By Doug Wadsworth
I received 40 responses to my small credit union survey, pretty robust for just a single week! Seventy-five percent of these were from credit unions under $100 million in assets, so I was able to really get the “small” CU perspective.
What kind of insights and conclusions do I draw from these results?
- Competitive Pressure (growing loans), followed by the Regulatory Compliance Burden were their biggest obstacles to financial growth and health.
- Nearly 30% of these small credit unions consider big credit unions alone (not banks) as their primary competitor, when it comes to growing loans and members.
- Regarding the regulatory burden, which do they consider the most expensive and time consuming? The top four (out of nine) were CECL, the Bank Secrecy Act, examiner “Over-Compliance” pressure, and examination exhaustion (too burdensome).
- What do they want most from their league or trade association? First was political advocacy for a reduced regulatory burden, followed by networking/collaboration, regulatory/legal advice or support, and training/seminars.
- In closing, although most of the small credit unions reported average or strong ROA and NW ratios, nearly 75% of them aren’t terribly confident they will still be alive and thriving 10 years from now. That’s a concern.
The Community Loses
Just last week I heard about two more small credit unions disappearing in Washington State. One of them is merging with a gigantic, out-of-state credit union (where is the common bond there)? When small hyper-local credit unions disappear, the local community and unique membership usually lose – especially those of modest means who tend to get overlooked by large institutions. Many are now estimating that most small credit unions will be extinct in 10 years.
Do we really think the tax exemption will endure after small credit unions are extinct? The vast majority of people see big credit unions as indistinguishable from banks, so the current trajectory doesn’t bode well.
Let’s Do Something
OK, small CU CEO, yes I know you are slammed and wearing 10 different hats. Not only are you bleeding members and loans because of rapidly increasing competitive pressure, handling HR, replacing computers, balancing the vault, making radio ads and fixing core processor issues, but you are often dealing with exhausting and pointless regulations, which get more burdensome, year after year.
Don’t give up. Your members are worth it, and we need to be there to make a difference for them.
Get Involved
Have you heard of my new nonprofit organization, the Endangered Small Credit Union Defense (ESCUD)? We aren’t a trade association, rather a free advocacy organization only for small CUs, fighting for our unique regulatory relief needs and encouraging “giving back” to members, in the true cooperative spirit. Consider supporting our efforts to ensure our small CU voices are heard, to actually start making headway on reducing the regulatory compliance burden.
Do They Work For You?
If you are paying dues to a local league, get involved and tell them what you need! If they aren’t delivering, find one that will (they work for you, remember)? Have they been advocating for regulatory relief for small credit unions? Are they providing helpful discounts to ensure you can afford a seat at the table, despite your small budget? Are they capping their dues on the biggest credit unions, and ensuring proportionate representation on their leadership boards, to help ensure your small CU needs aren’t ignored?
Those last two structural ones seem particularly important to me, and kudos to both the Defense Credit Union Council (DCUC) and America’s Credit Unions (ACU) for setting the example.
I am not a popular guy with many of the leagues because I am saying the “quiet part” out loud. Our members are worth it. The movement is worth it. Cooperation (not competition), remember?
Doug Wadsworth is CEO of Tri-Cities Community Credit Union in Kennewick, Wash. Doug Wadsworth is also the president of a new non-profit advocacy group exclusively for small credit unions, the Endangered Small Credit Union Defense. He can be reached at [email protected] or on LinkedIn here.
ESCUD Survey of Small Credit Unions: 1/7/2026
