The debate over the fate of small credit unions continued on CUinsight's blog last week with Henry Meier of the Credit Union Association of New York interjecting that "the days of treating your examiner as your de facto compliance officer are over." It's not that examiners want to put small credit unions out of business. The reality is that running a financial institution in the 21st century is more complex than in the past and the connectivity of the information age presents greater risks, such as leaked private account information, and that requires more regulatory oversight. Compliance is the cost of doing business and if you can't bear those costs, you won't be in business.

Credit union professionals are primarily numbers people so I'll lay it out for you that way. Your $10 million credit union's small staff responsible for complying with gazillions of regulations and anticipating a bazillion more while adding copious technological advances. Multiply that by exponentially growing member demands. Extrapolate that out to one very stressed CEO who's just five years or less from retirement, throw in a harried operations manager and find the cosine of three overworked and underpaid member service reps. I'm reaching for a salty margarita just thinking about it.

Gregg Stockdale, CEO of the $34 million 1st Valley Credit Union, wrote in reply to Meier, "We have seen an exodus of the entitlement crowd from our ranks, but that does not mean the end of small CUs." He is correct. Size is less important than will and know-how. Large credit unions have failed for lack of these characteristics, but many small credit unions thrive because of them.