CEOs of CUNA, NAFCU Offer First Public Remarks Since Announcing Merger Plan; Numerous Issues Discussed

COLORADO SPRINGS, Colo.–The CEOs of CUNA and NAFCU made their first joint appearance  since the two trade groups announced plans to merge, addressing reasons for the proposed merger and what those who may oppose the merger should do, and further speaking to the concerns of smaller CUs and what will happen with conferences, as well as stressing the combination is not being driven by problems at either group.

During a 45-minute Q&A at the Defense Credit Union Council (DCUC) annual meeting, CUNA CEO Jim Nussle and NAFCU CEO Dan Berger answered questions posed by DCUC CEO Tony Hernandez, as well as from CUToday.info and members of the audience.

As CUToday.info reported here, the two trade groups are proposing to merge and create a new organization called America’s Credit Unions that will be led by Nussle—who was appearing at the DCUC meeting on the 89^th anniversary of CUNA’s creation--with Berger departing NAFCU at year-end. At one point Berger received a standing ovation from the audience.

A voting period is to begin later this month and conclude on Nov. 1. Both Nussle and Berger urged credit unions to vote in favor of the proposal.

From left, Tony Hernandez, Dan Berger and Jim Nussle

Here is a look at what was discussed, the issues covered and more:

Hernandez: What happens between now and Nov. 1? What should credit unions do to educate themselves on this?

Berger: Communication will be ongoing. Jim will be the CEO starting Jan. 1. My board has asked me to stay until the end of the year.

Nussle: We are working closely together as we go through this. I’ve had a lot of members ask, make phone calls, wanting to know what is going to happen with buildings and this and that. (Editor’s Note: NAFCU owns its Arlington, Va., headquarters building.) We’re going through a due-diligence process to make a lot of those decisions.

This is the first opportunity to make a new national trade association, depending on your perspective, since NAFCU was created or CUNA was created. We have a huge mission ahead of us. We need to create it the way credit unions do it, and that’s together. It’s up to our members.

As I think about the road ahead the things we need to think about are: 

One, the culture of our team. Many of you  have a connection with someone on the CUNA or NAFCU team and we want to keep that.

Two, as we’ve been talking about this we are also in a running gunfight of our own on interchange. Yes, we have a merger to do, but we also have to win interchange right now. We can’t wait until next year for a new organization. We are winning but we have work to do.

Three, this is your organization. I’m part of it. I get the honor to lead it. But it’s your opportunity to say more of this, less of that. We need to think about the future challenges of the next five, 10 and 20 years for credit unions. This is the time for that conversation. I am in listening and learning mode. Our boards have challenged us to go out and listen first.

Fourth, education. We need to train the future leaders of this industry to future-proof this industry. It’s not about an organization it’s about the people who make it up.

Five, cooperative networking. Our secret sauce has always been if we are in a room like this we solve problems together. We have a lot of work to do on what is the best, how to get to the next level. But we are surrounded by a great team culturally and professionally, with the right tools and temperament.

Berger: Something else I want to make clear is both boards don’t want this to be a CUNA 2.0 or NAFCU 2.0. They want this to be a new organization that is the best trade organization it can be.

The goal is to do this by early 2025 and be fully launched, although those dates are flexible. I will tell you the chair of America’s Credit Unions is our vice chairman, Brian Schools of Chartway FCU. Our treasurer, Karen Harbin (CEO of Commonwealth CU) will be treasurer of America’s Credit Unions. I will tell you that Brian and Karen are not shrinking violets. The CUNA board members are saying the same thing.

Hernandez: In the new ecosystem we’re getting into, how does the vision work with all these big issues such as interchange and fighting banks? How does that work in the complete ecosystem that includes the leagues, DCUC and others?

Nussle: The tentpoles are likely not going to change too much, because of what the value proposition for CUNA and NAFCU has been: advocacy. Relentless, measurable advocacy so we can be accountable to our members and challenge each other.

Too often trade associations have members that send in the check and they say ‘Get it done.’ CUs will send the check, but will also say, ‘What do we have to do? Leadership at the grassroots, state and national levels will be a hallmark going forward. Advocacy is big-top tent pole.

The boards have said we want one national voice. In order to have a strong voice you need to have good ears.

Part of the reason we came together is there has been a lot of consolidation (in credit unions). It means we can be a more intimate group.

NAFCU has some of the best compliance around, but CUNA has some really good platforms.

Berger: We have been talking for the last seven eight months about this. I’ve given a frank overview of our internal operations and what we do well and what they do well. This is about a new trade association that will kick butt on behalf of the industry. There will be hiccups and things to work through. It’s trust but verify, but we are working closely together. We have to make sure this is a success; there is no alternative.

Hernandez: How in this new organization with so many voices and issues do we resolve the voice of the minority and we figure out our issues going forward?

Nussle: One voice requires two ears. That’s not new. We haven’t always agreed on everything and we talked it out. My dad was a church choir director.  I believe the choir is the most beautiful sound you can have vocally. It brings in harmony, different words and lyrics. You can have men’s and women’s, higher and lower voices. It’s not Jim’s voice, it’s the entire movement’s voice singing together from the same song sheet with the same sound. It’s surround sound advocacy.

Hernandez: As members get to Nov. 1, we talk facilities, staff…

Nussle. I hope they’re not worried about that. I hope they are worried about the value proposition and creating an all-star staff.

Hernandez: But as this goes forward, will there be milestones/measurements?

Nussle: We’re still working all those out. We have a board holding our feet to the fire to have all of those things completely buttoned down. I want our members to focus on the value proposition. And don’t just ask what the association can do for you, but ask what you can do to take the association to a higher level. This is not the time in my estimation to focus on those small tactical issues, but on our strategic direction for the future.

Hernandez: DCUC has always worked well with both groups. What is your perspective? How can DCUC or defense CUs help add or magnify the voice?

Berger: Communication. Continue to talk to Jim and his team.

Nussle: (DCUC has) always been in the choir. But you’re not big enough to have the influence. We are not big enough without you to have that influence. We have to go together. We are not big enough to turn into this faction, that faction.

I would add one thing and I think it is a capability for the future we should give some serious thought. Some of our credit unions and military and defense CUs do an excellent job of communicating with members on issues that are important. Some are reluctant to do that because it can smack of politics. We have to figure that out. We have to do a better job, together, of being able to communicate on the reason for being and the challenges going on in policymaking that they can engage in and make it easy.

For that next, better trade organization, we will have to do a better job.

Hernandez: Beyond the Credit Card Competition Act, what are the next battles?

Berger. CFPB. And then the CFPB. And then a little more CFPB. I think they’ve gone well beyond their congressional intent and we need to put pressure on Congress to reel them back in a little bit. They are problematic for many of our credit unions.

Nussle: I agree. I would just add that generally speaking financial services has not been as disrupted as other industries, but it’s coming. And the unregulated financial services is another point we have to get serious about. That allows us to build partnerships with other financial services groups and regulators.

Berger: There is going to be another Black Swan event, we just don’t know what it is. I agree with the non-depository fintechs (issue). These apps need to be part of the same regulatory schematic as other institutions and we need to make sure consumers are protected. It could be commercial real estate. There are a lot of balloon payments out there in these portfolios.

When those events happen, that’s why it’s important to have one strong trade association there in Washington. When those hiccups come, (Congress) wants to know what’s happening, wants to know how credit union members are being affected in districts.

Hernandez: Any other comments?

Nussle: Please lean into this process. You are truly creating the next national trade association for credit unions. Give us your feedback. Both of us have on our websites a place to go if you have a comment. Please vote in favor of this so we can create that next great trade association.

Hernandez: What were your proudest days in the movement?

Berger: I think it’s the culture we have created at NAFCU. We have worked really hard at it. Early on as CEO I had an executive coach and he showed me my blind spots and things I needed to work on. I thought I was a pretty good communicator and I learned I had to communicate it eight or nine more times. I thought we could get the culture right in six to 12 months and he said I was smoking that hippie lettuce.

It took longer, but we got there. We talk a lot about extreme member service and I’m very proud of it. I think the culture helped many people in the industry. I’m going home to Florida on Jan 1. I look forward to it. I will be watching from afar. Jim can call me as often or as little as he likes.

(Berger was given a standing ovation by the audience following compliments from Nussle.)

Nussle: I will be calling. And I want to be very clear. CUNA and NAFCU are in their strongest positions they have ever been. Our boards did not come together because there is a problem except that we want to work together to be solving for problems.

CUToday.info: What about concerns expressed by smaller credit unions that they are going to be less of a priority or lost in this larger, merged trade association?

Nussle: They haven’t been forgotten so far. I met with our small CU committee just this last week. One of the first meetings I took was to talk about that particular issue. How do they feel? What do they need? What do they need more of? Less of?

All credit unions are a priority. I have had conversations where a lot of our larger CUs have said if it weren’t for our smaller credit unions we wouldn’t be as effective in our relations with policymakers.  Often, they have the best relationships at the local level. That’s not disrespecting anybody, that’s the bread and butter. Advocacy can’t change when it comes to that, it has to be attuned to them.

With compliance, my gosh, most of the smaller credit unions would not have been able to survive under this environment without the kinds of compliance information and education that is provided.

The (America’s Credit Unions) board was created to have a specific class to ensure the voice of smaller credit unions. Smaller credit unions have always been at the table at CUNA and at NAFCU. Of course, we’re going to have to earn this, to prove this. But I don’t think there should be concerns on the part of smaller credit unions.

Audience Member: What is the plan for conferences and events? NAFCU has some of the best conference planners.

Nussle: We have conferences contracted out for a few years here. I don’t want to make any announcements. We will figure it out. I see (NAFCU’s) Congressional Caucus as a potential benefit for us to add to GAC. But I want to let the teams come together and talk about those things. How can they be synergized?

Berger: We are contracted a lot through 2024. There is some duplication. But Jim and his team will have to make decisions on that.

Audience Member: Is there a contingency plan if this isn’t approved?

Nussle. Yes.

Audience Member: What about those of us thinking about voting no. Where should we go?

Nussle: First, come to me. Go to the boards, the transition boards, the current boards of CUNA and NAFCU. And NAFCU.org/merger and CUNA.org/merger are places to go.