CUNA Committee: Small Credit Unions Face Daunting Challenges


Read more at the Washington Credit Union Daily

Small credit unions play a vital role in the credit union community, but they face daunting challenges that larger institutions find easier to conquer, the Credit Union National Association said in a new report, released Tuesday.

“Small credit unions have fewer resources to adequately compete in the highly regulated and high-tech financial services sector,” CUNA said, in the “State of Small Credit Unions Today,” a report from the trade group’s small credit union committee. “There are fewer dollars to invest in talent or health benefits and less scale to afford training to help fortify and further expand their membership.”

“We feel that small credit unions are vital to the credit union movement,” Tom Sakash, CUNA’s small credit union initiatives manager, told reporters in a conference call.

Small credit unions are defined as those with under $100 million in assets; the average small credit union has $18 million in assets, CUNA reported. Small credit unions have an average of seven employees, compared with 170 employees at the larger institutions. And 53% of small credit union CEOs are women, compared with 23% of larger institutions.

CUNA said that small credit unions face unique challenges, including:

  • Technology. “Small credit unions often don’t have the scale to afford newer, non-revenue-generating technology,” CUNA said. To help solve the problem, a grant program that helps small credit unions improve their technological capabilities should be explored, the report stated. In addition, educational programs that would help small credit union employees learn technology best practices would be helpful, the committee said.
  • Retirement of CEOs and managers. Many officers of small credit unions are planning to retire in the coming years; that should make succession planning a high priority for those institutions, according to the report. In addition, there is a need for credit union boards to become more involved in the management of their institutions. CUNA suggested developing a training program that raises the awareness of those issues, as well as strategies to address them.
  • Member growth. “The two significant factors that limit member growth are relevance and visibility,” CUNA said, in recommending establishment of a mentoring program in which large credit unions help smaller institutions.
  • Generating income. “Unfortunately, the COVID-19 pandemic has slowed growth and hurt income for many individuals, families, and businesses nationwide,” CUNA said. “Loan volume is down. Members are not making large purchases and are paying down debt faster than normal, both of which limit revenue.” The report recommended creating guidance for small credit unions on the underwriting of participation loans and the best practices for working with other credit unions to meet the required minimums for these types of loans. The committee also recommended the establishment of a lending institute designed to help small credit unions be successful in lending.
  • Health care. The rising cost of providing health benefits to employees is a difficult issue for small credit unions to solve on their own. The committee recommended that a task force be established to explore the possibility of addressing the rising cost of health care through advocacy.
  • Rising non-health costs, ranging from card services to core processor costs. The committee recommended the establishment of a task force that would explore how small institutions could leverage their collective scale to earn more competitive pricing. In addition, the committee recommended the creation of a database of vetted business providers that would make it easier for credit unions to find reliable vendors.


  • David Baumann

    David Baumann established and edited the Washington Credit Union Daily website before it was put on hiatus while he served as the editor of the regulatory and legislative blog at CUCollaborate. Before starting Washington Credit Union Daily, David was the Washington correspondent for the Credit Union Times. A veteran Washington reporter, he has spent his career writing and editing for many of the capital’s leading publications, including CongressDaily, National Journal magazine and Congressional Quarterly Weekly. He was part of a team that won a 2005 National Headliner Award for a special issue of National Journal on “The State of Congress.” He holds a B.A. in political science from The George Washington University and an M.A. in journalism from Indiana University.

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