MADISON, Wis. (3/11/16)--The Credit Union National Association (CUNA) Small Credit Union Committee has developed an online repository of resources supporting the Network Credit Union model.
The model envisions a group of credit unions coming together under an umbrella organization or “network” credit union with a goal of helping each of them increase operational efficiencies. While technically a merger, the approach allows each institution to maintain local identity and a degree of local control.
The National Credit Union Administration (NCUA) recently issued an opinion letter on the model--indicating that it is permissible under the Federal Credit Union Act and the NCUA’s Chartering and Field of Membership Manual. NCUA Board Vice Chair Rick Metsger indicated his support of the network credit union concept in remarks at the recent CUNA Governmental Affairs Conference.
“This is not a new choice,” Stephanie Sievers, CEO of ANECA FCU, Shreveport, La., and chair of the Small Credit Union Committee, told News Now. “But now it is a more obvious choice. And the committee believes choice is good.”
Sievers spearheaded the development of the repository.
“We are not urging small credit unions to merge,” Sievers said. “On the contrary, we believe preservation of small credit unions is critically important. More healthy credit unions mean more benefits not only for the individual institutions and their members, but also more benefits for the entire credit union movement. Small credit union leaders--including volunteers--are passionate, engaged and effective advocates. The system loses those advocates every time a credit union is part of a traditional merger.”
Sievers recognizes that financial and operational challenges for smaller credit unions are magnified in the current environment. “The sad fact of the matter is that we continue to lose about one credit union per business day to merger--a total of 1,300 throughout the United States over the past five years,” she said. “It’s no panacea, but for many, the network construct holds the promise of transforming the win/lose proposition of traditional merger into a win/win.”
Other resources are also available from the CUNA Small Credit Union Committee, including the Five to Thrive guide, a white paper of strategies small credit unions can adopt to thrive in today’s environment.