Executives want to make a difference and strengthen the movement.
September 16, 2013
Three former bankers who’ve become CEOs at credit unions speak about the factors that fueled their decision to switch, their thoughts on the direction of the movement, and the value that they—and other banking transplants—can bring to the job.
Put skills to members’ benefit
For the past decade, Rod Staatz has been CEO of $2.6 billion asset SECU, Linthicum, Md. But in 1996, Staatz worked for a national bank in Denver, weighing his advancement opportunities aft er about 20 years in banking.
A colleague mentioned that Bellco Credit Union in Greenwood Village, Colo., one of the bank’s largest payment processing customers, needed someone to run its retail banking operation.
Staatz knew little about credit unions but met with the CEO and “decided aft er our conversations that, quite honestly, it sounded like a lot more fun than being in the banking world.”
To that point, he’d concentrated largely on evaluating potential acquisitions of other financial institutions’ retail operations, knowing his decisions would turn off a segment of consumers but appease shareholders.
“We realized that at some point there might not be more banks to acquire and our earnings would come the old-fashioned way—from customers. It wasn’t a good long-term strategy,” Staatz says. “I thought I could take my experience in retail banking and operate for the members’ benefit, not a quarterly earnings call.”
In the past 17 years, Staatz has been actively engaged in credit union aff airs. He has testified before Congress on matters such as the Overdraft Protection Act and the creation of the Consumer Financial Protection Bureau (CFPB) and worked on behalf of Credit Union Miracle Day. He also serves on the CUNA Board of Directors.
Yet Staatz doesn’t have any regrets about his career path, because the processes he learned in the banking world helped him improve his credit unions. The credit union industry as a whole has made strides as it grows and faces more risk, becoming more rigorous in analyzing all facets of the operation, says Staatz.
“You can call that becoming more banklike, or you can call that good process, good practice, and good governance, because we’re becoming much more complex,” Staatz says. “At the end of the day, we’re serious businesses dedicated to serving members, and as such you’d better have your house in order.”
Don’t play second fiddle
The CEO position at Alliant Credit Union offered the broad responsibilities David Mooney craved aft er 25 years with J.P. Morgan Chase and its predecessors.
Recognizing that credit union principles align with his beliefs, Mooney took the reins in 2003. Under his leadership, the Chicago-based credit union has grown to $8.3 billion in assets aft er expanding its single-select employee group (SEG) charter when United Airlines, its longtime sponsor, filed for bankruptcy.
“I feel like I ‘got it’ pretty quickly,” Mooney says. “As a [banking] executive, it was a challenge talking out of both sides of my mouth, if you will, trying to promote simultaneously consumer and shareholder interests—and for that matter management interests, because those can be in contention with both.
“One of the attractions to me is the alignment of interests. The relative ease of communicating priorities to our organization just seemed very natural.”
Mooney says banking taught him business savvy— “a dispassionate view of strategic and financial priorities and evaluation”—but doubts his skills are much different from those of a longtime credit union executive.
But credit unions’ insular nature can narrow leaders’ outlook, according to Mooney. He urges a progressive approach to matters such as technology because credit unions’ size makes them more nimble than big banks constrained by legacy systems and multistate and international rules. For instance, Alliant offered remote deposit checking before all the big banks except for Chase.
“What irritates me to no end is that financial journalists oft en promote the myth that banks have superior qualities to credit unions,” Mooney says. “We have access to the same products, methods, and technology—oft en better technology.”
The banking lobby’s constant assaults on credit unions also miff Mooney, even though he recognizes it’s oft en “just political jockeying for selfinterests.”
“Clearly, the banking industry isn’t promoting credit union taxation out of patriotic duty,” he says. “Having been on both sides, I believe banks—not to mention their customers—would be better served if they focused on their own competitive capabilities than spending their attention on credit unions.”
Channel passion toward change
Last year, Greg Mitchell was part of an American Banker cover story touting the rise of community banking in the wake of big banks’ woes.
A few months later, Mitchell left banking to become CEO at First Tech Federal Credit Union, a $5.8 billion asset institution based in Oregon and California. He’s been a credit union member longer than he’d been a banking CEO—for 38 years, ever since joining Sea West Federal Credit Union during Coast Guard boot camp.
“My personal values are very much aligned with the credit union movement,” Mitchell says. “I’m delighted to be here. Hopefully, I can be a longterm contributor to the industry and movement, and I look forward to making a difference.”
Mitchell recommitted the credit union to a multiple- SEG roster of high-tech companies such as Microsoft , HP, Agilent, Google, Amazon, Phillips, and CH2M Hill.
He aims to create awareness about “what it takes to be relevant to emerging American consumers,” pushing initiatives in loan processing systems and digital banking platforms that match or beat those at big banks.
“We aspire to be America’s most admired credit union,” Mitchell says.
First Tech Federal’s board of directors has wowed Mitchell by being “informed, engaged, and passionate.” The latter trait resonates through many of his interactions; Mitchell says credit union members and employees are far more passionate than their banking counterparts.
Credit unions must channel that passion toward providing cutting-edge products and distribution channels, developing progressive hiring practices that draw specialized talent from outside the industry, and making sound financial decisions that’ll ensure the movement stays relevant long term, Mitchell says.
Also, credit unions must seize the opportunity to reach younger generations by instilling financial literacy, Mitchell says. He enjoys tutoring teens by showing them the consequences of frittering away money on shoes, “bling,” and pizza. By saving $100 a month now, they can be millionaires by retirement, he tells them; wait until they’re 40 years old to do so, and they’ll only hit $300,000.
“And I ask them, ‘Was the pizza really that good?’” Mitchell says. “If people see a future and see how easily they can accomplish their goals, it shows you care. It creates an endearing relationship that can’t be bought through [big bank] advertising.”