CU Assistance Plan Helps Struggling Credit Unions 

By Bryan Laviolette
SAS Gazette Editor

Editor’s Note: The names of the credit unions in this story have been changed to protect the institutions and their employees, but the comments from credit union leaders are real.

The CEO of X Credit Union puts it bluntly: “Without the assistance of the Michigan Credit Union League Assistance Plan, we would not have been able to implement the changes that were necessary for the survival of our institution.”

MCUL & Affiliates’ CU Assistance Plan was established to help credit unions that could be facing actions, including conservatorship or merger with a larger credit union.

The credit union’s CEO shared a lengthy list of areas where MCUL & Affiliates was able to help put the credit union back on a course for success. The list includes:

  • Review policies and rework to bring them into compliance
  • Work with a compliance specialist regarding exam loan exceptions
  • Retrain lending staff on underwriting and compliance
  • Train frontline staff with MCUL assistance on cross selling and product knowledge
  • Improve staff morale and teamwork
  • Build relationships with credit union professionals who have experienced similar situations and can offer help and advice
  • Draft a merger contingency plan
  • Complete a strategic planning session
  • Attend seminars and training events

MCUL established the CU Assistance Plan to help struggling credit unions. While the assistance is available to any size credit union, most that need the help are small-asset-size credit unions. 

Steve Willis, vice president of Michigan Solutions, said the league saw a need where it could help certain struggling credit unions develop a plan with the intent of remaining independent. Willis said credit unions are welcome to contact the league to inquire about assistance, but in most cases, league representatives reach out to the credit unions because they keep track of NCUA call reports.

MCUL & Affiliates CEO David Adams said helping struggling credit unions survive is important for the movement.

“We can’t help every credit union that is facing a hardship,” Adams said. “For some, the best solution is a merger. But for many others, we have experts in a variety of areas of credit union management who can help them get on a course for success.” 

Credit Union Y is another recent CU Assistance Plan success story. The credit union’s manager said the growing list of regulations on financial institutions have made it difficult for small credit unions to survive. MCUL was able to help the credit union with the input of several expert consultants.

“We partnered with CU Assistance when we were under a net worth restoration plan,” the manager said. “They assisted us with policy review and HR review of employee files.”

She added that the league also helped with board governance issues, which she said was critical for the credit union.

The CEO of X Credit Union said protecting troubled credit unions should be a priority for the broader credit union community.

“Credit unions are competing with banks, and if the credit union industry does not band together to help each other we will have fewer credit unions lobbying for important issues,” she said. “The banking industry for years has stated that credit unions have an unfair advantage and, as the smaller credit unions are eliminated leaving only larger institutions, the banks will push that much harder to try to prove that there are no differences between the two industries and try to strip the credit unions of their (tax-exempt) status. 

“Furthermore, it is important for the survival of the smaller institutions because these credit unions often serve lower-income areas or areas that are underserved. There is a need for these institutions.”

For more information about the CU Assistance Plan, contact your league representative.