July 28, 2014 – Two case studies presented during NAFCU’s Annual Conference Friday covered lessons from six small credit union CEOs and how they joined together to prevent merging, and FedChoice Federal Credit Union’s effective member business lending program.
Department of Labor Federal Credit Union CEO Joan Moran and 320 Market Founder Peter Barnard led Friday’s case study on the collaboration of six small credit unions. During the session, they discussed seven elements of deep collaboration, which included: shared beliefs, shared purpose, shared commitment, shared leadership, alignment, human-sized chunks of work and preparation for change.
The case study focused on a collaborative effort among Viriva Community Credit Union, Century Heritage Federal Credit Union, Destinations Credit Union, SPE Federal Credit Union, Everence Federal Credit Union and Department of Labor FCU. Each credit union took leadership for a piece of this project; implementation spanned three years. Speakers made clear that such collaboration needs more than good intentions: it takes brains, courage, hard decisions and hard work.
During a second case study exploring FedChoice FCU’s member business lending program, credit union Director of Lending Services Bill Keilholtz said an effective MBL program can increase a credit union’s income and yield.
Addressing value to members, Keilholtz said the program generated $1.2 million in interest income in 2013 and minimal expense. He also said FedChoice made $2.1 million in net income in 2013, well more than the approximately $1 million it would have made without the program.
Keilholtz also walked credit unions through what makes a sound MBL program. He sourced a recent NCUA Letter to Credit Unions and said an effective program should include adequate capital and planning, set policies and procedures and staffing with at least two years of experience.