Feeling hunted? Not an ideal place for a credit union to find itself, but – for many CUs today – them’s the hard facts, folks.
So how can your credit union avoid mergers and acquisitions? And why should you want to? To answer these questions (and many more), we’re joined by CEO of CU Sol, Jonathan Taylor (JT) – this week on CRMNEXT’sBanking on Experience.
The whats and whys of CU Sol.
CU Sol is a CU owned CUSO formed to offer unique products and services in the CU space. With a lack of options for many credit unions (particularly smaller to mid-size), they’re about serving the underserved from both a product standpoint and a CU option standpoint.
Their new tagline is “Solutions with Sol,” with the goal being that everything they do “has heart.” And that’s part of what JT worries about for CUs and the movement today. As he says, “What tends to get lost in the mix – in the noise – is the why and heart of the piece.”
Clarifying: Mergers of Mercy vs. Mergers of Strength.
When it comes to mergers, the industry’s seen a huge uptick in the last 20 years. According to JT, there’s something like 5,000 CUs left in America, and it’s predicted that number’s probably going to get chopped in half.
Mercy Merge: occurs when a CU is going under or the regulatory entity says ok, we need you to merge in. You’ve had time to fix these issues.
- The saddest part of this, to JT? “No matter how hard credit unions try, for the most part, the history — the story of that credit union — vanishes forever.”
Mergers of Strength: two CUs (or more) that are healthy decide that, with their powers combined, they can provide more options to their members.
- JT’s take on this? “While it makes a lot of sense in a lot of cases, you do lose identity in a lot of those situations as well.”
How CUs get in this situation to begin with.
According to our expert, a lot of times it comes down to aging boards – perhaps a CEO retiring. He shares some specific examples and reiterates that, when there’s a merge, “Things change, and the membership feels it. And, in a lot of cases they move on.”
The Vendor Ecosystem that serves this Industry.
JT offers some fantastic insights (definitely listen in), but one thing to note: There are 2 schools of thought here. You can be a marketplace expert who focuses on just a few products (and does those amazingly well) or, in JT’s words, “You can be everything to everybody and be spread a mile wide and an inch deep.”
How to ensure there remains a free market.
JT really emphasizes that the CUSO space is exactly where credit unions can “stand up for themselves in every possible way.”
JT’s top tips for CUs.
More fantastic insights here, but we’ll leave it at this. “The solution for credit unions is CUSOs…to work together, to double-dip (legally) in the best ways possible. Because at the end of the day they’re spending other members’ money. And they need to leverage it as best they can and have a bigger voice shouting together.”
SNEAK PEEK for our listeners:
JT and Stephanie Smith of America’s Credit Union Museum will be doing a series that we’ll be hosting (not revealing the name just yet.) 😉 Stay tuned!
Want to contact our expert?
Visit cusol.org for all JT’s contact info or find him on LinkedIn.
Find this interview, and many more by subscribing to Banking on Experience Podcast on iTunes. You can also find us on Spotify, Google Podcasts, or visit our page on Casted.