3.8.20

Ep. 59: Credit Union Movement Growth & Trends

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Money I'm Home Podcast with special guest Dave Adams, President and CEO of Michigan Credit Union League CU Solutions Group.

Dave Adams, president and CEO of the Michigan Credit Union League and CU Solutions Group, joins us in this special episode from the 2020 CUES Future Summit. Listen today and learn about the strong state of the credit union movement and how you become a credit union member today!

 

[transcript]

00:06 Lynne Jarman-Johnson: Money I’m Home, welcome on in. I’m Lynne Jarman-Johnson, and we are taping from CUES Future Summit 2020, which is an amazing group of people that have gathered around from the Midwest to really focus in on credit unions’ membership and living a financially well life. And joining us today is a really awesome educator in the whole credit union scope. Dave Adams is the president and CEO of Michigan Credit Union League and also CU Solutions. And now, Dave, I love the fact that you’re an author, you’re a podcaster, author, at the same time, and you really have helped people realize financial dreams.

00:49 Dave Adams: Jack of all trades, master of none.

[chuckle]

00:52 DA: Yeah, I wear a lot of hats and I enjoy what I do. It’s great to be in the credit union movement working with such great people on many different levels.

01:02 LJ: So tell us a little bit about your background and how you started with credit unions.

01:06 DA: Yeah, it’s interesting, I had dinner with a group of credit union folks last night and they asked about that. Interestingly enough, right out of college in Salt Lake City, Utah, I got my finance degree and started to look for work in the early ’80s, which wasn’t an easy undertaking, and actually got my first job offer at NCR, selling business forms.

01:29 LJ: Now, NCR, for many in the credit union industry, or for anybody out in … who is a member, I think of ATMs when I think of NCR.

01:40 DA: Yeah, National Cash Register. They’ve morphed into a lot of different things, but this was a job selling business forms. But the Friday before I was to be hired, I called in and nobody knew who I was because the person who made the job offer was no longer there. So that gave me an opportunity to go back into a search mode, and I hired on with a large savings and loan as an internal auditor. I’d found that that was not … that was too left-brain, too analytical for me, but it gave me great exposure to financial services on many different levels. And I didn’t know what a credit union was, believe it or not, but I applied for a job with the Utah Credit Union League as a field consultant, where I not only learned about credit unions, but I learned about trade association work. And the rest is kind of history. I was … the rest is history. I was eight years with the Utah League, the last three as CEO, and then I went to the Washington State Credit Union League for six years as CEO, and I’ve been here in Michigan for 22 years working with Michigan credit unions.

02:37 LJ: That’s a wonderful run.

02:39 DA: It has been a great run, and the time has gone, has flown by, obviously. And I can honestly say that when I look at the different markets where credit unions serve, what’s unique about Michigan, especially that decade, its so-called “Lost Decade” where our economic conditions were so tough, 2000-2010, it was just so inspiring to see how credit unions doubled down on serving their members and the small businesses during the toughest economic times. And it was a real honor for me to be a part of that, and it continues to be really, really inspiring to see the good work that credit unions do.

03:14 LJ: You must have seen, and are continuing to see, some drastic changes in the financial landscape. Is it difficult for members to even catch up? It just seems like there’s so much change.

03:30 DA: Yeah, for consumers, I think it’s really confusing. There are so many service providers, and of course, when you look at consumers, they typically … They need access to cash, they need a way to pay for things, and they need that occasional loan for something. And there’s so many providers. And what makes credit unions stand apart, I think, is that credit unions are more caring, by far, in the way that they approach those needs. And so they do responsible lending. They’re not trying to just get you into a loan to make a profit off of you; they counsel with you and make sure that you’re able to pay, and that the loan is right for you. Credit unions are promoting thrift, and they’re giving financial education. And that’s just different from … I’m sorry, I’ll single out, whether it’s Quicken Loans or a big bank or an investment company, our not-for-profit model is really what sets us apart. And I think consumers try to wade through all that. And once they hear about a credit union, get the relationship established, and benefit from that more trusted financial services approach, they really win big over a lifetime of doing business with a credit union.

04:46 LJ: Have you found that there is a, still that thought that, “Well, I can’t join?” Back when credit unions began, you had to be a very specific select group, maybe an employer group. And do you find that still?

05:02 DA: Nationally, that’s true. The research done by our national association shows that there are a lot of people in the population who don’t understand that they’re eligible to join a credit union. Nationally, only a third of the population belong to a credit union. And so in the two-thirds that don’t, there are people who don’t understand that they’re eligible. But in Michigan, because of the success that Michigan credit unions have had serving over half the population, and the cooperative advertising we do and the promotion by credit unions themselves, our research shows that most people do understand that they can join a credit union, and we’re glad that over half of them do belong. It’s really for the rest of them. It’s cutting through the clutter to help them understand, ’cause it’s not always easy to change your banking relationship, to make people understand that it’s worth it. Because if you can save a few hundred dollars here or there, on fees or better rates, it really accumulates over time. And more important, you’re working with a trusted financial partner throughout your life.

06:07 LJ: And you do mention partner, and there is a vast difference between a partnership that you have with your financial institution versus just, “That’s where I place my money.”

06:18 DA: Right. And I think where credit unions have become more and more relevant in Michigan, because of our economic cycles, the toughest economic times caused people to be challenged with their credit scores. They lose a job, or their partner loses a job, and things happen, and life events happen. And so for credit unions, when the times get tough, that’s really when they stand out and they shine. And I always tell the story that during our toughest economic times, while our largest bank in Michigan was relocating its headquarters to Texas, our largest credit union was implementing a patronage dividend where they were giving back, at the end of the year, significant dollars, and that’s continued for them for something like 15 years. So yeah, the credit union model really, really stands out, and I think one of our challenges, competitively, is just to help people understand that it is worth it to check out a credit union, it’s worth it to go through the effort to change your banking relationship to a not-for-profit provider so that you can save money and you can benefit from that trusted service delivery.

07:32 LJ: We’re at the CUES Future Summit 2020, and you spoke earlier, and I’ve also read your articles on CUInsight. One of the things that you really talk about is the importance of learning, and how we learn together makes us all better. Talk a little bit about your passion for that.

07:50 DA: Yeah, well, one of the things that credit associations do, obviously, the key thing is advocacy. So we work with our credit union industry to rally the troops and come up with our agenda and share the message with lawmakers. But right on the heels of that is education. And education, lifelong learning is so important, regardless of what field you work in. In the credit union industry, with the competition ever-changing, with the breadth of services that are offered, it just becomes so important for credit unions and for staff at all levels, frontline staff, management staff, CEOs, board members to really get the training they need. Primarily so that the member service can be excellent, because learning and training within a credit union is mostly about making sure that you’re excellent in your service delivery.

08:51 LJ: And I think, too, that one of the things that you talk about is the fact that that truly is a differentiator for us, the service, servant leadership.

09:00 DA: It really is the differentiator. When you survey consumers, they might say, “Well, I like my credit union because I get a better loan rate,” or, “I like the fact that they don’t charge these high fees.” But the reality is, is what keeps people coming back and doing business and expanding using additional services is it’s that they trust who they’re working with. And they want to deepen that relationship. So service excellence is so important in all facets of the economy. It’s customer experience. We call it member experience, obviously, but looking at all the touchpoints at every stage, whether it’s a loan transaction, or whether it’s setting up a new account, or just helping with financial education, helping with problems that occur; member experience is what keeps people coming back.

09:56 LJ: Have you found that the empowerment of helping someone versus making someone feel like, “Oh, you’re in this financial situation and maybe it’s a mess, and that’s your fault.” And there are many financial institutions that do that, that make people feel guilty for what they’re doing.

10:16 DA: Well, yes, and so there are different types of service experiences that create negative angst with people. Sometimes, it’s … Where it’s most prevalent is when a financial institution, a credit union, in this case, has to say no, “We can’t make that loan,” or maybe it’s where we have to talk about a fee that has to be assessed because of a late payment, or whatever it is. And so those customer friction points, how they’re handled is critically important. But other areas of service have to do with competition. We all expect immediacy, and we expect digital, and we expect speed. And I think where credit unions are sometimes most challenged, as they grow, it’s to realize, and they do this very well, but this is where the challenge is: Credit unions have to keep getting better at understanding what speed and immediacy and convenience and mobility means, and why it’s important.

11:17 DA: And I think one quick example I’ve given of an experience I had that I talk about in my recent podcast. I used my credit union’s mobile app, and I was depositing a couple of checks. And I didn’t realize, with a notice that had come to me, that I now have to endorse the check for mobile deposit only. And because I didn’t know that, the deposit didn’t go through, and I didn’t understand why it didn’t go through, so I had to go visit a branch. And I think that’s … And they explained to me what I needed to do. But I use that as an example of how I hope that the credit union is realizing that if that’s happening to one or several members, that’s a moment for training the staff to communicate more effectively that policy change.

12:05 LJ: And actually seeing it in front of you, right?

12:07 DA: Right.

12:07 LJ: If you’re doing it on your app, then it should have a big, bold document that comes up and shows it to you.

12:14 DA: Right.

12:16 LJ: It’s education, education, education.

12:18 DA: That’s right.

12:19 LJ: So what’s your favorite part of your day? You must … you just do so many different things.

12:24 DA: Well, for me, I love interacting with credit union people. I love getting out of the office. I’m like everyone else; it’s easy to get stuck in the office reading and deleting emails that are never-ending, or even being in the office in meetings with my staff. But my favorite thing is really getting out and visiting credit unions, attending credit union meetings, hearing from what credit union leaders are dealing with, and learning from that.

12:54 LJ: Do you find a difference in the need for the leaders that you’re working with to have that technology upgrade, those changes that are happening so fast in Fintech?

13:12 DA: Well, I think all credit unions understand, all credit leaders understand the importance of technology and digital banking services. The challenge is that the average-sized credit union in the U.S. has $30 million in assets. In Michigan, it’s above that; it’s maybe $80 million in assets. That’s our median-sized credit union. So those credit unions might only have a dozen employees, and they have very limited resources for investing in technology. So everyone knows they need to invest in technology and be smart about how they do it, but smaller financial institutions are challenged to do that. And so one of the things that I talked about at this conference is the importance of collaboration and working together to find those solutions.

14:00 LJ: Open your eyes to a credit union.

14:02 DA: Great theme. It’s part of our cooperative advertising message in Michigan, and now nationally. And it really suggests that you should not just open your eyes to the fact that you’re eligible to join, but open your eyes to the way you can save more when you do more business with a credit union.

14:21 LJ: Well, we love to end our podcast with a personal question of note. Our podcast focuses on finance to fitness. Where did you learn maybe the most effective financial tip in your own life?

14:35 DA: Well, I give credit to my mother. I was raised, I had three older brothers, and my mother raised the four of us on her own. My father died when I was very young, three years old. And my mother taught us by example that you don’t have to necessarily make a lot of money, if you work hard and you live within your means, and avoid the pitfalls such as getting in over your head, getting in debt or not managing your spending. I think that’s the best advice anyone can give, because while we all aspire to make a lot of money and take trips and buy fancy things, the fact is two-thirds of households live paycheck-to-paycheck. And if you want to get beyond living paycheck-to-paycheck, you have to learn how to be disciplined, live within your means, work hard and save for those vacations and those luxuries that you want to have. Easier said than done. But I think it’s still the best advice. Work hard, live within your means and develop good financial habits.

15:41 LJ: Dave Adams, thank you so much, the CEO of CU Solutions and Michigan Credit Union League here at the CUES Future Summit 2020. Thank you so much for joining us today.

15:51 DA: Thanks for having me, Lynne.

15:52 LJ: Thanks for listening in Money I’m Home, from finance to fitness with Consumers’ Credit Union. We’d like to thank Jake and Aaron for the productions of our remote broadcast, and we’ll join you next week.

[music]

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