This week we are wrapping up our visit with the Minnesota Credit Union Network (MnCUN). It is always interesting to meet new people who come from institutions that range from $5 million in total assets to over $1 billion. Some large credit unions are actively involved with business lending, and they can easily employ a full time staff to manage this product. Smaller credit unions may dabble in business lending and work with CUSOs like Pactola to support them. However, there are still credit unions that insist that they are too small to do any meaningful business lending.
Often times, the biggest challenges we face is ourselves because of the limits we impose upon ourselves. I have heard from credit unions of all sizes that they cannot compete in their respective markets because they are too small, or because nobody gives them a chance. This is a perspective that feeds upon itself. If you are convinced that you cannot compete, you will not compete, so you will never have a competitive edge.
I witnessed this vicious cycle often when I was a Peace Corps volunteer. In Ukraine, many people have fatalistic attitudes. When asked about why they don’t capitalize on opportunities or try to change society, the comment often made is “why bother?” If someone never tries, nothing ever changes, which reaffirms to them that nothing ever changes. After decades of Soviet bureaucracy, it has been tough for Ukrainians to come to terms with controlling their own destiny.
I don’t mean to pick on Ukraine alone, because we all know people like that here too. I’ve witnessed that this same fatalistic tendency exists amongst many in the credit union movement. And, I’ve heard people in credit unions say that they can’t compete in with business lending whether the CU has $20 million in total assets or $1 billion. Just like the phrase, “I think, therefore I am,” people can achieve great things, or achieve very little, if they chose to limit themselves respectively.
And much like I observed in Ukraine, these credit unions believe they cannot engage new activities like business lending, so they pass on good opportunities or don’t actively seek solutions to accommodate the request. The result is they don’t engage in business lending, which reaffirms their belief they cannot engage in business lending. Do you see the cycle?
Of course, the issue is greater than simply business lending, but a problem with people selling themselves short. If CU leaders believe they can’t provide competitive services, they won’t. This might apply to business lending, online banking, insurance services, brokerage services, trust services, etc. If leadership is convinced it cannot be done, they won’t find a way to do it. Which means, they won’t do it, which proves to them it can’t be done.
Credit unions have a phenomenal cooperative spirit which banks do not have. Credit unions are skilled at leveraging each other’s resources through working together. Fatalistic attitudes are at odds with credit union movement, because it means giving up instead of working together to find an answer. In this sense, credit union managers are not only selling themselves short with fatalism, but they are selling their members short too.