Are all credit union members equal?

Sometimes, during in-depth business planning conversations the question, “are all members equal” arises. It’s a tricky question, and it almost always creates serious debate. For some credit union leaders, the obvious answer is yes, but for others, the answer is “it depends.”

Yes, all members are equal

Credit unions are not-for-profit financial cooperatives. The membership democratically elects directors, and each member gets one share and one vote.  

But it depends…

Opportunity and risk at the member level vary widely, so we price things differently to reflect individual opportunity and risk. Loans with higher risk are priced higher, and we pay more for deposits when the need increases. A member that opened a CD today is probably earning a little more than the member who opened a CD two years ago. Pricing in these examples are unequal, but that’s appropriate considering the risk, market conditions and the need of the credit union at the time.

Another example of what some would say equates to inequality, centers on the idea that all transactions are considered equal. Consider a credit union with a strategic focus to increase member loan sales that expects MSR/tellers to increase in branch conversations with members. Needs based sales conversations take time and that time may result in longer teller lines (becoming less and less common) or waits elsewhere.  Focused effort on one-member need may reduce time spent on other members. Is this fair? I say yes. It’s in the credit unions best interest to use opportunities to deepen member relationships and to grow loans. However, it’s possible that there will be complaints from members who wait a little longer elsewhere.

Sometimes a problem arises from the preferences of a credit union’s “vocal minority.”  Case in point, the installation of in-branch ITMs to increase efficiency and to allow more time for member-facing staff to have more sales and service-related conversations, is met with hundreds of members who complain they don’t want to use the new technology for their transactions, and that credit union’s service isn’t what it used to be. They complain that the ITM isn’t fair to “loyal” members who visit the branch all the time. They fail to understand how the move will benefit the overall membership and the credit union. We are a cooperative; the product and services offered need to be a win-win for the membership and the cooperative. Unfortunately, I’ve seen credit unions delay important (and much needed) changes to products, services, and even people because of this very vocal minority.

Why it matters

Credit unions must create value for the entire membership. Areas of focus will change over time based on the needs of the membership and the credit union. It’s human nature to resist change, whether it’s members that want to visit the branch to make deposits and have one-on-one time with their “favorite” or it’s a group of long-term members that resist a credit union name change.  Change is required of credit unions if they are to remain relevant in the long-term. Considering the competitive forces and market demands we face, when it comes down to it, I would rather staff spend more one-on-one time with people who need help solving a financial problem or advice on how to accomplish their financial goals. If this involves adding ITMs in the lobby or removing the teller line, so be it.

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