February 4, 2026
by Scott Butterfield
I’ve been doing a lot of thinking lately about the credit union industry’s trajectory. We all see the data: membership growth increasingly concentrated among the largest credit unions, consolidation accelerating, smaller institutions struggling to stay relevant. It’s easy to look at these trends and conclude that for many credit unions particularly those serving $50-300 million in assets that the story is already written.
But what if it’s not?
I recently went down a research rabbit hole exploring industries that were declared dead or dying, only to come roaring back to life. What I discovered offers some surprisingly relevant lessons for credit unions facing maturity or decline.
The industry that refused to die. Consider vinyl records. By 2006, the format had hit rock bottom with fewer than one million units sold in the entire United States, representing just 0.2% of music revenue. The industry was effectively dead. CDs had won. Digital was taking over. Case closed.
Except that starting in 2007, something remarkable happened. Vinyl sales began growing. And they haven’t stopped. For 18 consecutive years, sales have increased annually. By 2024, 43.6 million vinyl records were sold. The format surpassed CD sales in 2022 for the first time since 1987, and vinyl revenue hit $1.2 billion. Or take LEGO. By 2003, the iconic toy company was on the brink of bankruptcy. Sales plummeted 30% year-over-year. The company had $800 million in debt, losing over $1 million daily. Operating margins had collapsed from 18-19% to just 2.4%. Analysts considered LEGO a relic in the age of video games. Fast forward to 2014: LEGO became the world’s largest toy maker, with sales growing 900% over the decade. They didn’t just survive, they dominated.
What made the difference?
As I studied these turnarounds, I kept seeing the same patterns emerge. And I couldn’t help but think about the credit unions we work with, the ones fighting to stay relevant, trying to compete with megabanks on features and technology, spreading themselves thin trying to be everything to everyone.
Here’s what the successful comebacks had in common:
1. They returned to their core identity
LEGO stopped chasing every new trend and refocused on what made them special: creative play with interlocking bricks. They eliminated unprofitable ventures, theme parks, clothing lines, video games, and poured resources into their core product.
Vinyl succeeded precisely because it didn’t try to compete with digital streaming on convenience. Instead, it leaned into what made it different: the tactile experience, the album art, the ritual of playing a record.
How many of us are trying to compete with Chase or Bank of America on mobile app features? How many are offering products that provide little value to members and drain resources? When was the last time you asked, “What makes us genuinely different?”
We still hear credit unions tout a “cradle-to-grave” value proposition. But if you don’t have the scale to deliver superior products across that entire lifecycle, you’re just spreading yourself too thin. The most successful credit unions we work with have clarity about who they serve and what makes them uniquely valuable to those members.
2. They found new value in what others considered weaknesses
Vinyl records became collectibles instead of mass-market products. What the industry lost in volume, it gained in value. Generation Z kids who grew up entirely digital embraced vinyl because of “digital fatigue.” They wanted something authentic, tangible, real.
LEGO embraced technology strategically (movies, video games) without abandoning their physical product. They made digital experiences enhance rather than replace the brick experience.
Your “smallness” might be your greatest asset. Your inability to match big bank digital offerings might force you to excel at relationships in ways they never can. The working-class ALICE households (Asset Limited, Income Constrained, Employed) that big banks ignore? They’re looking for exactly what you can offer if you’ll commit to serving them well.
3. They built communities, not just customer bases
Record Store Day (launched in 2008) created cultural events around vinyl collecting. Independent record stores became gathering places where people spent “meaningful, offline time together.”
LEGO rebuilt connections with their core fans, both kids and adult collectors. They listened, engaged, and created products their community wanted.
People join credit unions; they just open accounts at banks. But are we acting like that distinction matters? The credit unions seeing the strongest growth aren’t the ones with the flashiest apps—they’re the ones that have clarity about their purpose and build genuine community around it.
4. They said “no” to distractions
This might be the hardest lesson. LEGO nearly died from too much innovation, not too little. They were launching products left and right, but lost control of their operational efficiency and brand identity.
Their turnaround required brutal focus: cutting unique parts by 30%, streamlining product lines, eliminating businesses that didn’t support their core mission.
What are you offering that doesn’t serve your mission? Which products exist because “credit unions are supposed to offer them” rather than because they create real value for your members? What branches, services, or initiatives are draining resources without moving you toward your strategic goals?
The path forward isn’t backwards
To be clear, I’m not suggesting credit unions should ignore technology or resist change. LEGO succeeded by embracing digital strategically. Vinyl manufacturers invested in modern pressing plants and e-commerce.
But both industries succeeded by being crystal clear about what made them different and valuable and then doubling down on that difference instead of trying to be like everyone else.
The credit union movement was built to serve people that banks wouldn’t. We exist because communities needed financial institutions that prioritized people over profit. That mission hasn’t become irrelevant, if anything, it’s more needed than ever.
Three questions for your credit union
As you head into your next strategic planning session, I’d encourage you to wrestle with these questions:
- What makes us genuinely different? Not “what do we say in our marketing,” but what would members miss if we disappeared? What can we do better than anyone else serving our market?
- Are we spreading ourselves too thin? What products, services, branches, or initiatives are we maintaining out of habit or fear rather than strategic purpose? What would happen if we stopped doing them?
- Do we have the courage to say no? To products that don’t serve our mission. To market segments that aren’t aligned with our purpose. To growth strategies that compromise what makes us special?
Our “industry” has matured with many portions of the credit union family in decline. The industries that successfully reversed decline didn’t do it by trying to be like their competitors. They did it by reconnecting with what made them unique and valuable in the first place.
Maybe it’s time we did the same.
