Republished from chipfilson.com
Clichés are frequently based on an element of fact. But that does not mean they are the truth.
One of the most persistent clichés that drives credit union thinking is that bigger is better. That is, only credit unions with $10 million, then $100 million, or now $1 billion in assets will survive. The consequence of this assertion is that many viable, well-run and long-serving credit unions believe their only future is to merge.
The truth is the cooperative model fits all sizes but especially smaller, niche players. Locally managed, focused, relationship-based financial institutions are needed in large and small communities across America. All credit unions start small, some grow and many remain “undersized” versus the largest few. Size doesn’t determine viability. Rather, it is leadership’s understanding of its business model that creates sustainability.
Living in a small farming community
Several recent conversations about farming and the minimum amount of acres needed to make a living echoed this size fixation in credit unions.
Certainly “conventional” or industrial agricultural models dominate farming in America today. A college classmate recently lamented that the 160 acres of southern Illinois farmland his family inherited was just not financially viable. “We would have to have at least 1,000 acres to make a real profit,” he asserted.
In grades one through four, I lived on a five acre farm outside Divernon, Illinois; a town of just over 1,000 population, about 20 miles from Springfield, the state capital.