Newsflash-that strategy didn't work very well for small single location mom and pop retail businesses during the `70s and `80s era. Their larger corporate counterparts gave customers more locations to choose from, more product and service availability, and better pricing as a result of economies of scale. A case in point is Wal-Mart, the world's largest retailer. History confirms mom and pop businesses lingered for a while on life support, but found it increasingly difficult to sustain enough net profit to remain viable. Their larger counterparts' staying power eventually drove them out of business.

So, who is to blame for this false sense of security, our apprehension toward innovation, our lack of preparedness and our newfound distrust of each other? Is it credit union management? Elected officials? Trade organizations? Trusted advisors? Larger counterparts? Service providers? Regulators? It would be human (and very easy) to point fingers, but the truth of the matter is we all share blame in this regard.

Rhetoric aside, small and mid-sized credit unions simply don't have enough resources to remain relevant to their members' needs on a 21st century playing field. Alone, we are fighting a losing battle. The bench could be deep, but unfortunately many of the players choose to sit on the sidelines and play a different game we all know as "CYA."

So, it's the ninth inning, tie score, bases loaded, two outs. it's up to us! We swore a bond to serve not only our members' needs today, but for years to come. This sleeping sickness we are suffering from is a plague that threatens our sheer existence as an important segment of the financial world and as a political force to advocate for our members' financial well-being. It's time for small and mid-sized credit unions to quit the rhetoric, wake up, grab a bootstrap and all pull together. We must not walk in fear of each other, rather; we must unite, hold hands and share each other's strengths. The alternative is going out of business. Now someone tell me, how that is in the best interests of the members we serve?

By in large, asset-size does matter. Clearly, larger asset size credit unions have an advantage because they are able to operate at much lower overhead expense levels than their smaller asset-size counterparts. These economies of scale incrementally result in higher net earnings which is clearly where the "rubber meets the road." Without a doubt, a lot more can be done for members with $2 million in annual net earnings than with $200,000. More locations to choose from, more product and service availability and better pricing come to mind. Real member values!

So then, is it possible for 10, $25 million credit unions to combine, creating asset size of $250 million, operate at much lower overhead expense, generate higher net earnings, have 10 times the locations for members to choose from, offer more product and service availability and better pricing? Theoretically the answer is YES! In fact the Michigan state act allows credit unions to combine and even keep their identities intact by operating using assumed names. This sounds like a reasonable alternative you say, and it is. However, preserving leadership roles and structuring a suitable governance model often becomes a tug of war in which member value and benefit ends up being secondary. Building a new business model to take our credit unions to the next level requires everyone to step outside their safe zone. Everyone involved must be prepared to exchange some degree of autonomy and control in order to participate and create a model that will exceed member demands for today and tomorrow.

Today supply far exceeds the marketplace demand for financial services. Unlocking our doors, turning on the lights and waiting for members to arrive and take advantage of the commodities we offer will no longer keep us solvent. Members have far too many choices conveniently accessible and often perceive the credit union brand to be limited or narrow in scope. Credit unions, large and small, must overcome these limitations and perceptions through solidarity, aggregation of assets and by collaborating together. We must not walk in fear of one another.

Yes, we have challenges to overcome. To survive, we must be skillful and we must also be willing to invest in ourselves. CUSOs provide an organizational structure for credit unions, regardless of asset-size, to collaborate together and put skillful design efforts into practice. These CUSOs may also oftentimes provide new ROI revenues.

So why aren't more credit unions taking advantage of CUSO ownership? One possibility is that many CUSOs are single purpose in design created to address a specific need of the owners, such as data processing or mortgage processing and servicing. Some require too large a capital investment for a small or mid-sized credit union to make. On the other hand, multi-purpose CUSOs usually have lower capital investment requirements and return real value to the owners.

However, most CEOs of credit unions less than $100 million are busy running their credit unions and devote little, if any, time thinking about how to build their business. There is a difference. Fortunately, more multi-purpose CUSOs are stepping up to the plate to help meet the needs of small and mid-sized credit unions.

In closing, I can only hope to have rung a wake up bell and left you with some things to consider. As smaller-asset credit unions we do have choices, if we're willing to make them. These choices will determine our destiny. So, Good Morning and Good Luck!