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CUNA CEO Raises Concerns about the Future of CUs
Tuesday, June 20, 2017 6:40 AM

Credit Union National Association President/CEO Jim Nussle said Friday at the Southeast Credit Union Conference and Expo that he is concerned about the future of credit unions.

He made his case using charts and citing history. In 1992, Nussle said, about 41 percent of all the assets were managed by the top 100 financial institutions. That number grew to 75 percent in 2016. In that same year, about 53 percent of total assets were managed by community banks. That number has declined to 17 percent in 2016. For credit unions, market share was 5.6 percent in 1992, and while it has ebbed up and down over the last 25 years, credit union market share edged up to 6.8 percent by the end of last year.

“The good news is that [we have] about 110 million members with $1 trillion in assets, but we’re not moving and we’re not growing,” Nussle said. “But the point I look at when I see this chart is what’s happening with the rest of the market and why is it happening. You see the smaller, community banks? I would argue the biggest story of this chart is that they are getting their lunch eaten…handed to them. Their options are running out. They had more than half of the market at one point in time and now are ready to go out of business.”

Nussle argued this is happening, in part, because community banks are not able to keep up with increasing regulatory challenges. To ensure the future of credit unions, Nussle stressed the importance of focusing on leverage advocacy offense to remove regulatory barriers.

“It is the most important thing that we do, because I believe larger financial institutions are not under the same pressure we are from the barriers being thrown up by the regulators,” Nussle said. “You will not hear Bank of America or Wells Fargo complain, expect maybe send out a press release here and there about the CFPB. They understand the CFPB will be there forever. It’s just a fact. And they’ve got the lawyers and the compliance officers and the capital to deal with it. They’re not concerned about it. In fact, they kind of like it. They kind of like it because of what is happening to the small community banks and what’s happening eventually to us.”

Nussle warned if the industry does not use advocacy offense, “we may not be here five, ten years from now to have a conference like this to even talk about it.”

The CUNA CEO also said credit unions need to continuously build awareness among members and nonmembers about the credit union difference.

Source: Credit Union Times