The Right Credit Union Partnerships Help Elevate the Industry

Mergers have been a hot topic in the credit union industry for some time. Merger activity has unquestionably grown over the past year, and leaders predict this trend will only continue for the years ahead. Many are voicing concerns over consolidation, holding the view that mergers are a sign of deterioration of the industry.

We, however, have a very different perspective on the topic, and one we believe can help unite our industry over the benefits that strategic partnerships can foster.

Our organizations – Canvas Credit Union and Western Rockies Federal Credit Union – are celebrating the official launch of our partnership following the member approval at the end of the year. In the case of our partnership, our two organizations are significantly different in size and in markets, but while that is accurate, it only is one part of the story. The combination of a larger credit union merging with a smaller credit union tends to draw heavy criticism in the industry, with the smaller credit union viewed as a victim of consolidation that could have been avoided with stronger leadership or better business decisions.

We simply don’t agree. We see firsthand, day in and day out, how hard credit unions work to serve their members and communities. It is also undeniable that current market forces are often posing greater challenges for the industry’s smaller credit unions with fewer resources. We don’t think that size should be a barrier to credit unions having the opportunity to realize their dreams. The goal is for our family of credit unions to thrive, not just survive.

By sharing our experiences through this process and the lessons we’ve learned along the way, we hope that we can help serve as an example for our fellow industry leaders about the opportunity ahead.

We see three primary benefits to strategic partnerships:

• Expanding access to leading financial services. High overhead expenses – technology, compliance needs and innovation efforts in order to meet consumer expectations – are a costly reality of today’s credit union landscape. By uniting credit unions’ models, resources and talent, members can see greater value and gain access to the latest financial products and services.
• Amplifying and advancing credit union teams. Partnerships can provide enhanced opportunity for credit union team members to grow in their careers. It is rare to find credit union employees who aren’t dedicated to their members and passionate about cooperative finance – they chose this industry for a reason, after all. Strategic relationships can provide added training and development resources to help employees achieve their personal and professional goals, and even new market opportunities for team members to grow into. By investing in our talent, the industry as a whole will benefit.
• Bringing more support, value and community investment to local communities. Many smaller credit unions have been struggling – particularly over the past decade – to invest in their communities as deeply as they would like. Another advantage of aligning resources with credit unions that prioritize likeminded causes is the opportunity to invest back into their communities. By credit unions establishing themselves as leaders in the communities they serve, this brings opportunity to expand impact and better educate audiences about the credit union movement.

Of course, not every partnership is the right fit. We believe two factors must be at the core of the process: Cultural alignment and listening. Credit unions must have a strong marriage of cultures and shared values, so collectively they are working toward their common goals. At the end of the day, these relationships are built by human beings coming together because they want to enhance impact for their members, teams and communities.

Likewise, any merger strategy should begin with listening in order to create more value. Each market has its own distinct dynamics and culture. It is crucial to gather input directly from local community members and honor the talent of the credit union teams who know their members best. Only then will the partnership be able to deliver an enhanced and tailored experience to best fit each respective community’s needs. This is particularly critical for ensuring that smaller credit unions, and therefore members in what may be rural and less serviced markets, will receive the financial services and community leadership they need most.

We firmly believe that the right partnerships, when done with intention and care, can build stronger momentum behind the credit union movement. Strategic relationships can help to heighten each organization’s collective impact and create more value for members, teams and communities. Most importantly, these collaborations can be done with a transformational people-first approach.

A rising tide lifts all boats. Until credit unions have more than 10% of the market share, we are collaborators more than we are competitors. Aligning with and supporting credit unions with shared values and goals provides the opportunity to expand our impact. We want to be part of the change that helps raise up the industry as a whole. We want to continue growing the legacy upon which credit unions have been built. We want the industry to flourish.

The best is yet to come,

Kristi Porter, president/CEO, Western Rockies Federal Credit Union ($150 million, Grand Junction, Colo.)

Todd Marksberry, president/CEO, Canvas Credit Union ($3.47 billion, Lone Tree, Colo.)