As CUNA board chair, Smith had appointed a Diversity and Inclusion Ad Hoc Working Group and tasked its members with looking at the issue. In February, he wrote that their findings and his 40 years in the credit union movement told him the time had come to "officially recognize diversity and inclusion as part of the credit union philosophy."

"As an African American, I am proud to be part of a movement that improves the lives of individuals and our communities," he wrote in a column in CU Times. "Credit unions were established to serve specific – typically underserved – communities, making a place for those who had none. And today, our mission continues to be to provide opportunity and access for all."

CUNA President/CEO Jim Nussle told attendees of the African American Credit Union Coalition conference in Charlotte, N.C., in August that he would be bringing the eighth principle to the CUNA board.

The cooperative principles grew from a food co-op formed in 1844 in Rochdale, England, with 28 people pooling one pound each, or the equivalent of $4,100 in current dollars.

The first two principles, voluntary and open membership, and democratic member control, aren't explicit enough to incorporate diversity, equity and inclusion, Nussle said.

"There will be some who will say, 'It's in there already.' I don't think it is," Nussle said. "I don't think in 1844 they were quite thinking about diversity, they certainly weren't thinking about equity and they had no idea about inclusion. It's something that credit unions do naturally, but it should be put first and forthright in the principles we stand for."

Four years ago, CUNA Mutual formed a multicultural center of expertise to understand diversity among credit union members, and how credit unions can respond to those differences to provide better products and services.

CUNA Mutual has used research as one way to find answers, with key findings published in its "What Matters Now" series. Two recent reports showed how important minorities are for credit unions.

The "Insights From the Non-Member and Driving Credit Union Engagement" report from 2017 showed that minorities and young people were the biggest untapped populations for credit union membership. Its 2018 study explored ways minorities differed in their preferences for borrowing and other financial services.

The main focus of the multicultural center is on finding ways for CUNA Mutual to improve service to its members, Eric Hansing, vice president for multicultural and corporate strategy, said.

Another part of the effort is a team dedicated to building a more diverse, equitable and inclusive workforce at CUNA Mutual. That team is led by Angela Russell, director of diversity and inclusion.

"We work to build a diverse, equitable workforce that is equipped to understand the diverse marketplace," Hansing said. "The skills in a DEI team can often be very different than the skills in a marketing and research function."

A first step for any credit union seeking to improve its diversity is to understand how its membership and workforce compares with the community it serves. For CUNA Mutual, Hansing said its goal for workforce composition is to mirror the communities it's trying to serve. "Better yet, it should look like the future community we're trying to serve."

And the future community is one that will include more minorities. Almost all growth in the U.S. population is coming from Hispanics, blacks, Asians and other minorities. The Census Bureau forecasts that non-Hispanic whites will be a minority of those ages 18 to 28 by 2028, and a minority of the total U.S. population by 2045.

"If we want to be more relevant to the communities we're trying to serve, then focusing on becoming more diverse in our workforces really does matter," Hansing said.

Credit union membership generally mirrors the overall population of the United States. The exception is Hispanics, who represent about 18% of the U.S. population and about 10% of credit union members.

"There's a bigger gap there than we see with any of the other racial and ethnic groups," Hansing said. "That's one place credit unions appear to be behind in terms of representing the overall community."

While the overall movement is fairly diverse, the extent of the diversity has a wide range. "Some credit unions are doing a good job of reaching diverse communities within their local populations," Hansing said. "Other credit unions could do a better job."

CUNA Mutual often provides aggregated data about the racial and ethnic makeup of credit unions. It's something that credit unions have to be careful with for the obvious reason that they want to avoid breaking the law or even creating the appearance of using the data to discriminate.

CUNA Mutual does direct marketing on behalf of 4,000 credit unions. The credit unions provide basic information about its members, and CUNA Mutual buys third-party data that can reliably predict a person's race, ethnicity and other traits.

The data can inform credit unions how to best shape and present products and services to meet the needs of different communities. "We see dramatic differences by race and ethnicity," Hansing said.

For example, in its 2018 report it found:

• African Americans were twice as likely to take out student loans, public or private, than non-Hispanic whites.
• Minorities are more likely to place a higher priority on having loans funded quickly.
• Hispanics are twice as likely to say convenience and flexibility in financial services is more important even if they have to pay higher rates or fees.

Data can show what's happening with consumer behavior, but without a diverse workforce the chances rise of misinterpreting why those behaviors are occurring. And if the reason is askew, the response is likely to be flat-footed too.

"It's also why we need to have more diverse and inclusive workforces. Because if we don't, we misinterpret even the data," Hansing said. "We really need a lot of different voices."