The Untapped Potential of Credit Union Partnerships

The credit union industry was built on the foundation of cooperation, uniquely distinguishing itself in the financial services realm. Yet the potential for partnerships and alliances within the credit union space remains largely untapped. This limitation may stem from our internal focus on growing and improving our individual organizations. We tend to overlook the broader picture: That all credit unions desire to provide value to their members and are staffed by people who aspire to help members accomplish their financial goals. Likewise, we are all making strategic decisions to remain relevant to current and future members.

A consequence of staying within our comfort zones is that we inadvertently miss out on the chance to leverage scale and add resources for the betterment of those we serve. Collaboration between credit unions enables us to enhance our offerings to our members, foster more robust communities, and have more resources to serve both members and staff.

The credit union I have the privilege of leading, Solarity Credit Union, resulted from two credit unions that saw one another as equals (I was named CEO of Yakima Valley Credit Union in 2008, and in 2011, I oversaw our merger with Catholic Credit Union, which resulted in an entirely new brand – Solarity). We shared all the beliefs mentioned above, yet had drastically different internal cultures, a fact that was evident long before we started talking about coming together to become better. Nonetheless, we saw the opportunity to create a partnership for the good of all involved.

Forming one credit union out of two naturally presented its share of challenges. Combining our memberships, boards, employees, offices, etc. were decisions fraught with cultural, tactical and emotional hurdles. Yet, nothing worth doing is ever easy. We were propelled by a steadfast dedication to making the best decision possible for all stakeholders and we persisted. We ultimately established a stronger organization that is in a much better position today to serve our membership, talent and the community that relies on us.

How Credit Union CEOs Can Pursue and Build Partnerships

Individual credit unions reflect distinct values, knowledge and beliefs. Opportunities for CEOs to experience personal and professional growth come about when we engage with peers representing credit unions of various sizes, locations and mindsets. Exercising those opportunities, we open doors to creating relationships and, often, friendships. Making connections with individuals outside our immediate circle – including people who are different and/or have other challenges – expands us as leaders by encouraging us to consider fresh perspectives. Having the boldness to venture beyond our comfort zones forces us to confront long-held traditions and beliefs, and we become more courageous and impactful leaders as a result.

The importance of building a network of trusted peers cannot be overstated. It is my experience from attending several CEO-only dialogue sessions that CEOs grapple with setting aside their egos and having the vulnerability to engage in meaningful dialogues with one another. The trusting connections I have built over the years are invaluable in addressing challenges and gaining constructive insights into how other organizations operate so that I can better highlight what my credit union is doing well and where we have room to improve.

In Solarity’s case, the physical proximity of the two legacy credit unions meant that over the years, both organizations had worked together in various capacities, from sharing market intelligence to community service to joint training. However, the boards of directors of these two credit unions did not know each other. It took several years of work on the part of each CEO to help their boards see the value of a true merger-of-equals partnership. While physical location is one element, there are other potential reasons for credit unions to collaborate outside of geographic proximity. Like-minded leaders might present a compelling case for mergers outside of local markets. The Solarity board believes there is a strong strategic case for partnering with credit unions in different locations to gain access to new markets and new fields of membership.

Embracing the Challenge of Partnering

Creating scale and harnessing increased resources are fundamental to creating value in any business, including the ones that we run. In the case of credit unions, we are creating said value for the ultimate stakeholder – our members. By uniting and working together, credit unions can empower their organizations to serve local markets better, enabling our members to thrive within stronger, more resilient communities.

The establishment of successful alliances requires the deliberate building of trust. All credit unions are aligned culturally by doing our best to add value and enrich the lives of our members. What credit unions need most is an open, honest assessment of strategic priority alignment and any potential deal-breakers between CEOs and boards. Objective decision-making becomes crucial, prioritizing conversations grounded in reason rather than emotion. While passion and excitement are valuable, fear and insecurity are not.

When embarking on partnerships, it is paramount to prioritize the needs of our members above the preferences of individual leaders and – dare I say – boards. To do this, CEOs must have proactive, recurring and deep conversations with their boards. Over the last several years, I have had various facilitators with differing approaches speak in depth to the Solarity board to discover what they would like the result to be from a credit union partnership. The first misconception we had to address, frankly, was establishing the fact that we are truly seeking a partnership. We had to shift ourselves away from the “acquirer” mindset. In a “partnership” conversation with another CEO recently, the CEO told me about the “merger and acquisition committee” that their board had formed. When the time is right, the Solarity board will create a “partnership committee,” as will our partnering credit union. Words matter.

Through successful partnerships, credit unions can streamline compliance, explore avenues for adopting new technologies, achieve cost savings and implement innovative business practices that ultimately serve the membership. There is also enhanced convenience, pricing and resources for members. The power of collaboration enables us to offer a wider range of products and services tailored to meet the unique needs of our diverse membership base. Consequently, we can attract a broader membership base while further enriching our communities.

The Solarity Story

While discussing partnerships as a strategy for future growth during a recent day-long planning session with my executive team, one of my executives said, “A partnership opportunity occurs when two CEOs experience a friendly ‘simpatico,’ decide it’s a good idea and convince their boards.” Having been-there-done-that, I couldn’t agree more. In the case of the merger of equals that created Solarity, the other CEO and I could not have been more different from one another. He was far more experienced than I was as a CEO, and although he was older, he wasn’t necessarily at “retirement age.” I was young, eager to prove myself, and to that end, a bit impulsive. He might have easily (and clearly and obviously) decided that any merger partnership we might pursue would only occur if he were the successor CEO, but he did not think that way. He knew that coming together was the best thing either organization could do for the long-term sustainability of his legacy credit union. So, he humbled himself and stepped aside to let this less experienced CEO take the reins. With his support, we convinced his board that I was the right person to lead the new organization. It was a selfless decision to do the right thing for his members, his staff and the communities we serve. Fortunately for everyone, I’ve done a pretty OK job.

The journey toward successful partnerships can feel uncertain. Still, we must be willing to confront these trepidations and consider the benefits to our members, staff, organizations and communities. Only by doing so can we unlock the full potential of our credit unions and truly serve our members’ best interests. We can leverage our collective strengths through credit union partnerships to create more robust, relevant and value-added organizations.

Mina Worthington is president/CEO for the $858 million Solarity Credit Union in Yakima, Wash.