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The CU2.0 Podcast
This podcast explores contemporary, critical thinking and issues impacting the nation's credit unions. What do they need to be doing to not just survive but prosper?
The CU2.0 Podcast
CU 2.0 Podcast Episode 372 Tansley Stearns and the CEO Seat
Tansley Stearns had been working in a credit union for maybe five years when a big idea grabbed her: she decided she wanted to be a CEO of a credit union.
For a young woman who had grown up on a farm in southern Michigan that was a very big idea.
Three years ago she made it happen, when she was named CEO at Community Financial Credit Union, a Plymouth MI headquartered institution.
How is she liking the job? Is sitting in the CEO seat what it’s cracked up to be?
‘In this show Stearns faces questions from two hosts, Robert McGarvey and also CU 2.0 CEO Kirk Drake.
You’ll hear what she thinks credit unions will look like a quarter century from now, what she believes the impacts of AI will be on the industry, and also what credit unions need to do more of to stay competitive.
Listen up.
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Welcome to the CU2.0
SPEAKER_00:podcast with big new ideas about credit unions and conversations about innovative technology with credit union and fintech leaders. This podcast is brought to you by Quillo, the real-time loan syndication network for credit unions, and by your host, long-time credit union and financial technology journalist, Robert McGarvey. And now, the CU2.0 podcast with Robert McGarvey.
SPEAKER_03:Tansley Stearns had been working in a credit union for maybe five years when a big idea grabbed her. She decided she wanted to become a CEO of a credit union. For a young woman who had grown up on a farm in southern Michigan, that was a very, very big idea. Three years ago, she made it happen. She was named CEO of Community Financial Credit Union, a Plymouth, Michigan, headquartered institution. Now has assets of about$1.5 billion. How is she liking the job? Is sitting in the CEO seat what it's cracked up to be? In this show, Stern faces questions from two hosts, Robert McGarvey, that's me, and also CU2.0 CEO Kirk Drake. She holds her own. You'll hear what she thinks about credit unions will look like a quarter century from now, what she believes the impacts of AI will be on the industry, also what credit unions need to do more of to stay competitive. A lot of topics get discussed. Forward thinking, extremely positive, but I think extremely positive could be tends I came across Crane said that you're redefining what leadership and finance looks like. What does that mean to you?
SPEAKER_02:From my perspective, there's a few things that are really important to our organization and leading in a financial cooperative. One of those is we must tell our story. Credit unions have been notorious for being very humble and in some ways really undervaluing marketing and storytelling. And it makes sense when you think about our origin stories. My first credit union served Macy's employees And we were headquartered in the basement of a Macy's store. And in a noisy world, doing that can be challenging. So I'm a big believer in bringing the creative internal agency together, not only for that storytelling. It also plays a role in how there is a more innovative and creative culture that develops because of that creative team being part of the organization. So that's one thing that I think is unique. The other is that I really believe in a human-first approach. While we have financial tools, We really are a movement. We are about changing people's lives and walking with them through the joyful and dark moments that all of us experience. And I think when you frame the work around those needs and start with empathy and marry that with our subject matter expertise, you do things a bit differently. very relevant for the next generation and not only sustains, thrives well into the future.
SPEAKER_03:Kirk is joining the show.
SPEAKER_02:Hi, Kirk.
SPEAKER_03:Hello. How are you doing?
SPEAKER_02:Great. How are you, friend?
SPEAKER_03:It's like five times in a week.
SPEAKER_02:I know, right? Let's do one more. I love it.
SPEAKER_03:Wait, wait, wait, wait. You guys have talked several times in the past week. That's
SPEAKER_05:right.
SPEAKER_03:This is sneaky. You know, you can't do this to me, Kirk. I mean, I'm going to get paranoid here, man. Tansley, you decided that you wanted You wanted to be a CEO of a credit union many years ago. You've been in the credit union business 25 years, but perhaps 20 years ago, you decided you wanted to be CEO. Now, on the other hand, you grew up in a farm family. How did these things come together?
SPEAKER_02:What I loved about credit unions when I stumbled into them, which is so many people's story, you know, I grew up, as you mentioned, on this farm in South Michigan, you know, right with the great news about Michigan, we can tell folks where we're from. And it's right at the bottom of the Mitten. And my family's had a farm there for 120 years. And my grandmother and my mom were both teachers. My grandmother helped us start a credit union. And they're really hardworking human beings. I Again, I think very human centric, very curious. And when I graduated from U of M, I had no idea what I wanted to do with my life. So I was looking for marketing and social work jobs because at 21, life is confusing and found this credit union. And when I started, I just thought, hey, you know, I'll do this for a little bit. And very quickly fell in love. I saw the difference that the organization was making in people's lives. You know, as I mentioned, they serve Macy's employees. And so they would be very focused on There was a payroll switch where people were being paid weekly, and that moved to monthly. The work that the credit union did to walk alongside team members that were going through that change, just one small example of how they showed up. That credit union was$150 million in assets when I was there. Their digital banking and their call center were really forward-thinking and technologically relevant, especially for 1998, because they had this service model where they were serving people across the Midwest and beyond. And so I learned a lot there and also just saw the possibility in credit unions and very quickly started talking about becoming a CEO. And my mentor, John Normandeau, who was the CEO of that credit union, his advice to me was, you know, there's a big world out there beyond credit unions. You should look at it. And I didn't think that was very good advice. So here I am.
UNKNOWN:Ha ha ha!
SPEAKER_03:That's good. Now, you've been at the Daisy Air Rifle Credit Union for three years now. I love that it's the Daisy Air Rifle. I love that the logo is a bear, Daisy the bear. This is insane, but it's lovely. Is it what you thought it would be? I mean, what surprised you about this? It's one thing to look from outside the CEO chair, say, wow, I'd like to have that chair. So you get the chair, and three years later, was it what you expected? Is it better? Is it worth?
SPEAKER_02:It is magnificent in a whole lot of ways. You know, one thing that I'm really proud of is that we've really been able to help the organization become, I think, more of what is possible. When you think about when credit unions started in the Great Depression, there was a real promise for who we can be and how we can show up for people in really difficult times. And this is a fantastic organization. We'll turn 75 next year. And we were a little sleepy. We hadn't invested in technology in a long time. The brand had some significant challenges. We needed to get our operations to be a bit stronger. We were lending without doing a lot of deposit gathering. So we're borrowing to lend and that works when money's cheap. It doesn't work in the interest rate environment that happens 90 days after I got here. And we've done so much as a team. And I think most importantly, we've been able to think about the operational tempo of the organization. And I know that I love work. I have a real passion for what we do. It's a huge part of who I am as a human being, and not everybody has that perspective. The tempo of credit unions has to accelerate. I think it's one of the things that we have to take seriously because the world is moving very quickly. Just with the issue of technology, if you're not keeping up with it, if you're not iterating on it, if you're not partnering with others to understand it, I think most importantly, listening to members to match their needs with what possible tools you might provide, we won't have a future. I often think about these things in the context of my daughter, Mackenzie, who will turn 15 in October. Just think about our frontline team members. We know now, and we're working on fixing this, we have between nine and 15 systems that they have to touch for a whole host of things that they help members with every day. And you think about being in a war for talent, If we want to attract top talent, we want to retain top talent, we want to grow that talent, I think it'd be really hard for us to recruit Mackenzie to come work here. Not that we would, of course, because she's my kiddo. And that sort of experience is really challenging. And so when you ask about, was this what I thought it would be, I think it has been in a lot of ways. And I think it's also been more rewarding and more challenging, as most things are. And what I'm excited about as you look back at three years is what we've been able to accomplish. And that gives me a lot of enthusiasm for what I know we can continue to bring to life for years to come.
SPEAKER_01:Well, it's such a hard problem because let's say you're super successful and you get it from eight or nine systems to six. It's so ridiculous.
SPEAKER_02:It's terrible. Yeah, it's terrible. No, yeah. When our kids have, you know, Mackenzie's been scrolling on devices since she was one, which makes Right. Right.
SPEAKER_03:Now, a week ago, I was interviewing a credit union CEO. His institution has assets of about$900 million, and he repeatedly referred to himself as a small credit union. What size are you?
SPEAKER_02:We are$1.5 billion in assets.
SPEAKER_03:Is that small? Is that big? I mean, I don't think$900 million is a small credit union. I
SPEAKER_02:don't think a lot about asset size. I know it's one of our favorite things to talk about as an industry, and I know a lot of credit unions, including the one I started at, that do tremendous things that sometimes large organizations don't. And there are some tremendous large organizations that are doing incredible things. What I believe is that the mindset of the organization is what really matters. Now, I will say that as a believer in the financial cooperative movement, I do think that growth matters, not only for scale. I think if you believe in credit unions, then And every new member we have that uses us more deeply allows us to do more for every member who got us here. And so I'm not somebody who thinks staying small is a requirement. And I worry about how much right now we're talking about size as a differentiator versus the things that unite us and the things we could be doing collaboratively to make all of us better.
SPEAKER_03:That leads to a question I had written down, which is, is there still a credit union movement?
SPEAKER_02:I believe there is. And I think we have so much more that unites us. And I think we've all got to lean into that. You know, what are the things that we could be doing together? You know, we've stood up several QSOs since I started and we've thought a lot about, okay, what are the things that we do well that we could do more of with other organizations? I think another real interesting way to think about collaboration is, you know, what are the things that we're not so great at that we could find a partner who does really well and how can we leverage that? And, you know, you imagine if every year you're amplifying one thing that is one of your superpowers and you are improving something that is something causing your organization pain, that can really help to accelerate the impact that you're making for members. And I think that collaboration is the way that we stay a movement. And collaboration has to be a verb. It has to be something we do versus something we talk about. It can't just be I called somebody up to ask about a policy. We're doing a lot around how we think about AI and challenging ourselves to be better there. And I think one of the ways that we will do more is to do that with other credit unions.
SPEAKER_03:What are you doing in AI? Most of the credit unions that I talk to are doing kind of experimental things they're playing.
SPEAKER_02:Yeah, I think that's a fair way to talk about it. One of the things that's most important to me as a leader is that I'm using it and challenging myself to get better at it. And we've partnered with Kirk to do that. And he's spending time with me. He's spending time with our executive team. He's spending time with our IT folks. And I think that matters because with something as... fast moving as AI and something that I think for many of us sort of breaks our brains. You can't just read about it. I think you have to use it. And every time I do that, it sparks another idea. And so I think for our organization, that leadership modeling is really, really important. We do think that there are some solutions in terms of our frontline team and getting them to answers more quickly. I think that's another pain point for the I get there and ask frontline team members about the challenges, one of the top things they say is the intranet. And having a single source of truth and a fast set of answers when you've got a member in front of you that's frustrated and you don't know it. And I think that's a table stakes item that we can improve.
SPEAKER_01:We've only been working on that for like 92 years, right?
SPEAKER_02:I know, yeah. And maybe now we can fix it, right? Yes.
SPEAKER_01:Yeah, I mean, I think the AI stuff, they're doing some very cool stuff So they've got a cool project we're working on with some other credit unions. We're calling it the rep generator, right? So how do we remove the bottleneck of generating Scimitar rep gens using AI? We've got one that we're talking around on core deposit analysis and growth, one on member growth and understanding that. And then they've got some really great ones on that knowledge transfer intranet piece, but they're definitely... group is definitely very open and willing to kind of go down and explore things and I don't know that there's any preconceived notion yet compared to many other credit unions I look at where they go okay we bought Copilot we're done right and like usually about three six months later like that didn't really accomplish much of anything right like and so I applaud them for diving in on that and you know there's a combination of tackling old problems but also tackling new things that we haven't done before where the the table stakes are lower because you don't have to be very good at it. You just have to be better than you were before, which wasn't good.
SPEAKER_03:Right. When you took over the credit union, How many of the people on the executive team that were there then are still there?
SPEAKER_02:About half. I'm really proud of our executive team. Our chief people officer, Kathy Myers, has been with us for over 40 years. She started in one of our student-run branches. It's an awesome story of growth in the organization. She has a great context for who we've been and also real visionary ideas about how we can continue to grow into who we wish to be. And we've got some new folks. Ashley Bettacletti just joined us less than 90 days ago. And what I love is that the diversity on our executive team is beyond the things that you might just see. It is that diversity of experience, some having been here for more than 40 years, some having just started, experience beyond credit unions. And having a group of people that bring such different viewpoint and expectations that share values is really powerful and it's been a lot of fun.
SPEAKER_03:When you go to credit union meetings, how many CEOs of credit unions that are over a billion dollars are in your age group and gender? I don't know. The gender one is easy to answer. That's about 20%. Exactly.
SPEAKER_02:I don't know about age. I'm a terrible judge of age. I led HR, so that's the only answer to that question. And what I do think is really interesting is... talent and credit union leadership is the lid in any organization. And specifically when we talk about credit unions and how we attract and retain that talent is challenging because there are some constraints within credit unions that are different than other organizations. And there's some great things about that. And I think to your question about talent, one of the things I'm really proud of about community financial is we've really tried to stretch our thinking about the future You know, I, before I came here was working at a credit union in Colorado and attracting talent to move to Colorado is really easy. Attracting it to move to Michigan, despite how much I love it is not so easy. And so we do hiring from across the country. We also really think about, you know, fractional work and the way that we can bring in people like George Hoffheimer to have a portion of his time is super valuable. And he can continue to serve other credit unions outside of the state of Michigan. And he has benefits with us as a team member. And that is really exceptional. And we wouldn't be able to hire George probably as a full-time team member. And the gift of the hours we get from him is fantastic. The person that leads events for us, Beth Schnaubel lives in Wisconsin. When I got here, I have to tell you, my way of wanting to work is to come into the office every day. I'm really traditional. I love being here. I like to get here early. I stay late. I like to be in person. That's not the way the future of work is going to be built. And I've challenged myself and challenged a team in every situation where we've thought about, gosh, well, this person's not going to want to do things. in a traditional way, how might we think about that differently? And it's allowed us to really build a team that we wouldn't have if we weren't ensuring that we are more flexible than we might have been 10 or 20 years ago.
SPEAKER_03:The website, is that under your leadership?
UNKNOWN:Yeah.
SPEAKER_02:Yes, we just updated it. It's probably not even been 60 days.
SPEAKER_03:I look at a lot of credit union websites. Most of them suck, including the credit union I use. The website hasn't changed in 15 years, I don't think. It's static. Whereas I looked at this one, I said, man, I've never seen one like this. This is kind of cool. It's weirder than the traditional credit union one, but that also is visually engaging. Salaam.
SPEAKER_05:The team's got a great job.
SPEAKER_01:Tansley's part of the CEO club that's in their 30s, right? So there aren't
SPEAKER_02:a lot of those.
SPEAKER_01:Oh, if only. Oh, okay. I didn't know that. That's why it was a tough question for her to answer.
SPEAKER_03:Yeah, there aren't too many CEOs in their 30s. Not really. Usually they're at$100 million credit unions.
SPEAKER_01:Right. I will say there was a moment in the Painted Hills QSO where I think Matt Stevenson, Mark Zook, and Joe Arnold and I were sitting around the table and we were about to go through the formation piece and we looked around the table and all of us were in our, Zook's old, so he's in his late 50s or something. And the rest of us were in our mid 40s and we're like, wait, when did we become the gray hair, right? So it is an interesting dynamic that occurs where suddenly the way you led and the things you did in your 30s and 40s or early 40s begins to change and you start realizing you're the institution knowledge, the industry knowledge. You've seen cycles of things that no one else has seen. And that makes you uniquely valuable and qualified on how you think about problems going forward.
SPEAKER_02:And it makes me broken, right? You know, I think it's really important for those of us who dedicate our lives to credit unions or any industry to be listening a lot more because as much as I value innovation, then I do challenge myself to improve every single day. You know, I have tons of biases because I've worked at a financial institution my whole career and our ability to listen to members and non-members and understand their biggest problems is one of the most important things we do every day.
SPEAKER_03:Why do you have a podcast?
SPEAKER_02:A couple of reasons. One, storytelling. We think it's really important to think about different ways that we elevate the organization and our leaders across the organization. The reason we started Despite Impossible was when I got here, I was talking about doing impossible things. I'm a big fan of Alice in Wonderland, and I've been talking to my daughter, Mackenzie, about the impossible things that she does every day since she was tiny. And I think it's an important question because it invites you to think really differently. And I had a team member say to me one day, you know, Tansley, you keep talking about doing impossible things. And I just want you to know that means that you can't do them. So you should probably stop saying. And I said, thank you. And I think that my leadership is the lid. And if I'm speaking hyperbolically, it's very purposeful so that we can dream more boldly. And And what's been fun about Despite Impossible is that we really invite guests that are dreamers and also doers. And that's a unique combination. You find a lot of people that are really great executors. There's a smaller group of people that dream. The combination of the two is really unique. And I think sharing that story helps people to see things that they might not have and also challenge them to make sure that the things they dream about, they actually do.
SPEAKER_03:What will credit unions look like in 2050, a quarter century from now? And most of the CEOs, if I would ask them that question, they'd say, I don't know. I'll be long retired. I'll be playing golf. You're not in that
SPEAKER_04:position.
UNKNOWN:I'll play golf.
SPEAKER_03:No, good for you. Golf to me is, well, I can't imagine playing golf. But what are credit unions going to look like in 25 years?
SPEAKER_02:I hope that what the movement looks like is a much more growth-oriented industry. I was recently traveling for a credit union conference and when I landed, hopped in the Uber, chatted with the Uber driver who asked me what I was doing there and I said I was had to do a credit union conference and he asked what and I said a credit union conference and he said what's a credit union and you know across the country right we've got less than nine percent of the market share you know certainly better in some states than others some regions and others and man if you believe in this movement if you believe that the financial cooperative movement and model is the best one for Americans which I do then we should be much bigger. And there's a lot we have to do to get there. One, we got to tell our story. We can't have people not know who we are. And we can't keep saying that it's good for us to be a best kept secret. You know, I've read some things recently where people are saying, well, you know, it's actually better if people don't really know who we are. I have to argue against that vehemently. It is not better. We've also got to...
SPEAKER_03:That's totally crazy to say that. The only people who say that are people who know they're failing. It's better that they don't know who we are. I mean, that's not a business position.
SPEAKER_02:Yeah, except there is some Something about, I think, our history and this idea of humility that I think for some people creates a framework to believe that that's true. And I just think we have to challenge it. And the other thing I would say is, you know, we stood up a QSO called Backbone, which is really about the storytelling. We've now got 24 organizations that are standing together in this. And, you know, some people, when I talk to them about Backbone, will say, well, you know, Tansley, isn't that America's Credit Union's job? Isn't that the league and association? It's really not our job to come together to tell the story of credit unions. And I think it is. I think it's our job. It's my job at Community Financial. It's our job collectively and collaboratively from a grassroots effort. It is America's credit unions job. It's the league and associations job. And two things can be true at once. And in fact, it's better if the associations and the leagues are telling our story and we are telling our story. And if reporters talk to both of those organizations, awesome. That is awesome. Great, because I'll tell you, the ABA is telling our story and it's not the story we want Americans to hear. So I think storytelling is a big part of it. I also think it is about relevance, you know, and that is not just technology. I think it's experience. I think it's product line. I think it's a commitment to strategy. You know, strategy can't be something that we do in August or September and then create a 500 page binder that nobody read. and say that we did it so we can show it to the examiners.
SPEAKER_01:Strategy is just buying different tech systems that immediately solve the problem.
SPEAKER_05:Yeah.
SPEAKER_01:It feels like that in a lot of credit unions, right? Like, oh, we've set our budget strategy. So we're buying these four new software packages that we will never implement more than 20% of, right?
SPEAKER_05:And
SPEAKER_01:we'll never optimize it. By the time we're done implementing, we're so exhausted. We never want to think about that problem again, but we check the box.
SPEAKER_02:Well, and what I love about our board, you know, they, created our ends, which is just their way of talking about vision. And it's bold, it's inspiring, and it is thinking about impact in a much bolder way. And it's thrilling to think about strategy in that way. And then these horizons, right? You've got this horizon right now for us. We're landing the plane on a three-year strategy. We've got to execute that. We've got goals to meet in 2025. And we've got to be thinking about, okay, as we lift off into 2026, Over the next 10 years, what are some of the things that we really want to reach to? And then what does that look like? And I think that ability to think with horizons in mind is a critical part of how organizations can both think. think boldly enough and get to execution. Both things are true.
SPEAKER_01:Yeah. One of the things I love about how you did the strategy too, is that, you know, it kind of starts with this kind of, it needs to fit on a napkin, right? And then as you expand the napkin, it gets into much more depth, but both visually and communication style wise, I think people often, I mean, a lot of times when I look at a credit union strategy or certainly the credit unions that I worked at, the strategy was, you know, a three worksheet spreadsheet with 8,000 project items that you're going to check the box, which is not inspiring at all. It's mostly overwhelming. It's hard to actually execute on and doesn't get to that broader vision purpose. And, you know, it certainly doesn't... Great, we checked off 82% of that. Do we feel good that we... Did it actually do anything? I don't know, right? Versus, you know, the feeling at CFCU and when you talk to people and the energy and the things that you guys are trying, it may not be tactically as linear, right? But it definitely feels like it's changing something and there's momentum and other things in there. And to me, that's much harder to accomplish at running an organization.
SPEAKER_02:Yeah. Yeah. And that seems so silly and small, right? And again, it's one of those things that people roll their eyes at me about. And I think it's so powerful. If you were to talk to anybody here, including frontline folks, they understand what our purpose is They understand what we're up to. From that napkin strategy, every six to eight weeks, we do something called purpose and pace, which is, okay, what are we all going to accomplish? Not just the IT team. What's everybody going to accomplish in the next six to eight weeks? How does that connect back? Being able to connect the dots for everybody across the organization about strategy, I think, is the key to that momentum.
SPEAKER_01:It's one of those goofy things. I must talk to four or five hundred credit unions a year, right? I can think of two that I have a pretty good idea of their strategy. Like you guys are one, Rogue's probably the other. Rogue, it's because I'm personally invested locally and all my accounts are there. Otherwise, even though I know credit unions inside and out, I don't really know very many other strategies, right? So it has to me, even seeing that, I think I had that napkin strategy in my backpack for probably three months. So it just like keeps coming out and I'd read it. There's power to that.
SPEAKER_02:I love being able to carry it. It's just great.
SPEAKER_03:I've talked with a lot of credit union CEOs, Kirk, and they don't have a strategy. They have a to-do list. They have some goals that were handed down by the board and that's it. They say, that's my strategy. I say, man, it's not a strategy. That's a to-do list. So, Tensley, if I fly to Michigan today and I go into a branch of yours, and I talk to three tellers and I say, what's the purpose of this credit union? What are they going to tell me?
SPEAKER_02:To create joy and ignite Michiganders' impossible dreams.
SPEAKER_03:You're absolutely sure of that?
SPEAKER_02:I am a thousand percent sure of it.
SPEAKER_03:Oh, man. Hey, Kirk, I need some money to fly
SPEAKER_02:to
SPEAKER_05:Michigan.
SPEAKER_03:I got to test this. Do
SPEAKER_05:it. Do it.
SPEAKER_03:I mean, I'm a journalist. I believe in shoe leather, you know, like knock on the door.
SPEAKER_02:It's great. We just opened our new location in Detroit. You would love it. So come see us. I
SPEAKER_03:talked with an economist the other day that said that the real issue for credit units today is they need to become more operationally efficient because of the lending environment, number one, and also the decline of non-interest income, NSF income, stuff like that, interchange. It's all going downhill. So therefore, he said it's really imperative to become more operationally efficient. What are you doing in that way?
SPEAKER_02:We're doing a lot because we were very inefficient. In fact, I was one of the worst in the country for our asset size when I got here. We very much leaned into human potential to solve problems and did not invest as much in our technology. So we've done a lot to make improvements. We've got more work to do. And what I would say to you is we're never going to be an OPEX shop. When you think about the ways that you can drive success in an organization, we're never going to be the place that's cutting everything and pouring water into our whiteout. I know I'm aging myself with that analogy.
SPEAKER_01:What's whiteout?
SPEAKER_02:Exactly. What I believe to be true is you do have to become more efficient. We've got work to do there. And we've got to drive revenue. And both of those things have to be true. And we've got to be thinking creatively about the ways that we drive revenue. The CUSO model is a brilliant one for credit unions. It's not something we lean into And the potential there, I think, is great. And it is fuel for the future of the organization. So both of those things are focuses for us. And we're just never going to be the place that's going to have the lowest OPEX ratios. We're just not. It's not who we are. Yeah.
SPEAKER_03:Well, his point was actually interesting due to various factors. Many credit unions actually can make loans, et cetera, at less cost than a Chase. In other words, less cost than the biggest banks. And these credit unions, the big ones, say, Nick, you're federal. He didn't name anybody by name. They can always beat Chase on rate if they choose to because they're more operationally efficient and they don't pay income tax.
SPEAKER_01:You know, so I ran a study on this where I went back and looked over time at the number of members served per employee. And I thought, surely with all the technology that we've implemented over the last 25 years, this must have shifted. And it is identical to where it was 25 years ago.
SPEAKER_03:That's because credit unions don't downsize. Every time I've talked to a credit union, they say I'm implementing AIs. I say, how many employees will be cut? They say none. I say, this doesn't make any sense. Well,
SPEAKER_01:but I think some of it is, you know, if you look at the work that was done on a teller line 25 years ago is very different than the work on the teller line today. We're not cashing payroll checks. We're not. I mean, there's some of that, but by and large, it's a very different chunk of work. And we are serving more assets and more loans per employee, but the actual number of members hasn't shifted. I didn't get as far as to kind of look at what's the actual number of members. average median income of an American over that time period, and does it actually correlate, and have we actually accomplished anything? But I also think most of the time when we're focused on operating efficiency, we're just comparing another credit union's OPEX to ours, which you can fix by growing the numerator, right? I'm failing the math today. I don't remember which one. The numerator and denominator. I don't remember which one's on the bottom. So you can grow it by shifting that ratio by growing assets or loan dollar amounts without actually shifting any material expense. It looks like you're more efficient, but I'm not sure you actually are. I think a huge part of it is the peer-to-peer benchmarking has us focused on operating efficiencies that are not actually the right things to be focused on.
SPEAKER_03:That's an interesting possibility. So, Tazlee, are you looking to do a merger? Every credit union is looking to do a merger.
SPEAKER_02:You know, we will certainly always explore possibilities. We are really open and curious. And it's not a leading strategy for us. In every one of my last journeys at a credit union, a merger was my last project, interestingly. They are... really heavy lifts they're distracting for the organization doesn't matter the asset size in fact several of those were very very very small mergers and they take the same amount of time energy and effort unless you you know you really sort of do the divide and conquer and you've got a part of the organization that's that's completely focused on that and so you know the other thing i would say is mergers and credit unions are marriages they're not acquisitions and And they can fall apart for very silly reasons and are not about the business always and certainly not always about what's best for the member. Again, this is one of those topics, though, where I worry that we as an industry get really divided. Like, I'm pro-merger. I'm anti-merger. I'm neither of those things. What I'm responsible for as the leader of the organization is what's best for our members. How do I bring the most value to Michiganders? How do I ensure that we are ready for the next 75 years. And if a merger is part of that, then we'll look at it. And I just think there's an awful lot of other things we can do strategically that are really important that can create impact for us. And so it's not something we're chasing.
SPEAKER_01:There are a couple of credit unions out there who basically live off of mergers, right? And they do one every six months. And they get really good. That is a strategy where they're building skills and techniques and approaches to be good at it and they know who to target, who not to target, how to structure the deals, you know, all that kind of stuff. Yeah. The opportunistic merger, I think the challenge with it is, let's say you actually have a strategy, most likely you're going to put that strategy on hold for some period of time to complete this financial transaction that then, frankly, further takes you away from doing the hard things that make that strategy pay off over time.
SPEAKER_03:Yeah. I also point to maybe federal, which is the biggest... monster in the Savannah. And I don't think they've done a meaningful merger ever, certainly not in the last 10 years. Some of their competitors have done a merger every 30 seconds, and they have not grown at the same rate.
SPEAKER_01:If you took the focus and clarity that comes out of a merger, and you apply that same amount of energy to a single metric, member growth, operating efficiency, whatever it is, the long-term sustainability impact on that credit union from figuring out that mouse trap would be so much more impactful than any individual merger that you did.
SPEAKER_03:Yeah, I'm not anti-merger at all. It's just, when I look at it, I see so, I'm just so impressed by Navy Federal's growth year in, year out. And they're not, have they done a mercy merger here or there? Probably. But that's inconsequential to their balance sheet. They're doing it, man. And they're doing it without buying anything that's loose on the table. All
SPEAKER_01:I know is we did three acquisitions at Ogo and my conclusion after that was they mostly cause pollution and distraction and put us in a scenario where we needed to do another one to hit the next strategic goal. Instead of actually focusing on the really hard problem that would create long-term differentiation in a complex marketplace that would win us the business over time, you know, we would try to pick up a product or a service or something that we thought was strategically aligned and inevitably, I mean, one of the three I think was really good. One was okay and one was quite terrible at the end of the day in terms of the distraction and the culture challenges and the people piece of it that even if the product was amazing, the end philosophy wasn't actually helpful in achieving our longer term goals and differentiating, right?
UNKNOWN:Mm-hmm.
SPEAKER_03:What's your field of membership, Tansley?
SPEAKER_02:The state of Michigan. If you live, work, or worship in the state of Michigan, you can join the credit
SPEAKER_01:union. Can you worship virtually?
SPEAKER_02:That's a good
SPEAKER_03:question.
SPEAKER_05:That's true. A
SPEAKER_03:lot of Catholic masses are online.
SPEAKER_01:That's what I'm asking.
SPEAKER_03:You could become a member of a church in Detroit. What can I say?
SPEAKER_02:I'm definitely going to have to check with our legal team before we say yes to I
SPEAKER_01:can see the membership process. Now you're doing CFCU. Hold on a second. You got to join the zoom call with the Pope.
SPEAKER_03:The CU 2.0 podcast.