What is credit union’s most important strategic advantage?
Is it the tax exemption? Their superior volunteer and professional ledership? The democratic member-owner design? Their origins and long standing member relationships? Is it superior size and scale? The ability to buy out their for-profit competitors in private? Or, the classic non-answer, It depends?
At this summer”s Western CUNA Management School, there will be discussions of strategy and the advantages credit unions bring to market competition.
Here is one perspective, not directly about credit unions, but which would certainly align with many successful credit unions’ approaches. As you read, ask what is the prevailing narrative for credit union strategy? Does that approach fit your credit union?
From: Next City on Economic Development Models
| As journalists, we’re constantly thinking about narratives. At Next City, we’ve been grappling with the question of how narratives change, or how new ones emerge. Part of the answer is ultimately doing the work it takes to do things differently than the way they’re done in prevailing narratives.
In one prevailing narrative, economic development is about “attracting and retaining” large corporations to “create better, higher paying jobs.” Tax incentives emerge to support deals that fit the narrative. Commercial or mixed-use lots that fall into city-owned hands get placed into the hands of whichever developer can assemble the “highest and best use” business plan, meaning they can attract the highest possible paying tenants. So much of what I’ve come across over the past 10 years at Next City has been about doing economic development differently. Community power over land, worker power over business, local power over finance. All of the different models for how those basic concepts manifest have emerged from conversations on the ground about how the prevailing economic development narrative doesn’t serve their communities. Talk may be cheap, but it plays a role, too. The prevailing narrative about economic development gets reinforced through regular nationwide convenings of economic development professionals, urban planners, developers, and investors where attendees are all caught up in that same narrative. And they all play a role in implementing and entrenching it further. Last week in the Bronx, I witnessed something I’ve seen only a handful of times, though it’s becoming more frequent in recent years: More and more of the people behind these models, people who are trying to do economic development differently, are finding resources to connect and share notes across different local contexts, from coast to coast and everywhere in between. There’s even a term they’re using to start describing this network of hyper-local initiatives: “trans-local.” (one credit union CEO calls these efforts networks)There’s a lot they have to learn from each other, even if they’re operating in different legals framework and funding ecosystems. Parallels are quick to emerge, like the role of certain buildings or spaces as a sort of community organizing anchor that draws community members in to start having conversations about how they can play a role in doing things differently.
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A Case Study Illustrating the Topic of Local Economic Development vs. Transfer of Leadership?
The following are links to a current, ongoing example about two opposing credit union approaches to community economic resilience: Stay local or transfer leadership and resources to distant, out of area organization?
Many relevant financial facts and future claims are outlined in this series of blog posts about the proposed merger of the 85 year. $4.5 billion , Sacramento SAFE Credit Union with the $29 billion BECU whose main office is in Tukwila, WA, (links)
Read or listen to claims for the merger versus the facts of the two credit unions’ current financial performance. Which option would you think is in the members’ best interests? How does your decision influence your approach to strategy for your credit union?
You can post your oinion in the comment section-or use in your final year’s class project.