‘Sooner or Later, CUs Will Need to Grapple with Straying from Roots’: CU Daily Readers Sound Off

LANHAM, Md–Some strong observations and opinions shared by the CEO of one small CU have been met by equally strong observations and opinions from CU Daily readers from throughout the credit union community on the current state of affairs in the industry, the leadership being provided by trade associations and other sensitive issues.

Joshua C. Urbick, the CEO who says he is “proudly a small CU CEO” and who leads the $29-million IBEW 26 FCU, in Lanham, Md., wrote in an op-ed on the CU Daily here that the voices of small CUs have been “growing louder,” with questions being raised as more CUs merge over how big is too big, what it’s like to lead a small CU when larger CUs define “cooperation” as merging them in, and whether small CUs’ only role is to “tug at the heart strings” when the tax exemption needs to be defended.

Do You Show Up?

Urbick challenged the overall credit unions with a number of hard questions, and asked of the CU trade associations, “To the leagues and associations that do show up for us, I applaud you. To the ones that don’t, why not?”

The op-ed has seen significant readership by CU Daily readers, and led to numerous comments in response

What People are Saying

Here’s a sampling of some of the feedback to the column:

‘Exposed a Contradiction’

You’ve exposed the industry’s central contradiction. As you wrote, ‘When the industry needs a powerful credit union story to sway legislators or tug at heartstrings, they often call on us—small credit unions.’ They borrow your authenticity while banking scale.
It’s time for the small CUs to walk off the tax-exemption advocacy playing field.

“The tax exemption is not equally valuable to all credit unions. It matters enormously to multi-billion-dollar credit unions with vast revenue streams. It matters far less to small, community-scale credit unions.

“If the tax exemption disappeared tomorrow, small credit unions would tighten belts, adjust services, keep serving members, and they would survive but just growing a bit more slowly. For the giants, the tax hit wouldn’t just pinch, it would RIP A HOLE in their business model.

“The top 10 CUs earned over $3 billion last year. At a 30% tax burden, that’s nearly $900 million in avoided taxes, while small CUs scramble to fund a $10K website update.
If the giants want to operate like banks, let them also defend their exemption like banks; or start sharing with those whose face they are to lawmakers.”

‘I Couldn’t Agree More’

‘Incredibly well-said. I couldn’t agree more with his sentiments. I wish we could rally as an industry to agree on how to address this growing divide. How about for starters, no more unsolicited merger offers from our biggest credit unions. Buy all the banks you want. But stop the buyout offers and using mergers as a strategic way to grow, especially if your business model is to put other credit unions out of business. 

“If we want or need to merge, we will reach out and let you know. And for us small credit unions, shame on us if we accept the first offer that comes our way. We owe it to our members to find the best partner if we decide it is time to consider a merger, and not just accept the first offer or the one with the biggest payout to management.”

‘Eating Our Young’

“That is definitely what is happening with small credit unions. When it’s time to tell our story in Washington you notice we are not bragging about buying banks, supporting major league sports, or ‘mergers of equals’ we are talking about small credit unions serving the underserved in communities that often would become bank deserts without them. That IS the credit union difference. 

“And then we turnaround and ‘eat our young’ as it were with more merger bait. Someone needs to do the math on this. Pretty soon, we will run out of stories to tell.”

‘Fight the Good Fight’

“The fight to save small credit unions is real! If we lose the fight, large credit unions will regret it as the argument for tax exemption will go away. Fight the good fight!”

Smaller CUs Also Have Smart Leaders

“Well said, Joshua. Large credit unions alone are not the only ones with smart, hard-working, and committed credit union professionals, working to make a difference with members and staff! 

“And that continues to be what is needed for small credit unions to grow, prosper and remain relevant in the lives of their members. Large credit unions need to find better ways to support our small CUs, especially the less than $60 million CUs—without an eye towards merger or taking over their membership.”

Pitting Large Against Small

“I agree with most of what is said in the article with the exception of this: ‘I was at a dinner recently with someone highly influential in the community banking world. They told me, in essence: ‘Our problem isn’t with small credit unions still doing the work credit unions were created to do. We’re on the same side. Our issue is with the massive credit unions (ten billion and up), who have lost their mission and strayed from the credit union ideals. Those are the ones we take issue with.’

“I 100% believe that they want to pit small CUs against large CUs to help eliminate the tax exemption. Once they get the large CUs taxed they will turn their attention the small CUs and do their best to run them out of business. We are most definitely not on the same side.”

Relentless Pursuit

I have heard of some pretty aggressive credit unions cornering folks at conferences to talk about merger. One even followed a female CEO to the bathroom and was waiting outside the stall for her! Seriously!

Powerful Message

“This is a very powerful message. I truly hope everyone who reads it looks inward with the sincerity and insight with which it is written. Bravo for speaking up.”

Questions About Size

“Very on point. This is something I think about a lot: When does a credit union cease being able to truly serve the needs of the community it was designed to serve?  At what point does the size of a credit union mean that it really is a super-regional or national entity that no longer has a distinct community that it represents?

“When is it impossible to live the credit union philosophy because an organization’s scale has made it unable to do so?

“I don’t have the answers to these questions at this point. However, sooner or later the industry is going to need to grapple with how the consolidation trend lends itself to being criticized for straying from our philosophical roots.”
Finding a True North

“…(Joshua’s ) points were direct but not offensive, powerful yet not demeaning, and well thought out. It’s so important to find true north vs profit these days. Our customers/clients are our focus. That should never change.”

Nailed It

“You hit the nail right on the head. Credit unions are helping to make the case for banks. I’d also add that when credit unions start buying banks, the difference between us further gets blurred.”

‘Unity Isn’t a Slogan’

“Thank you, Josh, for saying what many of us small credit union leaders are thinking. Unity isn’t a slogan; it’s a shared commitment to act. When those controlling the narrative reduce unity to feel-good words or one-time gestures, they miss the point. Real unity means sharing resources and delivering measurable outcomes. 

“We need more conversations like this that challenge trade groups and peers to prioritize relevance for small credit unions.”