“What keeps you awake at night” is a question six credit union executives addressed last week at the Cornerstone Credit Union League’s Leadership Conference & Expo in San Antonio. Shawn Bailey, president and CEO of AMOCO FCU facilitated the best practice session. Panelists included:
Lily Newfarmer, Tarrant County CU (Fort Worth, Texas)
David Frazier, Community Resource CU (Baytown, Texas)
Jackie Kapalski, CTECU (Bellaire, Texas)
Michael C. Engel, Chemcel FCU, (Bishop, Texas)
Christa Hollier, Golden Triangle FCU (Groves, Texas)
With assets of $57 million, Kapalski says competing with the larger financial institutions in their community is a real challenge.
“We’re the little guy on the block,” she told the credit union audience. “With an aging membership, we’re really having to focus on how to grow our membership and attract a younger demographic.”
That’s a struggle Hollier said they too struggle with. “Our market is saturated with credit unions and other financial institutions,” she said. “Therefore, building relationships with our members is critical to our survival.”
Engel acknowledged that competition comes from everywhere, and so he told the credit union audience that it’s very important to know your market and understand where there is growth potential.
As the CEO of a $306 million in assets credit union, Frazier said there isn’t one thing alone that keeps him awake; instead, he said it’s all threats coming together all at once that is concerning to him – like interest rates, compliance, taxation etc.
“Having come from the banking side, I can say that it is a very different environment. Credit unions are altruistic and I really enjoy this environment. I’m concerned, however, that our philosophical values would change if we lost our tax-exemption,” Frazier told the credit union audience.
Newfarmer echoed Frazier’s sentiments.
“I’m really good at dealing with the things I can control, but it’s the things that I cannot control that cause me to lose sleep,”
Newfarmer said. “These things we can’t control include squeezed margins and regulatory burdens.”
Additionally, with emerging payment systems, Newfarmer says members pulling out their debit cards less and less; so this is an area of concern. Secondary capital is another issue that weighs heavy on Newfarmers mind.
During the Q&A portion of the best practice session, a question was asked about board terms; specifically, should there be term limits. Overwhelmingly, the panelist did not feel term limits were necessary.
“As long as the board member is productive and contributing to the overall growth of the credit union, I don’t think age and term matter,” Newfarmer responded. “We have seasoned board members and we have younger board members, and they all bring value to our organization.”
“It takes a long time to develop the necessary skills, knowledge and understanding to serve on a credit union board. This is a complex business, so I think we need longevity on the board,” Frazier added. “I just don’t think turnover is a good thing.”
“I agree. Longevity provides a great deal of value,” Engel chimed in.
The panelists also touched on new products/services they’ve just recently rolled out or plan to roll out in the near future. Kapalski said they rolled out their electronic loan application Sept. 1, and are currently looking at converting their core processing system.
As a result of declining branch traffic, Newfarmer says they’ve just launched their personalized mobile app. They are also looking at payment systems and how they can be in that space.
Frazier said they expect to roll out remote deposit capture in November, and during the first quarter of 2014, they plan to revamp their online loan application.
Engel says they just recently rolled out their mobile app and have places to offer remote deposit capture in the near future.
Bailey shared his thoughts on technology with attendees, saying that “technology has to be a high priority. If you don’t have your arms around technology, you are putting your credit union at a disadvantage.”