SAN ANTONIO (9/11/13)--What keeps credit union execs up all night? Six Texas credit unions tackled that topic at the Cornerstone Credit Union League's Leadership Conference & Expo in San Antonio last week.
Compliance and tax issues, competition, an aging membership and growth, squeezed margins and emerging payment systems were among the answers from a panel facilitated by Shawn Bailey, president/CEO of Texas City, Texas-based AMOCO FCU, said the league (Leaguer
The panel included:
Lily Newfarmer, Tarrant County CU, Fort Worth;
David Frazier, Community Resource CU, Baytown;
Jackie Kapalski, CTECU, Bellaire;
Michael C. Engel, Chemcel FCU, Bishop; and
Christa Hollier, Golden Triangle FCU, Groves.
As CEO of a $306 million asset credit union, Frazier noted there isn't one thing alone that keeps him awake. His concern is about several threats coming together at once, including interest rates, compliance issues and taxation. "Having come from the banking side, I can say that it is a very different environment," he said. "Credit unions are altruistic and I really enjoy this environment. I'm concerned, however, that our philosophical values would change if we lost our tax-exemption," Frazier said.
Newfarmer agreed. "I'm really good at dealing with the things I can control, but it's the things I cannot control that cause me to lose sleep." She named squeezed margins and regulatory burdens as things she can't control. Other areas of concern included emerging payment systems that mean members are using their debit cards less, and secondary capital.
Competing with larger financial institutions in the community is a real challenge, said Kapalski. CTECU has $57 million in assets. "We're the little guy on the block," she said. "With an aging membership, we're really having to focus on how to grow our membership and attract a younger demographic."
The market is saturated with credit unions and financial institutions, which means "building relationships with our members is critical to our survival," agreed Hollier.
Competition comes from everywhere, said Engel, adding that it's important to know your market and understand where there is growth potential.
When asked if board terms should be limited, Engel noted that longevity has value.
Limits aren't necessary so long as the board member is productive and contributing to the overall growth of the credit union, said Newfarmer. "We have seasoned board members, and we have younger board members, and they all bring value to our organization."
Turnover isn't a good thing, said Frazier. "It takes a long time to develop the necessary skills, knowledge and understanding to serve on a credit union board. This is a complex businesses, so I think we need longevity on the board."
The panelists also discussed new products and services in the works, including electronic loan applications, personalized mobile apps, remote deposit capture, revamps of online loan applications. Bailey noted that "technology has to be a high priority. If you don't have your arms around technology, you are putting your credit union at a disadvantage."