Given the merger of the two largest credit union trade associations, and the merger of the two largest credit union payment system providers, the credit union industry as a whole is changing. Whether we like it or not, and whether we can control how things change, one thing for certain is the industry will never be the same. This applies to DCUC, as well.
DCUC recently concluded an out of-cycle board planning session. Because things are changing rapidly, we felt it necessary to hold a second planning session in less than a quarter. It was clear back in October that in less than 90 days the industry would be much different. Thus, the DCUC Board scheduled an in-person meeting to discuss plausible scenarios, effective strategies, and contingency plans as we move forward.
As our industry evolves, there will always be ongoing issues such as artificial intelligence (AI), deposit management (and insurance), interest rate risk, and succession planning are always ongoing issues as our industry evolves. While the CUNA/NAFCU merger is currently being celebrated by several industry leaders who have longed for a “single voice,” the effects of the merger have yet to fully play out.
Given the diversity of our industry, I am not so sure we have grasped the significance of this brave new environment in terms of advocacy. When I was a student at the Air Command and Staff College, I read Neil Postman’s 1992 book, Technopoly: The Surrender of Culture to Technology. When discussing change, Postman wrote on page 18, “...It is neither additive nor subtractive. It is ecological.”
In other words, “One significant change generates total change. For instance, if you remove caterpillars from a given habitat, you are not left with the same environment minus caterpillars, you have a new environment, and you have reconstituted the conditions of survival; the same is true if you add caterpillars to an environment that had none.”
We believe effective and relevant advocacy is an immediate and growing concern in the new era. This will be important because there are already strong headwinds that have emerged in the weeks following the merger. The continuing fallout from a recent CNN report regarding the industry’s largest credit union will consume an enormous amount of political capital and risk the industry’s credibility by defending this credit union.
In the near future, our industry will require a strong reputation to tackle larger issues such as credit union taxation, the Credit Card Competition Act (CCCA), and the Community Reinvestment Act. Going into the 2024 political season, we can also expect industry opponents to seize the advantage by putting out headlines and stories, questioning the credit union industry’s credibility and candor.
Thus, whatever this new environment means for the rest of the industry is something DCUC is gearing up to tackle in the immediate future. Balancing the needs of small, community-based credit unions vs. larger regional credit unions will be foremost in our efforts. I am proud the DCUC Board is similarly balanced.
Looking inward, DCUC has growing concerns about the relationship between the DoD and the financial services sector (both banks and credit unions). Over the last six years, we have seen an erosion in support for the free, public-private partnerships that have existed between the Department and military financial institutions since the end of World War II.
Most of this can be attributed to the growing dysfunction in the overall DoD Banking Program as people retire or leave federal service. Years of experience are not being replaced. As a result, DoD no longer has the knowledge base or manpower to fully execute this critical program as it was originally designed.
Worse, DoD has shown it cannot run banking operations without help from banks and credit unions. Awarding a controversial overseas bank contract without ensuring basic deposit insurance is the clearest reason why DoD should do its best to stay out of the financial sector. The resulting dysfunction adversely affects our military operations and personnel.
Toward that end, DCUC will be working with Congress in drafting and passing the “Military Banking Program Improvement Act” to maintain a credible base of knowledge in support of our military’s financial readiness. We will also be hiring an executive-level advocacy expert to bolster our efforts and secure more advocacy wins for credit unions and the communities they serve. Additionally, DCUC will be revamping our Military Advocacy Committee (MAC) and grassroots campaign in the coming months.
These are among some of the changes approved in our most recent Board planning session. We will share more in the weeks to come, especially at our upcoming Defense Matters advocacy session on March 3 ahead of the GAC.
I am very excited about our future and am grateful for all your support! Thank you for continuing to serve those who serve our country! Your efforts do not go unseen, and we’re proud to continue championing this shared winning strategy for you and your members!