Most of us know the analogy of the frog in the warming water. As the water warms gradually, the frog becomes more uncomfortable but continues to survive and stay in the water, until one day the water reaches a boil and the frog dies. The trends were clear – the frog should have known that the heat would eventually be deadly – but it remained in the water, willfully ignorant of the adverse trends, or aware of the trends but delaying the decision to act. Many credit unions are thinking like that frog.

I began my journey with credit unions in the mid-1980s. Car loans were king in the credit union world. Car loan rates in the 1980s were between 10% and 16%. At those rates, credit unions lived very comfortably on the net interest margin. Operational costs were covered and there was enough left over to add to capital.