Oct 24 2011

Credit Union Sustainability: Costs, Consolidation, and Differentiation


“We only know two things about the future: (1) It cannot be known. (2) It will be different from what exists now and from what we expect,” said management sage Peter Drucker. What is obvious, even without a crystal ball, is that credit unions need to be lean and disciplined so that they are ready to face the certain uncertainties. We need to be sustainable.

We started this process in fall 2010 at Harvard University with a Filene colloquium called “Credit Union Sustainability: Evidence and Actions.” In March 2011, we took the discussion a step further with a second colloquium at the University of California, Berkeley, that was designed to provide more actionable steps:

  • James Wilcox, the Lowrey Professor of Financial Institutions at the Haas School of Business at the University of California, Berkeley, kicked things off with a discussion of mergers and the impact they have on credit union costs.
  • John Lass, senior vice president at CUNA Mutual Group, followed that discussion with an analysis of industry growth trends and thoughts on which levers credit unions can pull to drive ongoing financial sustainability.
  • Rashi Glazer, a UC Berkeley professor at the Haas School of Business, took the discussion of sustainability down a new path by focusing on what he described as a credit union’s only truly sustainable asset: members.
  • The presentations wrapped up with the insights of Rukmini Banerjee, vice president of operations for consumer and lending at CUNA Mutual Group. Banerjee tackled the subject of operating expenses and challenged credit unions to create process excellence in order to reduce them.

This diverse range of topics shared one end goal: A strong future for credit unions.

Report Number 251