Not everyone loves a challenge, but small credit unions face them every day. Small credit unions encounter more constraints than their larger CU counterparts, yet they get the opportunity to provide creative solutions that put them out on top. The limitations imposed on small credit unions have only made their solutions more targeted and innovative and allows them to connect with their members in a way that large credit unions cannot. Here are three ways small credit unions outperform larger financial institutions around them, despite the many hurdles thrown their way.
Lending to Mom-and-Pop Shops
Credit unions often receive the slew of applicants who have heard “no” more times than they can count. Large credit unions and banks might be quick to turn down local community businesses if their numbers don’t qualify them for a loan. Since they receive a high volume of applications and serve a large client base, they don’t have time to meet with members that just miss the mark. On the other hand, small credit unions are able to screen their applicants more closely. If a member is just shy of qualifying for a loan, small credit unions can meet with the member and actually get to know their financial situation and business model much better. An applicant who doesn’t look great on paper might actually be a great candidate once they’re able to share the full picture. As reported by the Washington Post, a local fitness instructor, Nick Irons, was turned down time and time again by big credit unions and local banks. Despite his years of experience and lengthy client list, Irons was assessed as a new start-up business, which led financial institutions to label his as ineligible. However, once Irons met with a local credit union he was finally approved for a loan of nearly $250,000 which helped him buy the facility and equipment he needed to grow his already successful business. Small credit unions get the opportunity to make a real difference in their community and help the local mom-and-pop shops that are denied by larger institutions.
Participate in the Community
In addition to lending to the community, small credit unions have the chance to be more participative as well. One thing small credit unions do better than large credit unions is get to know their members. A core value for many small credit unions is serving their community, and even with busy schedules, they don’t let those opportunities to connect fall through the cracks. Between regular meetings, networking events and the occasional member lunch or dinner, small credit unions get to know their members much more closely. While a large credit union might just barely be able to put a name to a face, small credit unions will be able to build closer bonds with their members, which ultimately cultivates a deeper level of trust.
Go Against the Status Quo
Just because a credit union is small doesn’t mean their goals have to be. Credit unions who plan like a bigger financial institution are able to accomplish much more than they ever thought possible. Despite constraints with balance sheets and available capital, credit unions are able to set goals at the same level as large credit unions if they plan accordingly. Small credit unions are the ones with the most room to grow, and while this won’t happen overnight - or maybe even in a year- these gains are possible over time. Big projects that might seem out of the realm of possibility now will come to fruition later as growth continues to accelerate, and resources become available to execute the project. Don’t stick to the status quo because credit unions who dream big end up with big returns.
Need an example? Look no further than Teri Robinson at what used to be Pacific Northwest Ironworkers FCU. Teri recently commented, “I announced at the Annual Meeting, that someday, we would become Ironworkers USA Credit Union.” If you don’t know Robinson, her leadership style, or her amazing staff, that dream may seem like a lofty goal. However, it's since become a reality. “We were already serving Ironworkers in five states. When I looked at our members, I could see that some of them came to the Northwest to work and then went home,” she said. “I knew with technology that we could keep serving those members.” Teri now operates her credit union under the new name, Ironworkers USA Credit Union and manages $32 million in assets.
Those with more barriers are only able to provide more creative solutions to their problems. For example, in poetry, there are a vast number of rules the writer must stick to. Between word count, the number of lines, meters, rhymes and more, there are a huge number of obstacles that makes writing a poem so difficult. That said, poetry is also one of the most creative and unique forms of writing. Similarly, small credit unions are nimble and can think outside the box and provide solutions which large credit unions simply cannot.