Effort to Turn More Places Into 'Credit Union Towns' Pushes Forward

As I was preparing to head to the Northwest Credit Union Association’s MAXX Convention in Spokane, Wash., in mid-October, I noticed that the press releases sent by the league ahead of the event referred to Spokane as a “credit union town.” It reminded me of a conversation I had a while back with Editor-in-Chief Michael Ogden and Staff Reporter Peter Strozniak about potential story topics, one of which was, why are credit unions more popular in some regions than others?

Location-based trends take off for a variety of reasons – foods based on the highest-quality ingredients available in the area, music based on the cultures that made their mark on a region throughout its history, etc. – and you have to admit that in certain areas, such as the Pacific Northwest, the credit union energy just feels bigger. They’re places where professionals from local credit unions regularly collaborate with one another and make themselves visible in the community, and where more consumers are proud to be members, sometimes of multiple credit unions. But what’s the reason?

NWCUA President/CEO Troy Stang shed light on this issue – and several others – during a sit-down interview at MAXX: “There are certain areas of the U.S. where cooperative business ideas got nurtured very early on in our economy,” he said. “In areas like the upper Midwest and Pacific Northwest, people found ways to do business together cooperatively, whether that was cooperative communications – that refers to the birth of the old cooperative phone networks – electricity, grocery stores or credit unions. It was just a way of life.”

But that doesn’t mean credit unions are only working to acquire new business in “non-credit union towns.” Stang estimated that about 60% of people in the Northwest are credit union members, and the remaining 40% will be targeted through Open Your Eyes to a Credit Union – a national, CUNA-led campaign designed to dispel common consumer myths about credit unions and expected to launch in the Northwest in January 2020. So if all goes according to plan, consumers who are not yet CU members in the Northwest will begin seeing digital ads promoting the benefits of credit unions in just a few months. “We’re hoping that our messaging will get them to say, hmm, if I have a financial need I’m considering, why don’t I put credit unions in my consideration set?” Stang explained. “Now, people don’t wake up every day and say, I wonder want kind of financial institution I want to join today? It’s not until they have a need, like a loan. That’s what triggers the consideration, and we want to make sure Open Your Eyes hits at that point in time in that consumer’s mind.”

And it’s not just consumers who need to be convinced about the merits of credit unions – it’s also the elected officials, those who ultimately make decisions about how credit unions can operate and who they can serve. When asked about the NWCUA’s advocacy plans for 2020, Stang said they plan to not only present officials with economic impact reports, but for the first time ever, community impact reports, which will give credit unions the chance to assimilate the things they do in their community, like volunteering and making donations. He noted that sharing these reports will be especially important next year as 20% to 30% of elected officials in the region’s state legislatures are new. The league also plans to focus on its advocacy efforts in Idaho (which, by the way, sounds like it’s full of “credit union towns,” with 60% of the state’s consumer deposits in credit unions), where Gov. Brad Little will be appointing a new head of the Department of Finance.

Idaho is in fact a newcomer to the NWCUA – its state credit union league merged into the association on Dec. 31, 2018. With mergers continuing to take place among both individual credit unions and leagues, the trend is a common topic of discussion at CU Times. We’re always wondering, are more on the horizon? And will it one day get to a point where we have, say, four or five big, regional leagues?

While Stang did not say that any new mergers are on the NWCUA’s radar, he did discuss why the addition of Idaho to the league made sense and strengthened all three states’ cooperatives: “We wanted to create a stronger, more impactful, more influential voice for ourselves. Consumers are no longer confined to small geographic areas. And so being able to influence the policy environment in neighboring states became critically important. State lines no longer separate commerce, and they also don’t necessarily separate policy.”

Speaking of state lines, given that recreational marijuana is legal in Oregon and Washington, marijuana banking naturally made my list of interview topics. When we got to it, Stang made an interesting point, which might make credit unions that are adamantly against the idea uneasy – in those two states, all credit unions are going to touch the business whether they like it or not. “If I own a shed or storage unit and there’s a sublet in that shed, I can’t confidently say that some business wouldn’t be storing its equipment in there that might be used for a marijuana grow or production facility. And so if I were a credit union doing a real estate loan on a storage business, I can’t know what the contents are.” He went on to explain that along the western border of Idaho, a state where marijuana is illegal, complications arise when, for example, an electrician with a CU business account is hired to serve a marijuana business in Oregon or Washington.

For that reason, he said, it’s important to make elected officials aware that a safe harbor may be required by a large number of institutions. “This issue is so much bigger than just the credit unions that made the intentional choice to serve marijuana businesses.”

Now, in an awareness campaign like Open Your Eyes, it might not be a good idea to mention credit unions’ involvement with marijuana businesses. So what should the message be for the average consumer who is not yet a CU member?

Based on what I took away from MAXX, it should clearly state that not only do credit unions offer the best in banking technology, they’re also experts in something technology can’t do – making a human connection.

“Our advantage in this day and age of technology revolution, and all of its sexy, fancy stuff, is the ability to connect with the human being,” Stang said. “We can’t forget that, because that’s a space that we own today, and I believe that we can maintain that.”

Natasha Chilingerian is executive editor for CU Times. She can be reached at nchilingerian@cutimes.com.