November 19, 2025 • 44 mins
Go back to when I started to report on credit unions and there were over 8000 credit unions. Now there are 4370.
In 2020 there were 5099 credit unions. Just in five years the count is down by 700+.
The math going forward is gloomy.
That’s why I smiled when I saw Jason Stverak’s CU Insight piece on Why small credit unions matter and how we can help them thrive.
Jason is chief advocacy officer at DCUC, the Defense Credit Union Council and is a past podcast guest.
Why is he advocating for keeping little credit unions alive?
I had to get him on the show - this episode was recorded on November 12, just hours before the federal government reopened after the longest shutdown in history.
We start by talking about what’s going on in Washington DC now - and quickly move into why DCUC has become an aggressive lobbyist and then we focus on why small credit unions matter and why DCUC cares.
It’s good stuff.
Listen up.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (00:00):
Welcome to the CU2.0 podcast.
SPEAKER_00 (00:05):
Hi, and welcome to the CU 2.0 podcast with big new
ideas about credit unions andconversations about innovative
technology with credit union andfintech leaders.
This podcast is brought to youby Quillo, the real-time loan
syndication network for creditunions, and by your host,
long-time credit union andfinancial technology journalist
(00:27):
Robert McGarvey.
And now the CU 2.0 podcast withRobert McGarvey.
SPEAKER_01 (00:35):
Go back when I started to report on credit
unions and there were over 8,000of them in the United States.
Now there are 4,370.
Just in 2020, there were 5,099credit unions.
In five years, the count is downby 700 plus.
The math is going forward toextinction.
(00:59):
That's why I smiled when I sawJason Stark's CU insight piece
on why small credit unionsmatter and how we can help them
thrive.
Jason is Chief Advocacy Officerat DCUC, the Defense Credit
Union Counsel, and is a pastpodcast guest.
There's a link to that show inthe show notes.
So why is he advocating forhelping little credit unions
(01:23):
stay alive?
I had to get him on the show.
This episode was recorded onNovember 12, just hours before
the federal government reopened,after the longest shutdown in
history.
We start by talking about what'sgoing on in Washington, D.C.
now, and quickly move into whyDCUC has become an aggressive
(01:43):
lobbyist, and then we focus onwhy small credit unions matter,
why DCUC cares, and what thecredit union movement can do to
help more small credit unionsstay alive and thrive.
It's all good stuff.
Listen up.
How are you?
What are you doing?
SPEAKER_02 (02:04):
Just waiting for the government to reopen.
So uh, you know, we'll take thatvote at 8 p.m.
tonight, and then we can getback to uh, you know, the normal
work of fighting for creditunions.
SPEAKER_01 (02:14):
So what have you been doing for the last 40 some
odd days?
I'm not your boss.
I'm not gonna dock your pay oranything.
Just curious.
SPEAKER_02 (02:26):
No, I mean, uh a lot of it is is you know, our
megaphone or our communicationchannels uh kind of ramped up in
terms of getting almost daily orhourly asks from both Democrats
and Republicans, like, what areyou guys doing to help people?
You know, what are the programsthat you have going on?
(02:47):
How can I help, or how can I beinformed?
And making sure that what ourcredit unions did from day one,
their members of Congress knew,and they could also help share
that information, but also thatwe could help promote, you know,
obviously what's going on.
Now, the regulatory side didn'tstop.
They kept sending out letters,asking for new things, uh, that
(03:09):
kept moving forward.
But um, you know, the work onthe NDAA was still going on
behind the scenes by staff.
So it's not as if our workstopped, it's just that there
just weren't as many committeehearings going on.
SPEAKER_01 (03:26):
Now, what's going on at NCUA?
SPEAKER_02 (03:30):
You're in terms of anything, everything.
SPEAKER_01 (03:34):
I mean, uh, is there any probability that they'll
increase the number of uh boardmembers or actually add some?
SPEAKER_02 (03:42):
Oh, I mean, you know, statutorily, no.
Um, but will the administrationstart filling out the rest of
them?
I think that I think they're ina holding pattern.
I think pretty much everybody isuntil you know the the the
Supremes rule uh on the courtcase.
Uh not this one, but dealingwith the presidential powers uh
(04:04):
and you know removing ofindependent, you know,
independent directors.
I think once that happens, Ithink you'll have either a green
light or a uh red light uh interms of how uh in terms having
the administration announcetheir nominees.
SPEAKER_01 (04:22):
I I know they're out, I know they're out vetting
people, so now I hear things areproceeding much more slowly
internally at NCOA due to thestaff reduction.
Have you heard similar?
SPEAKER_02 (04:37):
Uh I haven't, you know, I was just testifying over
in front of the board at thebudget hearing, and obviously
you have uh, you know, you're alittle 920, 930 employees.
Uh I mean that's a that is uh a23% reduction.
Uh you still have a few of thosethat are gonna come off because
some took buyouts and they'reworking until uh December 31st.
(05:02):
Um, I have not heard anycomplaints uh along those lines.
Uh, you know, I'm I I think thatwhat you're gonna see with the
reduction in staff is thatyou're gonna see, you know, as
they've talked about, expandedtime between exams, you know, uh
those types of things, but Ihave not heard of a work
(05:23):
slowdown or any complaints aboutthat.
SPEAKER_01 (05:27):
Has DCUC taken a position vis-a-vis that extended
time between exams probability?
SPEAKER_02 (05:37):
Our position that we expressed in uh during the
budget hearing was that if if ifthey have a reduction in
resources, both either staff oruh you know financial, then use
those resources where they makethe most impact.
For a well-run Camel 1 or 2credit union, then maybe you
(05:58):
don't need to have the most, youcan you can extend that exam
period out.
But for ones that need moreoversight, that's where you
should focus your resources.
So that's kind of the positionthat we've taken uh uh on the
issue is that you know, dedicateyour resources where they are
needed most, uh, and that uh asyou are requesting information
(06:19):
from credit unions, not justblindly go down a checklist and
say, okay, I need this document.
Okay, why do you need thisdocument from this credit union
so that it saves time on bothends uh in justifying the
request of information and thework that a credit union has to
do uh to comply?
SPEAKER_01 (06:40):
Yeah, and I do do I think Navy Federal, which I know
is no longer a DCUC member orunless it's rejoined.
SPEAKER_02 (06:47):
Nope.
SPEAKER_01 (06:48):
Um I do I think they need to uh uh an exam once a
year.
I don't think so.
SPEAKER_02 (06:54):
Not no, I I I don't.
I I think that you know, ifthere are you know a systemic
problems, that's where you putthose resources.
But if you have awell-capitalized, well-run
credit union, whatever its size,then you can say, hey, you know,
let's do four in, you know,instead of uh, you know, every
(07:17):
two, you know, justify the theneed for a shortened period of
time between exams.
Because, you know, sometimes youget it so like you're going off
one exam and going on toanother.
So um, you know, we need to makesure that we are removing as
(07:39):
many administrative hurdles thatcredit unions have that prevent
them from fulfilling their dailymission of opening the doors at
each of their branches and beingthere to serve their members and
their communities.
SPEAKER_01 (07:55):
Um DCUC has been, to my eyes, increasing its lobbying
team, not necessarily withemployees, but with consultants,
et cetera.
Uh pretty aggressively.
Why?
SPEAKER_02 (08:09):
Uh you know, uh it to respond to the needs of our
members.
You know, we have grown uh ourmembership since March by about
35 to you know, almost 40percent.
And you know, we're we you knowwe're announcing almost a new
member a week, uh, and and we'revery proud of that record.
So that to ensure that we areable, you know, to adequately
(08:32):
represent their needs and uh youknow, get the changes that that
that will benefit them and theirability to serve their members,
uh, then we've kind of adopted,we call it kind of a Green Beret
advocacy uh that as issues areout there, we'll staff up,
we'll, you know, uh and staffdown uh as much as as much as
(08:55):
needed.
But you have to remember, mostof this year we've been, you
know, helping lead the movementuh on the tax issue.
Um, you know, that was fromJanuary on uh when the memo was
leaked uh to you know uh to thepress about you know the 55-page
memo of how do we payessentially what are the what
(09:15):
are the pay fors for the bigbeautiful bill?
And right there listed is thecredit union tax status.
Um, you know, we're we're notgonna spare an expense to ensure
that credit union interests areprotected.
And I think that we've done anincredible job at that, which is
proven by you know the fact thatmore and more credit unions are
(09:38):
coming to DCUC and asking tojoin.
SPEAKER_01 (09:42):
Now DCUC membership.
I I saw just just this week, Ithink Desert Financial and I
live I live in Phoenix andthey're they're they're a big
dog here.
SPEAKER_02 (09:55):
Yeah, 9 billion.
SPEAKER_01 (10:00):
I mean, historically.
Yeah.
Uh so what's the criteria?
What and also uh of a guy I likevery much, Peter Rice and
Hanscom.
SPEAKER_02 (10:09):
Yep.
SPEAKER_01 (10:09):
Now that's that's a classic military credit union.
SPEAKER_02 (10:12):
It is, and you know, you have to, you know, we we
are, you know, um evolving uh asthe movement has changed, but
also as how our credit unionsserve their communities.
Every credit union in theirfield of membership has a
veteran or somebody who knows aveteran or or somebody who has
(10:34):
served or is serving, you know,in the United States military.
So everybody, every credit unioncan be a member of DCUC.
You know, we use the motto of,you know, we're we're built for
defense, but we're open for all.
Because the issues that impactcredit unions, you know, the tax
(10:55):
issue impacts Penn Fed, RandolphBrooks, you know, Hanscom, as
you mentioned, as well as itrepresents schools choice and
uh, you know, Black HillsFederal Credit Union in South
Dakota.
So uh the need uh for DCUC toexpand to make sure that we are
(11:17):
not only representing the viewsof the traditional on-base only
credit unions, we represent theentire credit union movement and
every credit union that wants tojoin.
SPEAKER_01 (11:32):
And as you Sam, unless there's a credit union
I'm not aware of for hardcorepacifists who are
multi-generational pacifists, Idon't think there's any credit
union that doesn't have somemilitary connection in its
membership.
SPEAKER_02 (11:48):
Yeah, and that's great.
And honestly, if there was onemore power to them, that's
great.
That's what the you know, thecooperative method is.
It's kind of like you've gotcredit unions that are on, you
know, at coal companies.
We have credit unions that areonly do green lending or only
for environmentalists.
So I think that power of thecooperative, the power of the
cooperative model in terms of,you know, putting your money,
(12:12):
you know, where you want it togo is incredibly powerful and
it's in in the power of thecredit union movement.
SPEAKER_01 (12:19):
Now let's shift gears to why I reached out to
you, which was that CU Insightpiece where you put forth the
proposition that essentiallyit's in the interest of all
credit unions to keep smallcredit unions alive.
SPEAKER_02 (12:35):
Absolutely.
SPEAKER_01 (12:36):
And I first heard that proposition from Jim
Blaine, who at the time was CEOof State Employees, credit
union, the second biggest creditunion in the country.
And I said something to Jim,like, you know, why are all
these credit unions walking thehill with their tea tiny things?
And he said, You don't get it,man.
In a lot of a lot oflegislators' offices, I'm
(12:58):
representing a big bank.
These are representing thepeople.
Uh now, Jim was alsounderstanding his influence, at
least on North Carolinapoliticians.
SPEAKER_02 (13:08):
Right.
SPEAKER_01 (13:09):
But uh but he was sincere in saying we need those
the voices of the small creditunions to have more credibility
in Washington, D.C.
in particular.
Now, so then preparing for this,I looked in 2019, there were
5,236 federally insured creditunions.
SPEAKER_02 (13:30):
Right.
SPEAKER_01 (13:30):
Uh in Jul June, July of this year, there were 4,370.
unknown (13:38):
Yep.
SPEAKER_01 (13:38):
That's that's down, I don't know, 800, something
like that.
Yep.
And there's roughly 100 creditunions that aren't federally
insured, but it doesn't reallyaffect the numbers.
When I started writing aboutcredit unions many years ago,
there were over 8,000 creditunions.
So we're approaching about a 50%reduction.
(14:04):
And at this rate, I I'm notgonna do the math about when we
reach just one, just NavyFederal.
Schools first probably wouldclaim they'd be alive too.
Okay.
There'll be a couple.
SPEAKER_02 (14:16):
Yeah, I think Bill Bill would make sure they are.
SPEAKER_01 (14:18):
So yeah.
So it's we're but the the thetrend line is obvious and
serious, a big deal.
So then what?
What can happen to keep thesesmall credit unions alive?
SPEAKER_02 (14:35):
I think there's a myriad of options.
I think that you know, uhsupport from within industry.
I think in my article I'vetalked about or I've talked
about publicly, you know, uhkind of an obligation for large
credit unions to to assistsmaller credit unions.
You know, one of the issues forsmaller credit unions is
(14:57):
economies of scale and beingable to uh uh, you know, handle
processes or advice or help, um,you know, moving forward, if
there is an ability for a largercredit union to provide training
or resources for small creditunions, I think that improves
the overall health of the entiremovement.
(15:22):
Because I think, you know, youmentioned Mr.
Blaine's comments, and I used towork up on Capitol Hill, and to
an extent he is right that whenyou have a you know a Navy
walk-in or a, you know, uh or alarge credit union for that
area, in in a lot of electedofficials' minds and others,
(15:43):
they see asset size and they'rethinking, oh, you're too big to
care about the little people.
Um, and our ability to ensurethat within our DNA, whether
you're Navy size or tri-citysize in Washington state, you
are working to serve yourcommunities.
But it is incredibly helpful.
(16:04):
I can talk to you on theadvocacy side and the political
side to be able to walk in andsay, here's a$50 million credit
union serve in this community,and here's a CEO that is the
fill-in teller on Mondaysbecause they don't have enough
staff.
You know, that's incredibly,incredibly uh important if we
(16:24):
want to ensure that there aremembers of Congress and their
staff that want to or will helpuh and help advance the credit
union proposals that are thatthat are in front of them.
Now, you know, uh, every youknow, the definition of what a
(16:45):
small credit union is is alwayskind of a floating one.
You have the 500 million forcomplex, you know, complex or
not.
Um, you've got the numbers of100 million, you know, it's an
exact definition of the NCUA.
Um, and you know, uh, I youknow, you have$500 million
credit unions call them small,you have$40 billion credit
(17:07):
unions refer to themselves assmall.
And I hope that every creditunion, regardless of size, try
it wants to kind of have thatmoniker of a small credit union
because of what it represents.
It represents, you know, thattie to community that they know
your name when you walk in thedoor.
They uh, you know, they've gotthat cup of coffee with the loan
(17:29):
officer, and they're talkingabout the local high school
football game that you know theprevious Friday, and what you
know, the loan that you need.
So there's that discussion ofsmall credit union as a thought
or a uh you know uh of how youshould act.
(17:51):
But it is it is it that you knowit it is a challenging to say
the least ex uh you know,process for her to walk in and
say, here's a 10 billion, here'sa 9 billion, here's a 20
billion, and they're you know,they're looking at you and say,
(18:11):
okay, where's the 50, where'sthe 100 million dollars?
Because you need all of them inthe circle of the uh of the
movement, healthy and happy andsuccessful, so that the movement
and the credit union industrywill be here five years from now
or 10 years from now.
(18:32):
And, you know, there's gonna becontinued consolidation, whether
it is changing demographics inrural America where I'm from,
you know, changing technology,et cetera.
But we need to work as anindustry to put in place support
from credit union to creditunion and also regulations and
(18:53):
rules in place or repeal some ofthem, so that credit unions do
not need to merge based upon thecost of filling out paperwork.
That that that it should be acommunity-based decision, not a
do we have the resources to makesure we're filling out every
SARS report, you know, thatnobody in Washington, D.C.
(19:14):
ever reads.
And sorry, for a kind of alonger answer on that one.
SPEAKER_01 (19:19):
Oh, I I agree.
And go back to state employees.
When Latino Credit Union wasfounded in North Carolina, for
many years, maybe still today, Idon't know, uh, state employees
did their core processing free,I think free of charge.
I'm not 100% sure about that,but I know Jim Blaine wasn't
(19:39):
making any money on thatprocessing.
SPEAKER_02 (19:42):
So I think that if if you can find more examples of
that across the country, youknow, I think that's you know,
important because if we are notmaking it attractive as a viable
prospect in a community to starta credit union, then we're not
(20:03):
gonna have new credit unionsstart and we're not gonna have
credit union stainlesscommunities.
I come from, you know, theDakotas, you know, where uh you
know uh uh most reserve NativeAmerican reservations have no
financial institutions, uh, youknow, branches on their area,
uh, you know, uh on thereservation.
(20:24):
And that that that's that'sinexcusable in in terms of the
ability to serve and you know anunderserved population.
So, you know, what can we do asan industry to make it, I'm not
even saying profitable, I'msaying making it um having the
ability to start and grow andmaintain credit unions in towns
(20:51):
of 5,000 to you know uhcommunities inside of New York
City that want to start one.
SPEAKER_01 (21:00):
Well, I I don't think running Latino credit
unions numbers cost stateemployees anything.
I think they had excess capacityin their system, which I have in
my house, not enough to run acredit union, but it's not
unusual to have excess capacityand you say, hey, well, you
know, we can help you out hereand we'll down the line, we'll
(21:21):
figure out if you need to getyour own stuff.
And but for now, sure, we canget you going.
SPEAKER_02 (21:25):
Well, and I would hope that more credit union CEOs
and boards would say, okay, whatcan we do to help?
And not see, you know, if you'rea$185 billion credit union, I
think you should not beconcerned of a$35 million credit
union and helping them.
That you're not going to losemarket share if you help them
(21:48):
with some of their back officestuff or provide strategic
advice, or as you're doingemployee trainings, invite their
employees to come over.
So that's not an expense thatthey have to have on uh on their
books.
So I think that, you know, byfully embracing the principles
that we have as an industry, Ithink it will be helpful uh to
(22:13):
the stability, survivability,growth of our smaller credit
unions all across the nation.
SPEAKER_01 (22:23):
Well, and another way to look at it is some years
ago, I added up the assets ofall the credit unions, and all
of them together, including NavyFederal, had less assets, fewer
assets than JP Morgan Chase.
And then a few years after that,I looked at it again, and Chase
had increased the margin a lot.
(22:45):
It's uh it was fairly close thefirst time I did the numbers.
And a few years later, I waslike, wow, there's a big gap
open that opened up here.
And uh so all these guys arekind of small.
And as I say to credit unions,you know, I don't personally
know Jamie Dimon, the CEO of JPMorgan, but I'd bet any amount
of money, he does not wake up inthe morning saying, What the
hell did Navy Federal doyesterday?
(23:08):
He might say, What did Citicorpdo yesterday?
Uh, or what did Deutsche Bank doyesterday?
But no, he just and I and I'msure he wishes the best to Navy
Federal as far as he does.
SPEAKER_02 (23:21):
Yeah, and I I was I was blessed up on Capitol Hill,
you know, working for uh SenatorKevin Kramer is on still is on
the Senate Banking Committee.
And I would be in the meetingswith you know uh Moynihan from
Bank of America and Wells Fargoand City and Jamie actually uh
from Chase.
(23:41):
And yeah, the you know, thewe're fearful of credit unions
was never mentioned in any ofthose meetings.
It was more, yeah.
I mean, their their peers are,you know, you know, our are Bank
of America or HSBC or you know,credit suisse, you know, those
are the those are the onesthey're taking over.
But none of those institutions Imean I I just named care about a
(24:06):
timber community in northernIdaho of 10,000 people because
it it it's it's a blip on theirbooks.
The in those communities, it'sthe community to financial
institutions, and I will give ashout out to community banks
that have dug in and are helpingcommunities, small communities
across this country.
(24:26):
Um, and they're facing the samepressures that small credit
unions are in terms ofconsolidation, et cetera.
So, you know, I think that youknow, as as it relates
specifically to credit unions,uh we as an industry need to
lead to ensure the survivabilityso that we are not Australia or
(24:50):
Canada, where 10 or 15 yearsfrom now we have three because
you know that then then the, Imean, how how do you serve your
community then?
How do you serve your field ofmembership when the entire
country is your field ofmembership?
SPEAKER_01 (25:08):
Yeah.
And I I I think if every if ifevery credit union of any size
decided to do something to helpsmall credit unions in their
community, right there it wouldmake a difference.
SPEAKER_02 (25:22):
Yeah.
And the numbers are still there.
I mean, Chase Bank on its ownhas more assets, the entire
credit union industry.
A lot more a lot more.
And if you know, let's just sayNavy Federal made the choice and
they became a bank.
They are on the smallest tosmall size of a regional bank.
(25:45):
And so you need to put things inperspective in terms of size,
you know.
And this is kind of one of thosethat I'm gonna pull an analogy
from Benjamin Franklin that it'sthe time for all of us to hang
together, or we're certainly allgonna hang separately.
And by that, I'm talking abouteverybody coming together and
(26:07):
saying, what can I do to help?
Hey, I mean, I, you know, uh, ifif if if I have it correctly, I
think, you know, uh in the stateof Minnesota, they helped start
uh a fully African-American uhcredit union, and they had
investments or deposits comingfrom other credit unions if you
(26:28):
know, to help support.
So those little things arehappening generically, not you
know, organically across thecountry.
I think it just needs to be,when it happens, praised and
celebrated.
And also kind of that challengefrom CEO to CEO to help each
(26:49):
other out.
Because, you know, you go to myhome states of the uh of the
Dakotas, you know, the largestcredit unions are one in two
billion.
So it's not like you're youknow, you're at the school
choice size or Randolph Brookssize or Penn Fed size.
So, but in that community, theyare they're the Navy Federal of
North Dakota.
That that type of discussion.
(27:09):
So what can they help do toensure that you know qua you
know, that a you know, that a 50or a 10 or a hundred million
dollar credit union can help itcan survive?
SPEAKER_01 (27:23):
Well, one of the principal reasons a credit union
merges is a long-serving CEOretires and no one wants the
job.
SPEAKER_02 (27:33):
Yep.
SPEAKER_01 (27:34):
Uh and the board, and I'm not faulting them for
this, after trying and trying,they said we just got to merge
out of existence.
We got to.
But years ago, if you needed aCEO, you could call Jim Blaine
and explain your situation, andhe might have an employee he
would give you, assuming theemployee was interested in it.
(27:56):
It's uh I mean he created a lotof CEOs, I mean, dozens and
dozens.
Um and uh, you know, it waspeople who wanted to run their
own shops, they were never gonnarise to the very top with state
employees.
But hey, you know, I got thislittle$50 million thing over
here.
SPEAKER_02 (28:13):
No, and we what you're explaining to me is kind
of the you know, you know, thecoaching tree that you have in
in football.
Who comes off the Bill Walshscheme?
You know, who comes off the BillParcells?
Because, you know, uh to useyour you know example from from
Mr.
Blaine, it's like, hey, I gotsomebody who's talented, but
(28:36):
they're not gonna run a 50billion, a$50 billion, you know,
or a$10 billion uh credit union.
They need they need CEO or CC-suite experience.
Why not say, hey, you know what?
You know, help help that smallcredit union get a good CEO
where you're investing, and andand I'm just throwing things out
(28:56):
here.
Maybe you know, uh you help withbenefits or you give a grant or
something like that, where theyget a high-quality CEO who
learns, and then you have builtup a relationship between those
two credit unions, but then alsoyou're helping homegrown credit
union talent see that, hey, Ihave a future as a credit union
(29:21):
leader in this country in thiscountry.
And I know those are radicalideas to sometimes to do, but
credit unions are kind of theoriginal financial, you know,
radical changes, you know.
You think of it also as like thefarm team, you know, in in
baseball.
Like, you know, what are youdoing to help, you know, get
(29:44):
your hitter from A to A to AAAto you know, playing in the
majors and that type of thing?
What are we as a movement?
And while we are separate, weare all together in the
movement.
What are we doing to help growour own?
SPEAKER_01 (30:02):
And credit unions still will tell you in many
cases that they don't competewith other credit unions, which
is not true, but they they willtell you that.
And they wish it were true inmany cases.
Right.
It's uh then again, many yearsago, I asked the then CEO of
Navy Federal uh if he competedwith Penn Fed, and there was a
long pause, and he said, no,USAA.
(30:23):
It's uh it's uh which was aboutthe same size as as Navy.
They were really they they bothhad about the same playing
weight.
SPEAKER_02 (30:32):
So exactly.
And you know, uh everybody'sthat kind of that way.
You know, you do compete, youwant to be the biggest, the
best, you know, the you know,having the largest membership,
all that type of stuff, but youknow, that that's that's kind of
capitalism in the American way,and that's not something we need
to be ashamed about uh ofwanting to be better or the
(30:53):
best.
But we also can we also need tounderstand that we embrace our
we we embrace the the financialcommunity in a little bit
different way than our ourfriends, the banks, that we want
to grow others at the same time.
It's not us and nobody else.
It's okay, how how can we as amovement continue to you know
(31:15):
continue to grow?
And you know, we we've talkedabout what individual credit
unions can do, but thechallenges facing small credit
unions and the movement overallis, you know, sometimes mergers
happen because you butt it up,you're you're up against the cap
on what you realistically canget under your field of
membership.
You know, what are we doing tohelp expand credit unions'
(31:37):
ability to go get new members orto people knocking on the door
saying, I want to be a member?
Oh no, you don't live on theright street, or you're not at
the right company, or you're notin the right county, you know.
What are we doing at the stateand federal level to fight for?
And the banks, you know, aregonna, you know, go tooth and
(31:57):
nail.
But what are we doing to expandthat?
Changing the discussion fromwhat is the bank getting what
the credit union bit to credit.
What are we doing to ensure thatthe community and the individual
in the community has the largestpossible choice of financial
(32:18):
institutions to serve theirneeds?
SPEAKER_01 (32:21):
Interesting.
Many credit unions, including umnot Navy, but many of the
military themed credit unionshave a backdoor to entry.
And the credit union Iprincipally use, I joined, I the
CEO asked why I wasn't a member.
I I lived in his state, I knewthe guy.
(32:42):
I said, I you know, I not youknow I don't have any
relationship to the things.
And he said, Hey man, just give10 bucks to this charity and you
can become a member.
And I said, Wow, really?
And yeah, really, and I've beena member of them for many years
now.
Uh and other instant moreinstitutions can use that
technique.
(33:03):
Yeah.
SPEAKER_02 (33:04):
No, I agree 100%.
And we in credit unions have hadto be creative to get around
these artificial fences thathave been placed around their
ability to serve the largestpopulation.
And wouldn't it be great ifanybody who walks in your door
in your community, if you haveyour charter set in the right
(33:26):
way, could just join?
That that's it.
I like the fact that you sponsorthe local softball team.
I want to be a member.
I like the fact that you have adebit card that will allow me to
donate directly to the museumfor every purchase I make.
Nobody else in this town doesit.
That'd be fantastic.
(33:48):
And that's just kind of uh moreof an example of credit unions
and credit union, moreimportantly, trade associations,
getting in and saying, what canwe do to remove all the barriers
to credit union?
And I'm not saying unbridledgrowth, but credit unions,
(34:11):
communities that they servehaving the ability to say, I
want to be a member of my creditunion, and not have government
tell you, hey, you don't live inthe right spot, you can't join.
So, you know, I know that thatthat doesn't happen overnight
and you you can't snap yourfingers, but you know, to kind
(34:34):
of paraphrase John F.
Kennedy's speech at RiceUniversity about, you know, why
does Rice play Texas?
They do it because it is hard.
And why are we going to themoon?
Because you know, because it ishard.
And those are the types ofchallenges that we need to
aspire to as associations andmovement to accomplish and not
(34:54):
just be happy with, you know,the nibbles around the corner.
We need to be big, we need to bebold in terms of the issues that
we are going to fight for.
Otherwise, 10, 15, 20 years downthe road, credit unions are
going to be facing the samequestions about growth.
And maybe we're down to 2,000credit unions then, because we
(35:18):
didn't dig in now to provide theavenues.
And I'm not saying everythingwill work, but we to give every
credit union and every personwho wants to start a credit
union, every small credit union,the ability to uh to survive and
thrive uh in their communities.
SPEAKER_01 (35:40):
What are some I'm familiar with uh some of the big
credit unions in DCUC.
What are some of the smallerones?
SPEAKER_02 (35:48):
Oh my god.
I mean, you know, we we uh youknow, I don't know if you know
Doug Wadsworth.
He's been uh leader in the smallcredit union movement,
Tri-Cities up in Washington.
There, they it'll be announcedand probably probably just uh um
gonna get an angry email fromthe communications for
secretary, but you know, thatthey've joined.
You know, we've we've got creditunions all you know all across
(36:11):
this country.
You you know, yeah, a great CEOin in credit union, Frontier
Community Credit Union in Kansasunder Michael Augustine is one,
and they are a strong andvibrant credit union.
And when I say you know,smaller, I mean, you know, we're
blessed to have membership fromPenn Fed at the high, you know,
all the way down to, you know,uh, I think Hickham, um, if if
(36:36):
I'm remembering correctly, uhout in Hawaii is, you know, 30
to 50, 30 to 50 million.
And hopefully I've got thatnumber correctly from a
conversation.
So uh DCUC has the biggest ofthe big and the smallest of the
small, and every one of them hasa seat at the table to help this
(36:57):
organization uh chart a brightfuture for all credit unions.
SPEAKER_01 (37:03):
Now, one point you made in your CU Insight uh piece
was that most tradeassociations, the biggest
members also A, pay the mostdues and B have the most
influence.
I mean, I worked for a many,many, many years ago.
I worked for a very big tradeassociation in Washington, DC,
(37:26):
which had thousands of members,but I'd say about eight had
significant influence.
And these were today's theyweren't that as big as the
numbers I'm gonna give you.
These were many billions ofdollars in annual sales, many
billions were the eight bigones.
And uh and the other guys, yeah,yeah, yeah, yeah.
(37:46):
You have a say here.
Sure you do.
Come on in.
Yeah, sure.
Uh talk to my secretary, by theway.
SPEAKER_02 (37:54):
No, yeah, no, I I and you're you you are right,
and I think that that's the sadfact of all associations, and
I'm not specifically calling outcredit union and trade
associations, but I think thatDCUC has a little bit of the
secret sauce on making sure allvoices are around the table with
kind of our due structure.
We have a limited due structure.
(38:16):
It's capped so that you know,the you know, the Pen Feds, the
Vice Stars, the Randolph Brooks,you know, year 18, 19, 20, 20
billion, yeah, you know, on up,the maximum amount of membership
dues that they can pay is$22,500.
You know, and we also have um,you know, we just as a as an
(38:40):
association, last year with, youknow, within the last 14 months,
our membership voted to doubleour dues on ourselves because of
our growth, but also we hadn'traised our dues since 1996.
And so, and so we it's basedupon asset size.
But when you look at thatnumber, it's kind of per capita.
So that your ability, your inputis not based upon the size of
(39:03):
your dues check.
Everyone's welcome.
We're proud to have on ourboard.
I so yeah, I I I I love when Ican email them.
Ron Aoki, you know, out inHawaii is uh small credit union,
uh Maggie uh uh sorry, Maggie atKeys Federal, uh down in Key
West, of which I I need to makesure I can get a trip down there
(39:23):
this winter.
You know, she's the chairman ofour board, uh the chair of our
board, and she's a a smallcredit union CEO and leader.
So, you know, in our DNA as anorganization, is all sizes of
credit unions working togetherfor the movement.
Um, we also have uh we we callit a limited membership for you
(39:46):
know you're just not allowed tovote, and that's capped at
$3,000.
So again, the largest of thelarge can only write a$3,000
check.
And we actually, for creditunions of$100 million and below,
we actually reduced our dues,you know, to write so that many
of them write like a$1,000 checkor a$2,000 check.
(40:06):
And so, you know, when you'relooking at, you know, your your
your spreadsheet at the end ofthe year of what you can be a
part of, that return oninvestment for advocacy or
working with associations,you're not going to find
anything better uh than DCUCbecause not just based upon you
know the amount, but the fact ofhow the organization is
(40:29):
structured to ensure thateverybody is asked for their
opinion to help uh improve theorganization.
SPEAKER_01 (40:40):
Now, I'm I'm not asking you to criticize the
largest credit union tradeassociation, but if I'm a credit
union and I say, okay, guys, Ibelong to that larger one.
Why would I want to join youtoo?
And I assume most of yourmembers also belong to that one.
Perhaps I'm wrong.
SPEAKER_02 (40:58):
Yeah, because they're able to uh on a cost
side.
And you know, we don't offertrainings and education, we
partner with other organizationsto make it available to them,
whether it's Qs and Makeup andothers.
SPEAKER_01 (41:11):
Um, and and and you know, the move what what do you
offer that that I'd want tojoin?
Oh, I you you're not gonna getbetter advocacy, you're not
gonna get uh, you know, I thinkyou're gonna see as a part of us
in 2026, uh, you know, ourgrowth in regulatory advocacy,
(41:32):
um, you know, in terms of thatyou hired or not hired, which
probably is something whosespecialty is regulatory
advocacy.
SPEAKER_02 (41:40):
Absolutely.
And we're gonna be launching umin January, you know, regulatory
monthly regulatory calls withwhoever you're you designated
your credit union to call andtalk with everybody about what
you're experiencing, whatletters we're writing, so that
you have direct input uh oneverything that's going on.
So um, you know, advocacy is atthe heart of what we do as an as
(42:04):
an association organization, butalso there are very unique
things that relate to dealingwith the DOW, the Department of
War now, uh, and regulations, etcetera.
If you serve on a base or youserve a veterans community, that
we have unparalleled umexperience with.
And that, you know, if somebodywalks in and says, hey, I need
(42:27):
to apply for my VA home loan,and you're not in a traditional
strong military veterans area,you don't know how to do that.
With us, you know, we weactually built out an entire
series of pamphlets oreducational documents, you know,
for veterans and for active dutyand also for the credit union
(42:48):
teams for them to be, how do youdeal with the military?
How do you deal with the factthat, okay, I just got called up
to active duty and that changesyour status in terms of
sometimes direct deposit orinsurance and things like that?
Or, you know, hey, I'm having anissue with uh somebody trying to
come on to base, we have theexclusive agreement.
(43:09):
How do we we have the ability tobring in decades upon decades of
experience in leadership um tonot only defense credit unions,
but every credit union on how tonavigate everything over at the
DOW moving forward.
And when you tag that withaggressive, nimble advocacy at
(43:31):
the federal and state level, onboth Capitol Hill and the halls
of our regulators, the return oninvestment uh for a credit union
leader is unparalleled.
SPEAKER_01 (43:45):
Before we go, think hard about how you can help
support this podcast so we cando more interviews with more
thoughtful leaders in the creditunion world.
What we're trying to figure outhere in these podcasts is what's
next for credit unions.
What can they do to really,really, really make a difference
in the financial scene?
Can't all be megabanks, can it?
(44:07):
It's my hope it won't all bemegabanks.
It'll always be a place forcredit unions.
That's what we're discussinghere.
So figure out how you can help.
Get in touch with me.
This is RJ McGarvey atgmail.com, Robert McGarvey
again, and that's rjmeggarvey atgmail.com.
Get in touch, we'll figure out away that you can help.
We need your support, we wantyour support, we thank you for
(44:30):
your support.
The CU2.0 podcast.
Welcome to the CU2.0 podcast.
SPEAKER_00 (00:05):
Hi, and welcome to the CU 2.0 podcast with big new
ideas about credit unions andconversations about innovative
technology with credit union andfintech leaders.
This podcast is brought to youby Quillo, the real-time loan
syndication network for creditunions, and by your host,
long-time credit union andfinancial technology journalist
(00:27):
Robert McGarvey.
And now the CU 2.0 podcast withRobert McGarvey.
SPEAKER_01 (00:35):
Go back when I started to report on credit
unions and there were over 8,000of them in the United States.
Now there are 4,370.
Just in 2020, there were 5,099credit unions.
In five years, the count is downby 700 plus.
The math is going forward toextinction.
(00:59):
That's why I smiled when I sawJason Stark's CU insight piece
on why small credit unionsmatter and how we can help them
thrive.
Jason is Chief Advocacy Officerat DCUC, the Defense Credit
Union Counsel, and is a pastpodcast guest.
There's a link to that show inthe show notes.
So why is he advocating forhelping little credit unions
(01:23):
stay alive?
I had to get him on the show.
This episode was recorded onNovember 12, just hours before
the federal government reopened,after the longest shutdown in
history.
We start by talking about what'sgoing on in Washington, D.C.
now, and quickly move into whyDCUC has become an aggressive
(01:43):
lobbyist, and then we focus onwhy small credit unions matter,
why DCUC cares, and what thecredit union movement can do to
help more small credit unionsstay alive and thrive.
It's all good stuff.
Listen up.
How are you?
What are you doing?
SPEAKER_02 (02:04):
Just waiting for the government to reopen.
So uh, you know, we'll take thatvote at 8 p.m.
tonight, and then we can getback to uh, you know, the normal
work of fighting for creditunions.
SPEAKER_01 (02:14):
So what have you been doing for the last 40 some
odd days?
I'm not your boss.
I'm not gonna dock your pay oranything.
Just curious.
SPEAKER_02 (02:26):
No, I mean, uh a lot of it is is you know, our
megaphone or our communicationchannels uh kind of ramped up in
terms of getting almost daily orhourly asks from both Democrats
and Republicans, like, what areyou guys doing to help people?
You know, what are the programsthat you have going on?
(02:47):
How can I help, or how can I beinformed?
And making sure that what ourcredit unions did from day one,
their members of Congress knew,and they could also help share
that information, but also thatwe could help promote, you know,
obviously what's going on.
Now, the regulatory side didn'tstop.
They kept sending out letters,asking for new things, uh, that
(03:09):
kept moving forward.
But um, you know, the work onthe NDAA was still going on
behind the scenes by staff.
So it's not as if our workstopped, it's just that there
just weren't as many committeehearings going on.
SPEAKER_01 (03:26):
Now, what's going on at NCUA?
SPEAKER_02 (03:30):
You're in terms of anything, everything.
SPEAKER_01 (03:34):
I mean, uh, is there any probability that they'll
increase the number of uh boardmembers or actually add some?
SPEAKER_02 (03:42):
Oh, I mean, you know, statutorily, no.
Um, but will the administrationstart filling out the rest of
them?
I think that I think they're ina holding pattern.
I think pretty much everybody isuntil you know the the the
Supremes rule uh on the courtcase.
Uh not this one, but dealingwith the presidential powers uh
(04:04):
and you know removing ofindependent, you know,
independent directors.
I think once that happens, Ithink you'll have either a green
light or a uh red light uh interms of how uh in terms having
the administration announcetheir nominees.
SPEAKER_01 (04:22):
I I know they're out, I know they're out vetting
people, so now I hear things areproceeding much more slowly
internally at NCOA due to thestaff reduction.
Have you heard similar?
SPEAKER_02 (04:37):
Uh I haven't, you know, I was just testifying over
in front of the board at thebudget hearing, and obviously
you have uh, you know, you're alittle 920, 930 employees.
Uh I mean that's a that is uh a23% reduction.
Uh you still have a few of thosethat are gonna come off because
some took buyouts and they'reworking until uh December 31st.
(05:02):
Um, I have not heard anycomplaints uh along those lines.
Uh, you know, I'm I I think thatwhat you're gonna see with the
reduction in staff is thatyou're gonna see, you know, as
they've talked about, expandedtime between exams, you know, uh
those types of things, but Ihave not heard of a work
(05:23):
slowdown or any complaints aboutthat.
SPEAKER_01 (05:27):
Has DCUC taken a position vis-a-vis that extended
time between exams probability?
SPEAKER_02 (05:37):
Our position that we expressed in uh during the
budget hearing was that if if ifthey have a reduction in
resources, both either staff oruh you know financial, then use
those resources where they makethe most impact.
For a well-run Camel 1 or 2credit union, then maybe you
(05:58):
don't need to have the most, youcan you can extend that exam
period out.
But for ones that need moreoversight, that's where you
should focus your resources.
So that's kind of the positionthat we've taken uh uh on the
issue is that you know, dedicateyour resources where they are
needed most, uh, and that uh asyou are requesting information
(06:19):
from credit unions, not justblindly go down a checklist and
say, okay, I need this document.
Okay, why do you need thisdocument from this credit union
so that it saves time on bothends uh in justifying the
request of information and thework that a credit union has to
do uh to comply?
SPEAKER_01 (06:40):
Yeah, and I do do I think Navy Federal, which I know
is no longer a DCUC member orunless it's rejoined.
SPEAKER_02 (06:47):
Nope.
SPEAKER_01 (06:48):
Um I do I think they need to uh uh an exam once a
year.
I don't think so.
SPEAKER_02 (06:54):
Not no, I I I don't.
I I think that you know, ifthere are you know a systemic
problems, that's where you putthose resources.
But if you have awell-capitalized, well-run
credit union, whatever its size,then you can say, hey, you know,
let's do four in, you know,instead of uh, you know, every
(07:17):
two, you know, justify the theneed for a shortened period of
time between exams.
Because, you know, sometimes youget it so like you're going off
one exam and going on toanother.
So um, you know, we need to makesure that we are removing as
(07:39):
many administrative hurdles thatcredit unions have that prevent
them from fulfilling their dailymission of opening the doors at
each of their branches and beingthere to serve their members and
their communities.
SPEAKER_01 (07:55):
Um DCUC has been, to my eyes, increasing its lobbying
team, not necessarily withemployees, but with consultants,
et cetera.
Uh pretty aggressively.
Why?
SPEAKER_02 (08:09):
Uh you know, uh it to respond to the needs of our
members.
You know, we have grown uh ourmembership since March by about
35 to you know, almost 40percent.
And you know, we're we you knowwe're announcing almost a new
member a week, uh, and and we'revery proud of that record.
So that to ensure that we areable, you know, to adequately
(08:32):
represent their needs and uh youknow, get the changes that that
that will benefit them and theirability to serve their members,
uh, then we've kind of adopted,we call it kind of a Green Beret
advocacy uh that as issues areout there, we'll staff up,
we'll, you know, uh and staffdown uh as much as as much as
(08:55):
needed.
But you have to remember, mostof this year we've been, you
know, helping lead the movementuh on the tax issue.
Um, you know, that was fromJanuary on uh when the memo was
leaked uh to you know uh to thepress about you know the 55-page
memo of how do we payessentially what are the what
(09:15):
are the pay fors for the bigbeautiful bill?
And right there listed is thecredit union tax status.
Um, you know, we're we're notgonna spare an expense to ensure
that credit union interests areprotected.
And I think that we've done anincredible job at that, which is
proven by you know the fact thatmore and more credit unions are
(09:38):
coming to DCUC and asking tojoin.
SPEAKER_01 (09:42):
Now DCUC membership.
I I saw just just this week, Ithink Desert Financial and I
live I live in Phoenix andthey're they're they're a big
dog here.
SPEAKER_02 (09:55):
Yeah, 9 billion.
SPEAKER_01 (10:00):
I mean, historically.
Yeah.
Uh so what's the criteria?
What and also uh of a guy I likevery much, Peter Rice and
Hanscom.
SPEAKER_02 (10:09):
Yep.
SPEAKER_01 (10:09):
Now that's that's a classic military credit union.
SPEAKER_02 (10:12):
It is, and you know, you have to, you know, we we
are, you know, um evolving uh asthe movement has changed, but
also as how our credit unionsserve their communities.
Every credit union in theirfield of membership has a
veteran or somebody who knows aveteran or or somebody who has
(10:34):
served or is serving, you know,in the United States military.
So everybody, every credit unioncan be a member of DCUC.
You know, we use the motto of,you know, we're we're built for
defense, but we're open for all.
Because the issues that impactcredit unions, you know, the tax
(10:55):
issue impacts Penn Fed, RandolphBrooks, you know, Hanscom, as
you mentioned, as well as itrepresents schools choice and
uh, you know, Black HillsFederal Credit Union in South
Dakota.
So uh the need uh for DCUC toexpand to make sure that we are
(11:17):
not only representing the viewsof the traditional on-base only
credit unions, we represent theentire credit union movement and
every credit union that wants tojoin.
SPEAKER_01 (11:32):
And as you Sam, unless there's a credit union
I'm not aware of for hardcorepacifists who are
multi-generational pacifists, Idon't think there's any credit
union that doesn't have somemilitary connection in its
membership.
SPEAKER_02 (11:48):
Yeah, and that's great.
And honestly, if there was onemore power to them, that's
great.
That's what the you know, thecooperative method is.
It's kind of like you've gotcredit unions that are on, you
know, at coal companies.
We have credit unions that areonly do green lending or only
for environmentalists.
So I think that power of thecooperative, the power of the
cooperative model in terms of,you know, putting your money,
(12:12):
you know, where you want it togo is incredibly powerful and
it's in in the power of thecredit union movement.
SPEAKER_01 (12:19):
Now let's shift gears to why I reached out to
you, which was that CU Insightpiece where you put forth the
proposition that essentiallyit's in the interest of all
credit unions to keep smallcredit unions alive.
SPEAKER_02 (12:35):
Absolutely.
SPEAKER_01 (12:36):
And I first heard that proposition from Jim
Blaine, who at the time was CEOof State Employees, credit
union, the second biggest creditunion in the country.
And I said something to Jim,like, you know, why are all
these credit unions walking thehill with their tea tiny things?
And he said, You don't get it,man.
In a lot of a lot oflegislators' offices, I'm
(12:58):
representing a big bank.
These are representing thepeople.
Uh now, Jim was alsounderstanding his influence, at
least on North Carolinapoliticians.
SPEAKER_02 (13:08):
Right.
SPEAKER_01 (13:09):
But uh but he was sincere in saying we need those
the voices of the small creditunions to have more credibility
in Washington, D.C.
in particular.
Now, so then preparing for this,I looked in 2019, there were
5,236 federally insured creditunions.
SPEAKER_02 (13:30):
Right.
SPEAKER_01 (13:30):
Uh in Jul June, July of this year, there were 4,370.
unknown (13:38):
Yep.
SPEAKER_01 (13:38):
That's that's down, I don't know, 800, something
like that.
Yep.
And there's roughly 100 creditunions that aren't federally
insured, but it doesn't reallyaffect the numbers.
When I started writing aboutcredit unions many years ago,
there were over 8,000 creditunions.
So we're approaching about a 50%reduction.
(14:04):
And at this rate, I I'm notgonna do the math about when we
reach just one, just NavyFederal.
Schools first probably wouldclaim they'd be alive too.
Okay.
There'll be a couple.
SPEAKER_02 (14:16):
Yeah, I think Bill Bill would make sure they are.
SPEAKER_01 (14:18):
So yeah.
So it's we're but the the thetrend line is obvious and
serious, a big deal.
So then what?
What can happen to keep thesesmall credit unions alive?
SPEAKER_02 (14:35):
I think there's a myriad of options.
I think that you know, uhsupport from within industry.
I think in my article I'vetalked about or I've talked
about publicly, you know, uhkind of an obligation for large
credit unions to to assistsmaller credit unions.
You know, one of the issues forsmaller credit unions is
(14:57):
economies of scale and beingable to uh uh, you know, handle
processes or advice or help, um,you know, moving forward, if
there is an ability for a largercredit union to provide training
or resources for small creditunions, I think that improves
the overall health of the entiremovement.
(15:22):
Because I think, you know, youmentioned Mr.
Blaine's comments, and I used towork up on Capitol Hill, and to
an extent he is right that whenyou have a you know a Navy
walk-in or a, you know, uh or alarge credit union for that
area, in in a lot of electedofficials' minds and others,
(15:43):
they see asset size and they'rethinking, oh, you're too big to
care about the little people.
Um, and our ability to ensurethat within our DNA, whether
you're Navy size or tri-citysize in Washington state, you
are working to serve yourcommunities.
But it is incredibly helpful.
(16:04):
I can talk to you on theadvocacy side and the political
side to be able to walk in andsay, here's a$50 million credit
union serve in this community,and here's a CEO that is the
fill-in teller on Mondaysbecause they don't have enough
staff.
You know, that's incredibly,incredibly uh important if we
(16:24):
want to ensure that there aremembers of Congress and their
staff that want to or will helpuh and help advance the credit
union proposals that are thatthat are in front of them.
Now, you know, uh, every youknow, the definition of what a
(16:45):
small credit union is is alwayskind of a floating one.
You have the 500 million forcomplex, you know, complex or
not.
Um, you've got the numbers of100 million, you know, it's an
exact definition of the NCUA.
Um, and you know, uh, I youknow, you have$500 million
credit unions call them small,you have$40 billion credit
(17:07):
unions refer to themselves assmall.
And I hope that every creditunion, regardless of size, try
it wants to kind of have thatmoniker of a small credit union
because of what it represents.
It represents, you know, thattie to community that they know
your name when you walk in thedoor.
They uh, you know, they've gotthat cup of coffee with the loan
(17:29):
officer, and they're talkingabout the local high school
football game that you know theprevious Friday, and what you
know, the loan that you need.
So there's that discussion ofsmall credit union as a thought
or a uh you know uh of how youshould act.
(17:51):
But it is it is it that you knowit it is a challenging to say
the least ex uh you know,process for her to walk in and
say, here's a 10 billion, here'sa 9 billion, here's a 20
billion, and they're you know,they're looking at you and say,
(18:11):
okay, where's the 50, where'sthe 100 million dollars?
Because you need all of them inthe circle of the uh of the
movement, healthy and happy andsuccessful, so that the movement
and the credit union industrywill be here five years from now
or 10 years from now.
(18:32):
And, you know, there's gonna becontinued consolidation, whether
it is changing demographics inrural America where I'm from,
you know, changing technology,et cetera.
But we need to work as anindustry to put in place support
from credit union to creditunion and also regulations and
(18:53):
rules in place or repeal some ofthem, so that credit unions do
not need to merge based upon thecost of filling out paperwork.
That that that it should be acommunity-based decision, not a
do we have the resources to makesure we're filling out every
SARS report, you know, thatnobody in Washington, D.C.
(19:14):
ever reads.
And sorry, for a kind of alonger answer on that one.
SPEAKER_01 (19:19):
Oh, I I agree.
And go back to state employees.
When Latino Credit Union wasfounded in North Carolina, for
many years, maybe still today, Idon't know, uh, state employees
did their core processing free,I think free of charge.
I'm not 100% sure about that,but I know Jim Blaine wasn't
(19:39):
making any money on thatprocessing.
SPEAKER_02 (19:42):
So I think that if if you can find more examples of
that across the country, youknow, I think that's you know,
important because if we are notmaking it attractive as a viable
prospect in a community to starta credit union, then we're not
(20:03):
gonna have new credit unionsstart and we're not gonna have
credit union stainlesscommunities.
I come from, you know, theDakotas, you know, where uh you
know uh uh most reserve NativeAmerican reservations have no
financial institutions, uh, youknow, branches on their area,
uh, you know, uh on thereservation.
(20:24):
And that that that's that'sinexcusable in in terms of the
ability to serve and you know anunderserved population.
So, you know, what can we do asan industry to make it, I'm not
even saying profitable, I'msaying making it um having the
ability to start and grow andmaintain credit unions in towns
(20:51):
of 5,000 to you know uhcommunities inside of New York
City that want to start one.
SPEAKER_01 (21:00):
Well, I I don't think running Latino credit
unions numbers cost stateemployees anything.
I think they had excess capacityin their system, which I have in
my house, not enough to run acredit union, but it's not
unusual to have excess capacityand you say, hey, well, you
know, we can help you out hereand we'll down the line, we'll
(21:21):
figure out if you need to getyour own stuff.
And but for now, sure, we canget you going.
SPEAKER_02 (21:25):
Well, and I would hope that more credit union CEOs
and boards would say, okay, whatcan we do to help?
And not see, you know, if you'rea$185 billion credit union, I
think you should not beconcerned of a$35 million credit
union and helping them.
That you're not going to losemarket share if you help them
(21:48):
with some of their back officestuff or provide strategic
advice, or as you're doingemployee trainings, invite their
employees to come over.
So that's not an expense thatthey have to have on uh on their
books.
So I think that, you know, byfully embracing the principles
that we have as an industry, Ithink it will be helpful uh to
(22:13):
the stability, survivability,growth of our smaller credit
unions all across the nation.
SPEAKER_01 (22:23):
Well, and another way to look at it is some years
ago, I added up the assets ofall the credit unions, and all
of them together, including NavyFederal, had less assets, fewer
assets than JP Morgan Chase.
And then a few years after that,I looked at it again, and Chase
had increased the margin a lot.
(22:45):
It's uh it was fairly close thefirst time I did the numbers.
And a few years later, I waslike, wow, there's a big gap
open that opened up here.
And uh so all these guys arekind of small.
And as I say to credit unions,you know, I don't personally
know Jamie Dimon, the CEO of JPMorgan, but I'd bet any amount
of money, he does not wake up inthe morning saying, What the
hell did Navy Federal doyesterday?
(23:08):
He might say, What did Citicorpdo yesterday?
Uh, or what did Deutsche Bank doyesterday?
But no, he just and I and I'msure he wishes the best to Navy
Federal as far as he does.
SPEAKER_02 (23:21):
Yeah, and I I was I was blessed up on Capitol Hill,
you know, working for uh SenatorKevin Kramer is on still is on
the Senate Banking Committee.
And I would be in the meetingswith you know uh Moynihan from
Bank of America and Wells Fargoand City and Jamie actually uh
from Chase.
(23:41):
And yeah, the you know, thewe're fearful of credit unions
was never mentioned in any ofthose meetings.
It was more, yeah.
I mean, their their peers are,you know, you know, our are Bank
of America or HSBC or you know,credit suisse, you know, those
are the those are the onesthey're taking over.
But none of those institutions Imean I I just named care about a
(24:06):
timber community in northernIdaho of 10,000 people because
it it it's it's a blip on theirbooks.
The in those communities, it'sthe community to financial
institutions, and I will give ashout out to community banks
that have dug in and are helpingcommunities, small communities
across this country.
(24:26):
Um, and they're facing the samepressures that small credit
unions are in terms ofconsolidation, et cetera.
So, you know, I think that youknow, as as it relates
specifically to credit unions,uh we as an industry need to
lead to ensure the survivabilityso that we are not Australia or
(24:50):
Canada, where 10 or 15 yearsfrom now we have three because
you know that then then the, Imean, how how do you serve your
community then?
How do you serve your field ofmembership when the entire
country is your field ofmembership?
SPEAKER_01 (25:08):
Yeah.
And I I I think if every if ifevery credit union of any size
decided to do something to helpsmall credit unions in their
community, right there it wouldmake a difference.
SPEAKER_02 (25:22):
Yeah.
And the numbers are still there.
I mean, Chase Bank on its ownhas more assets, the entire
credit union industry.
A lot more a lot more.
And if you know, let's just sayNavy Federal made the choice and
they became a bank.
They are on the smallest tosmall size of a regional bank.
(25:45):
And so you need to put things inperspective in terms of size,
you know.
And this is kind of one of thosethat I'm gonna pull an analogy
from Benjamin Franklin that it'sthe time for all of us to hang
together, or we're certainly allgonna hang separately.
And by that, I'm talking abouteverybody coming together and
(26:07):
saying, what can I do to help?
Hey, I mean, I, you know, uh, ifif if if I have it correctly, I
think, you know, uh in the stateof Minnesota, they helped start
uh a fully African-American uhcredit union, and they had
investments or deposits comingfrom other credit unions if you
(26:28):
know, to help support.
So those little things arehappening generically, not you
know, organically across thecountry.
I think it just needs to be,when it happens, praised and
celebrated.
And also kind of that challengefrom CEO to CEO to help each
(26:49):
other out.
Because, you know, you go to myhome states of the uh of the
Dakotas, you know, the largestcredit unions are one in two
billion.
So it's not like you're youknow, you're at the school
choice size or Randolph Brookssize or Penn Fed size.
So, but in that community, theyare they're the Navy Federal of
North Dakota.
That that type of discussion.
(27:09):
So what can they help do toensure that you know qua you
know, that a you know, that a 50or a 10 or a hundred million
dollar credit union can help itcan survive?
SPEAKER_01 (27:23):
Well, one of the principal reasons a credit union
merges is a long-serving CEOretires and no one wants the
job.
SPEAKER_02 (27:33):
Yep.
SPEAKER_01 (27:34):
Uh and the board, and I'm not faulting them for
this, after trying and trying,they said we just got to merge
out of existence.
We got to.
But years ago, if you needed aCEO, you could call Jim Blaine
and explain your situation, andhe might have an employee he
would give you, assuming theemployee was interested in it.
(27:56):
It's uh I mean he created a lotof CEOs, I mean, dozens and
dozens.
Um and uh, you know, it waspeople who wanted to run their
own shops, they were never gonnarise to the very top with state
employees.
But hey, you know, I got thislittle$50 million thing over
here.
SPEAKER_02 (28:13):
No, and we what you're explaining to me is kind
of the you know, you know, thecoaching tree that you have in
in football.
Who comes off the Bill Walshscheme?
You know, who comes off the BillParcells?
Because, you know, uh to useyour you know example from from
Mr.
Blaine, it's like, hey, I gotsomebody who's talented, but
(28:36):
they're not gonna run a 50billion, a$50 billion, you know,
or a$10 billion uh credit union.
They need they need CEO or CC-suite experience.
Why not say, hey, you know what?
You know, help help that smallcredit union get a good CEO
where you're investing, and andand I'm just throwing things out
(28:56):
here.
Maybe you know, uh you help withbenefits or you give a grant or
something like that, where theyget a high-quality CEO who
learns, and then you have builtup a relationship between those
two credit unions, but then alsoyou're helping homegrown credit
union talent see that, hey, Ihave a future as a credit union
(29:21):
leader in this country in thiscountry.
And I know those are radicalideas to sometimes to do, but
credit unions are kind of theoriginal financial, you know,
radical changes, you know.
You think of it also as like thefarm team, you know, in in
baseball.
Like, you know, what are youdoing to help, you know, get
(29:44):
your hitter from A to A to AAAto you know, playing in the
majors and that type of thing?
What are we as a movement?
And while we are separate, weare all together in the
movement.
What are we doing to help growour own?
SPEAKER_01 (30:02):
And credit unions still will tell you in many
cases that they don't competewith other credit unions, which
is not true, but they they willtell you that.
And they wish it were true inmany cases.
Right.
It's uh then again, many yearsago, I asked the then CEO of
Navy Federal uh if he competedwith Penn Fed, and there was a
long pause, and he said, no,USAA.
(30:23):
It's uh it's uh which was aboutthe same size as as Navy.
They were really they they bothhad about the same playing
weight.
SPEAKER_02 (30:32):
So exactly.
And you know, uh everybody'sthat kind of that way.
You know, you do compete, youwant to be the biggest, the
best, you know, the you know,having the largest membership,
all that type of stuff, but youknow, that that's that's kind of
capitalism in the American way,and that's not something we need
to be ashamed about uh ofwanting to be better or the
(30:53):
best.
But we also can we also need tounderstand that we embrace our
we we embrace the the financialcommunity in a little bit
different way than our ourfriends, the banks, that we want
to grow others at the same time.
It's not us and nobody else.
It's okay, how how can we as amovement continue to you know
(31:15):
continue to grow?
And you know, we we've talkedabout what individual credit
unions can do, but thechallenges facing small credit
unions and the movement overallis, you know, sometimes mergers
happen because you butt it up,you're you're up against the cap
on what you realistically canget under your field of
membership.
You know, what are we doing tohelp expand credit unions'
(31:37):
ability to go get new members orto people knocking on the door
saying, I want to be a member?
Oh no, you don't live on theright street, or you're not at
the right company, or you're notin the right county, you know.
What are we doing at the stateand federal level to fight for?
And the banks, you know, aregonna, you know, go tooth and
(31:57):
nail.
But what are we doing to expandthat?
Changing the discussion fromwhat is the bank getting what
the credit union bit to credit.
What are we doing to ensure thatthe community and the individual
in the community has the largestpossible choice of financial
(32:18):
institutions to serve theirneeds?
SPEAKER_01 (32:21):
Interesting.
Many credit unions, including umnot Navy, but many of the
military themed credit unionshave a backdoor to entry.
And the credit union Iprincipally use, I joined, I the
CEO asked why I wasn't a member.
I I lived in his state, I knewthe guy.
(32:42):
I said, I you know, I not youknow I don't have any
relationship to the things.
And he said, Hey man, just give10 bucks to this charity and you
can become a member.
And I said, Wow, really?
And yeah, really, and I've beena member of them for many years
now.
Uh and other instant moreinstitutions can use that
technique.
(33:03):
Yeah.
SPEAKER_02 (33:04):
No, I agree 100%.
And we in credit unions have hadto be creative to get around
these artificial fences thathave been placed around their
ability to serve the largestpopulation.
And wouldn't it be great ifanybody who walks in your door
in your community, if you haveyour charter set in the right
(33:26):
way, could just join?
That that's it.
I like the fact that you sponsorthe local softball team.
I want to be a member.
I like the fact that you have adebit card that will allow me to
donate directly to the museumfor every purchase I make.
Nobody else in this town doesit.
That'd be fantastic.
(33:48):
And that's just kind of uh moreof an example of credit unions
and credit union, moreimportantly, trade associations,
getting in and saying, what canwe do to remove all the barriers
to credit union?
And I'm not saying unbridledgrowth, but credit unions,
(34:11):
communities that they servehaving the ability to say, I
want to be a member of my creditunion, and not have government
tell you, hey, you don't live inthe right spot, you can't join.
So, you know, I know that thatthat doesn't happen overnight
and you you can't snap yourfingers, but you know, to kind
(34:34):
of paraphrase John F.
Kennedy's speech at RiceUniversity about, you know, why
does Rice play Texas?
They do it because it is hard.
And why are we going to themoon?
Because you know, because it ishard.
And those are the types ofchallenges that we need to
aspire to as associations andmovement to accomplish and not
(34:54):
just be happy with, you know,the nibbles around the corner.
We need to be big, we need to bebold in terms of the issues that
we are going to fight for.
Otherwise, 10, 15, 20 years downthe road, credit unions are
going to be facing the samequestions about growth.
And maybe we're down to 2,000credit unions then, because we
(35:18):
didn't dig in now to provide theavenues.
And I'm not saying everythingwill work, but we to give every
credit union and every personwho wants to start a credit
union, every small credit union,the ability to uh to survive and
thrive uh in their communities.
SPEAKER_01 (35:40):
What are some I'm familiar with uh some of the big
credit unions in DCUC.
What are some of the smallerones?
SPEAKER_02 (35:48):
Oh my god.
I mean, you know, we we uh youknow, I don't know if you know
Doug Wadsworth.
He's been uh leader in the smallcredit union movement,
Tri-Cities up in Washington.
There, they it'll be announcedand probably probably just uh um
gonna get an angry email fromthe communications for
secretary, but you know, thatthey've joined.
You know, we've we've got creditunions all you know all across
(36:11):
this country.
You you know, yeah, a great CEOin in credit union, Frontier
Community Credit Union in Kansasunder Michael Augustine is one,
and they are a strong andvibrant credit union.
And when I say you know,smaller, I mean, you know, we're
blessed to have membership fromPenn Fed at the high, you know,
all the way down to, you know,uh, I think Hickham, um, if if
(36:36):
I'm remembering correctly, uhout in Hawaii is, you know, 30
to 50, 30 to 50 million.
And hopefully I've got thatnumber correctly from a
conversation.
So uh DCUC has the biggest ofthe big and the smallest of the
small, and every one of them hasa seat at the table to help this
(36:57):
organization uh chart a brightfuture for all credit unions.
SPEAKER_01 (37:03):
Now, one point you made in your CU Insight uh piece
was that most tradeassociations, the biggest
members also A, pay the mostdues and B have the most
influence.
I mean, I worked for a many,many, many years ago.
I worked for a very big tradeassociation in Washington, DC,
(37:26):
which had thousands of members,but I'd say about eight had
significant influence.
And these were today's theyweren't that as big as the
numbers I'm gonna give you.
These were many billions ofdollars in annual sales, many
billions were the eight bigones.
And uh and the other guys, yeah,yeah, yeah, yeah.
(37:46):
You have a say here.
Sure you do.
Come on in.
Yeah, sure.
Uh talk to my secretary, by theway.
SPEAKER_02 (37:54):
No, yeah, no, I I and you're you you are right,
and I think that that's the sadfact of all associations, and
I'm not specifically calling outcredit union and trade
associations, but I think thatDCUC has a little bit of the
secret sauce on making sure allvoices are around the table with
kind of our due structure.
We have a limited due structure.
(38:16):
It's capped so that you know,the you know, the Pen Feds, the
Vice Stars, the Randolph Brooks,you know, year 18, 19, 20, 20
billion, yeah, you know, on up,the maximum amount of membership
dues that they can pay is$22,500.
You know, and we also have um,you know, we just as a as an
(38:40):
association, last year with, youknow, within the last 14 months,
our membership voted to doubleour dues on ourselves because of
our growth, but also we hadn'traised our dues since 1996.
And so, and so we it's basedupon asset size.
But when you look at thatnumber, it's kind of per capita.
So that your ability, your inputis not based upon the size of
(39:03):
your dues check.
Everyone's welcome.
We're proud to have on ourboard.
I so yeah, I I I I love when Ican email them.
Ron Aoki, you know, out inHawaii is uh small credit union,
uh Maggie uh uh sorry, Maggie atKeys Federal, uh down in Key
West, of which I I need to makesure I can get a trip down there
(39:23):
this winter.
You know, she's the chairman ofour board, uh the chair of our
board, and she's a a smallcredit union CEO and leader.
So, you know, in our DNA as anorganization, is all sizes of
credit unions working togetherfor the movement.
Um, we also have uh we we callit a limited membership for you
(39:46):
know you're just not allowed tovote, and that's capped at
$3,000.
So again, the largest of thelarge can only write a$3,000
check.
And we actually, for creditunions of$100 million and below,
we actually reduced our dues,you know, to write so that many
of them write like a$1,000 checkor a$2,000 check.
(40:06):
And so, you know, when you'relooking at, you know, your your
your spreadsheet at the end ofthe year of what you can be a
part of, that return oninvestment for advocacy or
working with associations,you're not going to find
anything better uh than DCUCbecause not just based upon you
know the amount, but the fact ofhow the organization is
(40:29):
structured to ensure thateverybody is asked for their
opinion to help uh improve theorganization.
SPEAKER_01 (40:40):
Now, I'm I'm not asking you to criticize the
largest credit union tradeassociation, but if I'm a credit
union and I say, okay, guys, Ibelong to that larger one.
Why would I want to join youtoo?
And I assume most of yourmembers also belong to that one.
Perhaps I'm wrong.
SPEAKER_02 (40:58):
Yeah, because they're able to uh on a cost
side.
And you know, we don't offertrainings and education, we
partner with other organizationsto make it available to them,
whether it's Qs and Makeup andothers.
SPEAKER_01 (41:11):
Um, and and and you know, the move what what do you
offer that that I'd want tojoin?
Oh, I you you're not gonna getbetter advocacy, you're not
gonna get uh, you know, I thinkyou're gonna see as a part of us
in 2026, uh, you know, ourgrowth in regulatory advocacy,
(41:32):
um, you know, in terms of thatyou hired or not hired, which
probably is something whosespecialty is regulatory
advocacy.
SPEAKER_02 (41:40):
Absolutely.
And we're gonna be launching umin January, you know, regulatory
monthly regulatory calls withwhoever you're you designated
your credit union to call andtalk with everybody about what
you're experiencing, whatletters we're writing, so that
you have direct input uh oneverything that's going on.
So um, you know, advocacy is atthe heart of what we do as an as
(42:04):
an association organization, butalso there are very unique
things that relate to dealingwith the DOW, the Department of
War now, uh, and regulations, etcetera.
If you serve on a base or youserve a veterans community, that
we have unparalleled umexperience with.
And that, you know, if somebodywalks in and says, hey, I need
(42:27):
to apply for my VA home loan,and you're not in a traditional
strong military veterans area,you don't know how to do that.
With us, you know, we weactually built out an entire
series of pamphlets oreducational documents, you know,
for veterans and for active dutyand also for the credit union
(42:48):
teams for them to be, how do youdeal with the military?
How do you deal with the factthat, okay, I just got called up
to active duty and that changesyour status in terms of
sometimes direct deposit orinsurance and things like that?
Or, you know, hey, I'm having anissue with uh somebody trying to
come on to base, we have theexclusive agreement.
(43:09):
How do we we have the ability tobring in decades upon decades of
experience in leadership um tonot only defense credit unions,
but every credit union on how tonavigate everything over at the
DOW moving forward.
And when you tag that withaggressive, nimble advocacy at
(43:31):
the federal and state level, onboth Capitol Hill and the halls
of our regulators, the return oninvestment uh for a credit union
leader is unparalleled.
SPEAKER_01 (43:45):
Before we go, think hard about how you can help
support this podcast so we cando more interviews with more
thoughtful leaders in the creditunion world.
What we're trying to figure outhere in these podcasts is what's
next for credit unions.
What can they do to really,really, really make a difference
in the financial scene?
Can't all be megabanks, can it?
(44:07):
It's my hope it won't all bemegabanks.
It'll always be a place forcredit unions.
That's what we're discussinghere.
So figure out how you can help.
Get in touch with me.
This is RJ McGarvey atgmail.com, Robert McGarvey
again, and that's rjmeggarvey atgmail.com.
Get in touch, we'll figure out away that you can help.
We need your support, we wantyour support, we thank you for
(44:30):
your support.
The CU2.0 podcast.
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