hell will all these self-serving self-perpetuating Credit Union League Presidents' go? They are accustomed to a high standard of living, with a lush travel budget and several golf club memberships. If we shut down these trade assocations look at the unemployment the credit union community will create? Just look at WesCorp, MembersUnited, USCentral of blessed memory. All those filthy stinking rich fat cats met conservatorship with a pink slip. Now, the Credit Union League Presidents' are sure to follow. These trade associations are self-serving and self-perpetuating, too. What is the credit union dues ROI (Return On Investment)? It is between Slim & None. And Slim left the building. The lights are still on because credit union CEO's recognize but for the Grace of G-d go I. So we continue to support these over compensated pseudo-CEO's out of pity. It is breathtaking how little these Credit Union Leagues contribute to the credit unions they are suppose to serve. They have outgrown there usefulness. Time to move on. The Leagues offer nothing that is not already available on the open market and usually at a better price point. Welcome to technology. The Leagues have no corner on the market. Credit Unions seeking to reduce their operating expenses can find better price points outside of the League "endorsed" vendors. And by the way, how much did those League "endorsed" vendors pay the League for the "endorsement?" And that's my point. The League will pimp the credit union to make the League bottom line profitable making the product unprofitable and so the credit union buys it from an independent non-League endorsed vendor. If it is League endorsed it has been marked up.
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