PALM DESERT, Calif.–One credit union CEO has shared the reasons he’s so concerned with member growth—even though its growth rate is more than 6%–while also explaining why his CU has turned to old school tape drives as a data security measure.
When asked during Mitchell Stankovic’s Underground meeting what are the top three things’ organizations should have in their plans for 2027, Brett Martinez, president and CEO of $10.3-billion Redwood Credit Union in Santa Rosa, Calif., said he didn’t want to answer the question as asked, as there are so many things that deserve attention. But there are two things that are top of mind with him right now.
The first thing is member growth.
“I’m pretty freaked out about that,” Martinez told the Underground meeting hosted by Mitchell Stankovic & Associates. “I think the current 12-month number (for credit unions) is 2.62%-member growth. I’m pretty focused on engaged members, so if you take out single service members, it’s probably significantly lower…I just looked up JPMorganChase. They had a 7% increase in just active mobile users last year; Wells Fargo was 9% in checking accounts. Those are active users…and that’s just new mobile and checking account.”
Redwood Credit Union has been seeing 6.83%-member growth, but if single-account members and those who joined due to an indirect loan through CUDL, that number is about 6.15%, Martinez said.
Martinez said he is focused on member growth and has had discussions with Filene on the challenge because the market landscape has changed and there is a fundamental reason to add new members.
“I can’t help people for the rest of their lives if they’re not members,” he explained. “This has forced us to create an AI attrition model. We have very low attrition. People ask, ‘Why are you so focused on member growth when it’s so high?’ Because, what if it’s not?”
Examining the Broader Challenge
Martinez said the focus on attrition has forced Redwood Credit Union to examine its approach and the broader challenges. He said the credit union has spent millions of dollars this year that it didn’t spend in 2025 as it pursues answers.
“We’re really working with Filene, working with Origence and SavvyMoney to really work on the thing we’ve all been trying to work on forever, which is single-service, indirect members to convert them into engaged members,” Martinez explained.
Martinez told the meeting that while there is no shortage of technology available to credit unions, “at the end of the day, consumers voted and our members are going to JPMorganChase.
Giving Back, But…
That is taking place even though Redwood Credit Union has been ranked highly in its greater Bay area market for giving back philanthropically in the region. He noted the more than $5 million the credit union returned to its communities doesn’t reflect all of the members it kept away from high-cost check cashing stores and other providers.
Martinez said the second thing on his mind is artificial intelligence, beginning with the cyber risks it presents. The credit union is also using AI, like other CUs, in loan underwriting and other applications.
AI is Not a Strategy
“You can’t ignore it AI; you’ve got to figure it out,” said Martinez, who shared that one CEO had told him that at his credit union 85% of call center calls are being answered by AI. “I’m sure I agree with that.”
When it comes to AI, Martinez urged credit union leaders not to think of it as a strategy.
“AI is not a strategy; it’s how you implement your strategies,” he clarified, before adding some reassurance for all those who say, “We’re all falling behind on AI.”
“The question is are you moving forward,” Martinez told the Underground.
‘Freaked Out’
But even if moving forward, there is plenty to be concerned about, he added.
“I don’t worry about anything, but I’m freaked out. The game has changed dramatically in the last six months,” Martinez said. “There are a lot of (cybersecurity) situations that have happened in our industry that can happen to any of us. When a human couldn’t find a hole in your systems six months ago, AI can find it now. We’re spending a lot of time and energy on this. My team thinks it’s impossible for us to be infiltrated. That scares the shit out of me. I want them to be confident, but that confidence is our weakness. Every company that has been hacked has said the same thing.”
Going Old School
Martinez said he is so concerned about data security that Redwood Credit Union has returned to the old-school tape drive for its nightly back-up, and it then unplugs the drive every night.
Redwood CU, apparently, isn’t alone.
“The company we bought the tape drive from is selling out,” he said, before clarifying tape drives are not the credit union’s long-term strategy.
Rather than waiting, he said Redwood CU has been bringing in for consultations the companies it would turn to if its systems were breached and having discussions and conducting assessments now.
