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

Federal Reserve Board announces pricing, effective January 1, 2026

  December 04, 2025 Federal Reserve Board announces pricing, effective January 1, 2026, for payment services the Federal Reserve Banks provide to banks and credit unions For release at 5:00 p.m. EST Share The Federal Reserve Board on Thursday announced pricing, effective January 1, 2026, for payment services the Federal Reserve Banks provide to banks and credit unions, such as the clearing of checks, automated clearing house (ACH) transactions, instant payments, and wholesale payment and settlement services. By law, the Federal Reserve must establish fees to recover the costs, including imputed costs, of providing payment services over the long run. The Federal Reserve expects to recover 108 percent of actual and imputed expenses in 2026, including the return on equity that would have been earned if a private-sector firm provided the services. Overall, price changes for 2026 will result in an estimated 0.9 percent average price increase for established, mature services. The entire ...
Post a Comment
Read Complete Article HERE>»

Credit Union Profits Climb 21% As Margins Widen, NCUA Reports

  If you don't read anything else, read this:  Performance By Asset Category WASHINGTON—Federally insured credit unions posted a sharp rebound in profitability through the third quarter of 2025, with net income up 21% year over year to an annualized $19.1 billion, according to new NCUA data. The increase—one of the strongest gains across the agency’s quarterly metrics—came as institutions benefited from rising interest income, wider net interest margins, and relatively stable credit costs. The NCUA reported that Q3 data show interest income climbed 7.6% over the period while the systemwide net interest margin expanded nearly 13%, helping credit unions absorb higher operating expenses and modest increases in loan-loss provisioning. The earnings surge outpaced the credit union system’s 3.7% asset growth and came amid a mixed lending environment in which residential mortgage balances rose sharply, but auto lending weakened. The industry’s aggregate net worth ratio also im...
Post a Comment
Read Complete Article HERE>»

Housing Forecast 2026: Mortgage Rates Remain Above 6%, but Affordability Improves Modestly

  Mortgage rates will continue to average above 6% next year, but affordability will improve modestly as the typical monthly payment falls below 30% of a household's income for the first time since 2022, the  Realtor.com®  economic research team predicts in its  2026 housing forecast . The forecast predicts  mortgage rates  will average 6.3% across 2026, a slight improvement from the 6.6% full-year average expected for 2025, but still well above the 4% historic average recorded from 2013 to 2019. Nationally, home prices will continue to grow 2.2% through the end of next year, after rising by 2% in 2025, the forecast indicates. However,  incomes  and overall inflation are expected to continue rising faster than growth in home prices, delivering a slight boost to affordability. Read the complete story and review graphs;  HERE    _______________________________________ Join/Upgrade Check out some of NCOFCU's additional features: First ...
Post a Comment
Read Complete Article HERE>»

New Podcast Series -3 Succession Planning Podcasts

https://www.ncofcu.org/podcast 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>»

Sunday Reading - What happened at Pearl Harbor?

    What happened at Pearl Harbor? On Dec. 7, 1941, Japan launched a surprise attack on the American naval base at Pearl Harbor, Hawaii ( watch visualization ). The strike marked the culmination of a decade of rising tensions as Japan expanded its empire   across East Asia and the Pacific. With its industrial capacity unable to match the United States in a long-term war, Japanese leaders opted for a preemptive blow designed to cripple American naval power.   The attack—which permanently sank three American ships, damaged 15 more, and killed 2,403 Americans—was a tactical success but a strategic failure. Japanese forces did not hit the base’s oil reserves, submarine facilities, or repair yards, all of which proved crucial in the months that followed. The US Navy ultimately refloated all but three damaged ships, returning many to combat . Pearl Harbor was the deadliest attack on US ...
Post a Comment
Read Complete Article HERE>»

Loan Growth Part 3

MADISON, Wis.–Credit union loan balances rose 1.1% in February, faster than the 0.2% reported in February 2021, even as membership growth slowed significantly during the first two months of 2022, according to data released as part of CUNA Mutual’s April Trends Report. The Report, which is based on data through February, showed overall loan growth was 9.6% during the last 12 months. What is actually happening below the surface? According to the Trends Report, consistent with the trend line the analysis shows large credit unions reported significantly faster loan growth in 2021 as compared to smaller credit unions. Credit unions with assets greater than $1 billion reported loan growth of 8.4% compared to credit unions with assets less than $20 million, reporting loan growth of 0.9%. Here's a look at how credit unions performed by category, according to the newest Trends Report” ...
Post a Comment
Read Complete Article HERE>»

Not Your Mother’s Credit Union

“Stablecoins aren’t a speculative play. They’re the next evolution of payments — and a chance for credit unions to lead, not lag. It starts with connecting members to DLT rails - the digital wallet. Without that, nothing else can happen. It’s just a new payment rail - embrace it or lose the relationship. It’s that simple.” While ‘ stablecoins ’ were the prevailing buzzword across Money20/20 this year, the credit union industry had a significant presence. Small financial institutions have staked a place in the future of payments. Credit unions  received a significant boost this summer with the enactment of the stablecoin bill into law. The Guiding and Establishing National Innovation for U.S. Stablecoins Act authorizes subsidiaries of federally insured credit unions, such as credit union service organizations, to become issuers. Not Your Mother’s Credit Union A Money20/20  fireside chat  with the regulator for credit unions that I moderated focused on the rulemaking task a...
Post a Comment
Read Complete Article HERE>»

Fed’s Powell: Strong hiring could force further rate hikes

By CHRISTOPHER RUGABER WASHINGTON (AP) — Federal Reserve Chair Jerome Powell said Tuesday that if the U.S. job market further strengthens in the coming months or inflation readings accelerate, the Fed might have to raise its benchmark interest rate higher than it now projects. Powell’s remarks followed the government’s blockbuster report last week that employers added 517,000 jobs in January , nearly double December’s gain. The unemployment rate fell to its lowest level in 53 years, 3.4%. “The reality is if we continue to get strong labor market reports or higher inflation reports, it might be the case that we have to raise rates more” than is now expected, Powell said in remarks to the Economic Club of Washington. Though price pressures are easing and Powell said he envisions a “significant” decline in inflation this year, he cautioned that so far the central bank is seeing only “the very early stages of disinflation. It has a long way to go.” Even as the Fed has raised r...
Post a Comment
Read Complete Article HERE>»

Banking During and After COVID-19

Before COVID-19, the banking industry was experiencing an unprecedented period of growth and prosperity. Despite increasing consumer expectations and increased competition from non-traditional financial institutions, most banks and credit unions were stronger than at any period since the financial crisis of 2008. In a matter of only a few weeks, the world of banking has experienced a level of disruption that will change everything that had been the norm in financial services. There has not only been a major change in the way financial institutions conduct business but in the way, employees do their work and the way consumers manage their finances. Banks and credit unions must use this time of disruption to consider reinventing themselves from the inside out. It is a time when we need to better understand the way consumers expect their financial institution to support their financial needs. This includes the way banks and credit unions use data, AI, technology and human resources t...
Post a Comment
Read Complete Article HERE>»

Two Members of FOMC Indicate December Rate Cut Not a Sure Thing

  WASHINGTON–Two members of the Fed’s Open Market Committee have indicated they are in no hurry to further cut rates, despite market expectations. “I’m not decided going into the December meeting” and “my threshold for cutting is a little bit higher than it was at the last two meetings,” Federal Reserve Bank of Chicago President Austan Goolsbee said in a Yahoo Finance interview. “I am nervous about the inflation side of the ledger, where you’ve seen inflation above the target for four and a half years, and it’s trending the wrong way.” Goolsbee was interviewed after last week’s Federal Open Market Committee meeting that saw policymakers cut their interest rate target by a quarter percentage point, to between 3.75% and 4%, as officials sought to offset rising risks to the job market while still keeping interest rates in a position where they’ll help lower inflation pressures, noted Yahoo Finance. As the report also noted, Fed Chair Jerome Powell cautioned last week that “a further r...
Post a Comment
Read Complete Article HERE>»