“The IQ of credit unions now is lower than it was twenty years ago.” That comment made in a room full of credit union CEOs was met as you’d expect; with shocked silence and challenging looks. I heard from them later that they disagreed with the comment, suggesting that the IQ of credit unions is going up, not down. They claimed we’re amid a changing of the guard in the industry, and new leaders are thriving where old ones failed to embrace change.
What wasn’t clear however is that I’m not suggesting the people inside credit unions are of lower IQ—I am sure that the IQ of the individual talent is improving (consistent with their member peers living in today’s retail spaces and expectations). My challenge to my peers was that I fear and feel that the IQ of credit unions is going down.
The plummet is the result of several factors, first of which is the emergence of buyers over builders (NCUA-induced, multi-industry vendor approaches, the weakness of trades and lobbyists, etc.). Second is the unrealistic expectation that all credit unions need the same level of expertise resulting in overpriced expertise with no yield based on situational responses. Lastly is the unfortunate death by 100+ priorities—everything is a priority and a credit union cannot decide when good is good enough, so they buy what their competition buys or CYA coverage instead of building a response that gives them an advantage in the right areas.
Today’s business model operators are playing a game in which they have little control over the key success factors if they stay on this track. Credit unions used to manufacture more of their own solutions, and therefore had more power over price, adaptability, and investment curves than they do today.
Consequently, smarter people are playing a game that is organizationally less intelligently positioned. We’re less about the competitive strengths of a cooperative, more dependent on outside influences other than the member-owner, and far less intuitive about how to gain advantage. We’re much more apt to use crutches elected by insiders than the pioneers that had to craft solutions, not just play with a paint by numbers response.
This is not an indictment of individual operators, just a worry about the decline of credit unions control over their destiny based on the IQ of their organization and the perseverance of spirit displayed. Before you say, “this doesn’t apply to my credit union,” understand that I’m not painting all credit unions this way, but I do think every CU should gut check themselves against these traps.