We Have Been Fighting the Wrong Competitor

 Becky Reed — Featured Speaker at NCOFCU 2026

We are pleased to welcome Becky Reed as a featured speaker at the 2026 NCOFCU 25th Anniversary Annual Conference in Tucson, Arizona.

Becky brings a wealth of credit union leadership experience and a forward-thinking perspective on the challenges and opportunities facing today’s credit unions. Her engaging, practical approach will provide attendees with valuable ideas they can take back to their boards, leadership teams, and credit unions.

Join us in Tucson and hear from Becky Reed as we celebrate 25 years of education, advocacy, partnerships, and stronger credit unions serving first responders nationwide.

By Beckey Reed
Credit unions, community banks, and the future of community finance

For decades, credit unions and community banks have been encouraged to see each other as adversaries.

Some of that tension is understandable. We operate under different charters. We have different ownership structures. We are taxed differently. We compete for deposits, loans, talent, and increasingly, relevance.

And somewhere along the way, those differences became the story.

Credit unions point to their cooperative structure and tax exemption as essential to their mission. Community banks point to that same tax exemption as an unfair competitive advantage. Trade associations battle.

Lobbyists battle. Regulators draw lines between us. Legislation occasionally sends us to opposite corners. Meanwhile, something much bigger has been happening around us.

The financial system has been consolidating. Technology companies have moved into financial services. Payments have migrated outside traditional banking channels. Digital wallets are beginning to challenge the primacy of the bank account itself. Artificial intelligence is changing how financial decisions are made.

Stablecoins and tokenized money are introducing entirely new financial rails.

And some of the largest financial institutions in the world now operate at a scale neither a community bank nor a credit union could ever hope—or probably even want—to replicate.

Perhaps it is time to ask an uncomfortable question:

What if we have been fighting the wrong competitor?

We Share More Than We Admit

Strip away the charters, tax codes, regulatory definitions, and industry politics for a moment. Look instead at what community banks and credit unions actually do.

A community bank finances the restaurant whose owner knows half the people who walk through the door. It helps the dry cleaner replace a piece of equipment. It understands why a construction project that closes Main Street for six months might temporarily destroy the cash flow of an otherwise healthy business.

It lends to the entrepreneur whose financial statements do not tell the entire story because the banker knows the story behind the financial statements.

That matters.

Credit unions grew from a remarkably similar idea. People who shared some form of common bond pooled their resources so they could help one another access financial services. The institution worked because there was proximity, knowledge, trust, accountability, and shared interest.

Different structures. Similar DNA.

Both models emerged because financial relationships matter. Both models recognized something large, centralized institutions struggle to replicate: context.

The balance sheet tells you something. The credit score tells you something. The algorithm tells you something. But knowing the person, business, family, and community tells you something too.

And we may be entering an era in which that becomes extraordinarily valuable.

The Real Threat Is Not Across the Street

For much of the last century, geography shaped financial competition. The bank was on one corner. The credit union was somewhere nearby. Maybe another community bank was a few blocks away. Competition was visible.

Today, your most important competitors may never open a branch in your community. They do not need to.

They can acquire a customer through a phone. They can make a credit decision using data. They can move money through infrastructure that never touches the traditional payment systems community institutions have spent decades building around.

And they can scale those capabilities across millions of customers at extraordinary speed. That changes the strategic equation.

The existential question for locally rooted financial institutions is becoming less about whether the community bank or credit union across town gains another percentage point of market share.

It is whether locally rooted financial institutions remain relevant in the financial lives of the people and businesses they were created to serve.

That is a very different fight.

Scale Used to Require Size

This is where I believe emerging technology changes the conversation completely.

Historically, large institutions had an enormous structural advantage. They could spread technology investments across millions of customers. They could build sophisticated fraud systems. They could negotiate better vendor contracts. They could invest in infrastructure that smaller institutions simply could not afford.

Scale required size. I don't think that will remain true.

Modern infrastructure increasingly allows institutions to share scale without surrendering identity.

Cloud infrastructure already demonstrated part of this. Artificial intelligence will accelerate it. Shared data networks will accelerate it. Open APIs will accelerate it. Blockchain and distributed ledger infrastructure may accelerate it even further.

Tokenized deposits, stablecoins, digital identity, programmable payments, shared liquidity networks, digital wallets, and interoperable payment systems create the possibility of financial infrastructure that can be shared across institutions while the customer relationship remains local.

That distinction matters enormously.

Because perhaps the future isn't thousands of small institutions each trying to recreate the infrastructure of JPMorgan Chase.

Perhaps the future is thousands of independent institutions connected to infrastructure powerful enough to compete with it.

Cooperation Doesn't Require Sameness

Credit unions understand this concept instinctively. Cooperation among cooperatives is literally one of the cooperative principles.

Credit unions created shared branching networks, corporate credit unions, CUSOs, shared ATM networks, payment cooperatives, and countless other structures because they understood that independence and collaboration are not opposites.

Community banks have their own long history of correspondent banking, shared service providers, bankers' banks, industry utilities, and collaborative networks.

Both sectors have already proven the model. The mistake may be assuming collaboration has to stop at the charter line.

Imagine shared fraud intelligence across community financial institutions. Shared digital identity infrastructure. Shared AI capabilities. Shared payment orchestration. Shared blockchain infrastructure. Shared liquidity. Shared digital wallet standards. Shared access to new payment rails.

None of those things require a community bank to become a credit union. None require a credit union to abandon cooperative ownership. And none require either institution to surrender the relationship it has with its customer or member.

In fact, collaboration may be precisely what allows those identities to survive.

Infrastructure May Become the New Cooperative Advantage

I increasingly believe the next generation of financial competition will not be defined primarily by products.

Everyone has checking. Everyone has lending. Everyone has cards. Everyone has mobile banking. Products have become remarkably homogeneous.

The real differentiation will increasingly come from the networks institutions participate in, the infrastructure they can access, the speed at which they can innovate, and the communities they are capable of connecting.

That means infrastructure becomes strategy.

And it creates an interesting possibility.

What if community banks and credit unions stopped trying to individually replicate the capabilities of institutions hundreds of times their size?

What if instead we began building shared infrastructure designed specifically for locally rooted financial institutions?

Not another vendor relationship. Not another closed technology platform. Actual shared financial infrastructure.

Infrastructure that allows a $300 million institution to participate in financial capabilities that once required

$300 billion.

That could fundamentally change the economics of community finance.

We Should Still Debate Our Differences

None of this means the tax debate disappears.

Community bankers have legitimate concerns about competitive equity. Credit unions have legitimate arguments about why cooperative ownership and their tax status exist.

Those debates will continue. They should.

But we should be capable of holding two ideas simultaneously: Our institutional structures are different. Our long-term interests may increasingly be aligned.

Because the greatest danger to community finance may not be that credit unions win and community banks lose. Or that community banks win and credit unions lose.

The greatest danger may be that while we continue arguing with each other, the financial system evolves around both of us.

Maybe "Community" Is the Common Bond

There is something almost ironic about this moment.

Credit unions were built around the concept of a common bond. Community banks were built around the economics of local relationships. Technology is now making it possible to redefine both.

Community no longer has to mean geography alone. It can mean shared interests, shared economic activity, shared identity, shared purpose, or shared participation.

And perhaps that gives us a new common bond too.

We are institutions built close to the people we serve. We understand that financial decisions happen inside lives, businesses, families, and communities—not merely inside datasets.

We know that trust cannot be reduced entirely to an algorithm. And we know that when local financial institutions disappear, something important disappears with them.

The question is whether we recognize that shared interest soon enough.

Because the future of community finance may not depend on determining whether the credit union or community bank model ultimately wins.

It may depend on whether both are willing to build something together that is powerful enough to compete with what comes next.

Maybe the next great cooperative movement isn't exclusively a credit union movement.

Maybe it is a community finance movement.

And maybe we have more in common than we've been willing to admit.

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