Skip to main content

What’s really killing small credit unions?

by Becky Reed, BankSocial

There has been much attention given to the rapid disappearance of the small, local credit union. About a hundred reasons have been cited for this disturbing trend—from lack of succession planning to the cost of compliance. While any of those hundred reasons could be part of the problem—there is one I believe is central to a small credit union’s inability to survive: The Core

Let’s look at the advantages of being a small, local credit union:

  • Ability to provide very specific products that meet the needs of the local community
  • Small hyper-focused team that can make decisions quickly
  • Short implementation cycle due to less red-tape and structural roadblocks

A small credit union can leverage these advantages by:

  • Testing out innovative ideas
  • Changing course or pivoting rapidly
  • Implementing changes quickly

With all the advantages of being small, why do so many smaller credit unions struggle to capitalize on these key differentiators? It all comes down to technology and a small credit union’s inability to leverage modern tools due to an anything-but modern core. Most cores were created before the turn of the century with some of the more popular ones being closer to the mid-1900s. The technology landscape looked completely different in 1980 than it did forty years later in 2020. But many smaller credit unions, especially those under $75 million in assets, are still operating with a core from 1980 (or before!). So, why haven’t they switched Again, many reasons for this include long term contracts or lack of resources, but the main reason is that most of the cores out there just don’t cater to the small credit union market. So, this market has fewer choices. The result of this is that the smaller credit unions just cannot adopt newer technologies to enhance both the member and the employee experience because their core just can’t handle it! This is a travesty.

So, how do we fix this?

  • Educate small credit unions on their options
  • Use our collaborative superpower to leverage collective bargaining so that a group of credit unions can convert to a more popular core together
  • Help small credit unions tap into their key differentiator—being small and nimble

Small credit unions are the lifeblood of our industry. The credit union philosophy of people-helping-people is lived out daily in their deep connection to their community. There is help available and a whole lot of people dedicated to the survival of this key market. To learn more about how you can get involved or get help, reach out – let’s talk!

Becky Reed

Becky Reed

Becky Reed is a credit union industry veteran and thought leader with more than two decades of experience in credit unions and CUSOs. Renowned for her unique perspective as a ... Web: https://www.banksocial.io       



Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

What Gen Z Is Really Looking For In A Credit Union

  Gen Z’s faith in traditional institutions gives credit unions a rich opportunity to serve as a key source of financial guidance. Sponsored Content By Adrenaline, Inc. Credit unions can strengthen loyalty with the influential Generation Z by connecting their brand’s purpose, financial guidance, and in-branch experience. Widely described as digital natives, Gen Z meets many of their everyday banking needs with mobile apps and digital tools across multiple providers. While younger consumers certainly expect seamless digital functionality from their primary financial provider, what they value even more is meaningful advice and trusting relationships. Because beneath Gen Z’s technological savvy is a measurable confidence gap —  one that impacts every aspect of their financial lives. According to  Adrenaline’s 2026 Gen Z research  conducted with Alexander Babbage, 36% of Gen Z say they find financial matters confusing, and one in three report feeling overwhelmed by money...
Post a Comment
Read Complete Article HERE>»

IRS Rules Turn ‘Simple’ Auto Loan Tax Break Into Compliance Challenge

  PLANO, Texas— A new federal tax deduction allowing consumers to deduct interest on qualifying auto loans is being billed as a borrower benefit, but newly issued regulations from the U.S. Department of the Treasury and the Internal Revenue Service show the program will impose significant compliance and reporting obligations on credit unions and other auto lenders. That’s the assessment of Brian Turner, president and chief economist with Meridian Economics, who said the rules governing the so-called auto loan interest deduction are “far more technical” than initially described and will require system and process changes for many finance providers, including credit unions active in indirect and direct auto lending. Deduction Comes With Detailed Conditions Brian Turner Under the proposed regulations, interest is deductible only if the loan and vehicle meet strict criteria. The vehicle must weigh less than 14,000 pounds, be designed for public road use, be newly placed in service by t...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - What happened after the Civil War?

  Rebuilding the Union:  What happened after the Civil War? The Reconstruction era, lasting from 1865 to 1877, was the period when the US federal government sought to reunite the nation after the Civil War. Key issues included how to punish Confederates, readmit Southern states, and secure rights for newly freed Black Americans ( read Lincoln's original plan ). Following Abraham Lincoln's assassination days after the war's end, President Andrew Johnson—a pro-Union, pro-states' rights Southerner—pursued a lenient approach to reconciliation. He pardoned former Confederates , restored their property, and allowed Southern states to govern with little federal oversight. Those states quickly enacted laws restricting the freedoms of formerly enslaved pe...
Post a Comment
Read Complete Article HERE>»

Meet Spokane Firefighter Credit Union (SFCU) New President/CEO - Troy Clute

Meet SFCU's New President/CEO - Troy Clute  Troy Clute serves as the President and Chief Executive Officer of Spokane Firefighters Credit Union, bringing 29 years of experience in banking and finance. His career includes extensive leadership roles across the industry, with a strong foundation in consumer lending and member-focused financial services. Troy is a graduate of the renowned CUES CEO Institute Program, having earned the Certified Chief Executive (CCE) designation—one of the highest leadership credentials in the credit union movement. His leadership is defined by strategic vision, operational excellence, and a deep commitment to serving Spokane’s firefighter community and their families. Beyond his professional role, Troy values family above all. He and his wife, Karri, have been married for 36 years and share two grown children, Kellen and Kennadie, as well as three grandchildren—Tyus, Izze, and Major—who keep life joyful and full of adventure. When he’s not leading the c...
Post a Comment
Read Complete Article HERE>»

The NCUA just published its stablecoin playbook: Here’s what credit unions need to know

The National Credit Union Administration (NCUA) has begun answering a key question for credit unions since the GENIUS Act became law last July: What is the stablecoin licensing process? On February 11, 2026, the NCUA published a  22-page proposed rule , "Investments in and Licensing of Permitted Payment Stablecoins Issuers," in the Federal Register. This document outlines the framework for credit union participation under the new Act. The NCUA has a deadline of July 18, 2026, to finalize this rule. Here’s what credit unions need to know now. Quick background: The GENIUS Act and the NCUA’s role The GENIUS Act designated the NCUA as a primary federal regulator of stablecoin, alongside the FDIC, the OCC, and the Federal Reserve. Credit unions can't issue stablecoins directly; they must operate through subsidiaries, typically CUSOs, that apply for and obtain an NCUA-issued Permitted Payment Stablecoin Issuer (PPSI) license. The newly proposed rule covers the application and l...
Post a Comment
Read Complete Article HERE>»

We Don't Need More Trade Groups!

This is a op-ed reference: New National Trade Group Forms To Champion Credit Unions Under $500M Grant Sheehan, CEO, NCOFCU Let’s be clear—representation for small credit unions is not something new that suddenly needs to be invented. For more than 150 years in Europe and 115 years in the US, many of us—along with numerous trade groups representing postal workers, schools, hospitals, the military, first responders, electricians, welders, auto workers, and many other sponsor employee groups—have been actively representing and supporting small credit unions. The mission has always been the same: protect these institutions and ensure they have a voice. The real challenge facing small credit unions has never been a lack of organizations claiming to represent them. The challenge has been engagement and education. Many small credit unions operate with extremely limited resources. Their boards are made up of volunteers who already have full-time careers. Even when scholarships, training ...
Post a Comment
Read Complete Article HERE>»

Stablecoins Moving from Crypto Curiosity to Payments Infrastructure

At the 2026 Governmental Affairs Conference (GAC), credit union leaders heard a clear message: stablecoins are rapidly evolving from a niche crypto tool into a core component of modern payments infrastructure. Stablecoins are digital tokens typically pegged to a fiat currency like the U.S. dollar and backed by reserves such as cash or short-term Treasury securities. Initially used mostly inside cryptocurrency markets, they are now increasingly being viewed as a faster and more efficient way to move money globally . Why Stablecoins Matter The technology offers several potential advantages over traditional payment systems: 24/7 settlement instead of banking-hour restrictions Faster cross-border payments with fewer intermediaries Lower transaction costs compared with legacy payment rails Greater transparency and programmability in how funds move These capabilities are why banks, fintechs, and large financial institutions are beginning to explore stablecoins as part o...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - Self-driving formula cars race in the Abu Dhabi Autonomous Racing League

The league and high-speed versions of traditional cars help to showcase the capabilities of driverless vehicles and the reliability of their AI systems. Leonardo da Vinci first imagined the idea for such machines in the 16th century. ================================================= Remember, you're not alone with  NCOFCU.org Join/Upgrade Check out some of NCOFCU's additional features: First Responder Credit Union Academy Financial Literacy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

From Share Drafts to Stablecoin: Progress Is the Product

  From Share Drafts to Stablecoin: Progress Is the Product By  Jeff Rendel Expert Opinion March 09, 2026 at 08:00 AM Share & Print There was a time when the phrase "share draft" felt modern. It was progressive. It was distinct. It was proudly credit union. We didn't offer checking accounts; we offered share drafts because members owned shares in a cooperative, not deposits in a bank. It was an important distinction. It meant something philosophically and structurally. And when share drafts were introduced, they were new. Innovative. Even controversial. Somewhere along the way, however, share drafts became nostalgic. The language remained, but the behavior changed. Today, many members under 30 have never written a check. Many under 40 rarely do. Payments have migrated – steadily, predictably – from paper to plastic, from plastic to digital, from digital to embedded and real-time. This is not disruption in the dramatic sense. It is evolution. And credit unions have alwa...
Post a Comment
Read Complete Article HERE>»