July 23, 2014

A.C. case study: Turning around a failing CU

July 24, 2014 – Sun Community Federal Credit Union President and CEO Dale Johnson discussed how he turned a failing credit union around by increasing investment income, reducing expenses and outsourcing services during a session Wednesday at NAFCU's Annual Conference.

When Johnson took over as CEO in 2010, the credit union was losing millions of dollars a year. Beginning in 2011, it was back in the black. He said credit unions need to make a profit so they can invest capital into the future. "If you're not increasing your capital, you're not going to stay in business," he said.

During a three-year span, Johnson implemented operational changes, outsourcing human resources, payroll and investment management. He also generated other income for his credit union by starting an identity theft program for members. The program, he said, has been successful, with 40,000 of his members paying $2 a month for the program.

He encouraged credit unions to create an action plan to improve results, get their boards to buy into the credit union's strategy and motivate employees.

Much of what Johnson said resonated well with Patrick Miller, president and CEO of CBC Federal Credit Union in Oxnard, Calif. Miller became CEO two years ago and is working through a similar overhaul of his credit union. He said his credit union can do more with outsourcing services that are typically in-house. "You have to think of your members," he said. He also liked Johnson's ID theft program and may look into something similar for his credit union.