CU’s Are The Cubs Of Financial Services

November 4, 2016 at 8:59 am Leave a comment

cubsThe Cubs and credit unions have a lot in common. Before Thursday morning, the Cubs last won a World Series in the year that the first credit Union was formed in the United States in the great state of New Hampshire.

Just as every baseball fan knows that the Cubs play in the friendly confines of Wrigley Field, every tried- and-true credit union supporter knows that credit unions are not-for-profit member owned cooperatives that provide an alternative to commercial banking. Even people who don’t know much about credit unions think positively about them.

Times have changed, but when I think of the cubs I still think of Wrigley Field having no lights and an outfield padded with ivy. And even though there are many highly sophisticated, large credit unions, when I think of the industry I still think of the institutions that started with a bunch of friends passing around money in a tin and deciding to lend to one another.

The problem is that a legacy can become a crutch as well as an asset. For the Cubs to win they needed to change with the times. They changed and they won. I would  bet you that those credit unions still around 20 years from now will be those that balance the need for change with the need to keep what makes credit unions so unique.  This is particularly challenging for legacy businesses.  Just ask Sears and Kodak.

How can a legacy be harmful? For one thing economists have pointed out that the teams most likely to win the World Series are not those with the loyalists fan bases, but the ones with the most fickle. In other words, there was more than just bad luck involved in the Cubs ineptitude. Somewhere along the way their fans and organization got too used to losing. After all, win or lose they were still the lovable Cubs. The Yankees would never go a hundred years without winning because if they did they would be an expansion team in Vegas. New Yorkers have better things to do with their time than celebrate mediocrity.

In order to win the cubs had to embrace new ideas and a new generation of leadership. While it’s true that Joe Maddon almost single-handedly cost the Cubs their World Series with some awful managing, no manager has done a better job of incorporating analytics into the game.  He was the guy shifting infielders all over the field long before it was trendy.  He knows how to use big data.

And then there is Theo Epstein. He was born in 1973. He is not an ex-jock looking to stay as close to the field as possible, but a Yale graduate.  At an age when most adult males have to content themselves with playing fantasy baseball the Red Sox and now the Cubs were smart enough to let him build a baseball team.

Many credit unions have an aging fan base of customers and seasoned leadership. Even though there are many trends outside of the control of the industry which makes continued consolidation inevitable, I wonder how many more credit unions could survive if they were willing to embrace new ideas and new approaches to banking. For example, more than half of the mortgages originated in this country are not even originated by banks and credit unions anymore.  This remarkable trend occurred because a handful of businesses were willing to look at a very old business in a very new way.  Ultimately that’s what Theo Epstein and Joe Madden do better than anyone.



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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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