SEATTLE—In a period characterized by significant economic and regulatory uncertainty, credit unions cannot afford to be caught “flat-footed,” says Jury & Lass.
“There is considerable uncertainty facing credit unions and the broader financial services sector,” John Lass, president of strategy and leadership consultancy firm Jury & Lass, told CUToday.info. “For the first time in 50 years, we are considering the possibility of stagflation. At the same time, credit unions continue to face liquidity risks like those affecting many banks.
"Additional concerns include cyber-attacks and the potential for the National Credit Union Administration to be integrated into a combined regulatory body alongside banks,” continued Lass. “High mortgage rates and increasing indirect auto loan delinquencies are among the numerous variables that could impact business operations.”
Jury & Lass provides strategy and leadership consulting services to credit unions and emphasizes the movement stands at a critical juncture requiring clarity, leadership, and strategic foresight.
“While challenges emerge from multiple directions, they also present opportunities to strengthen foundations and lead with intention,” Pat Jury, managing partner, noted. “On the regulatory side, credit unions have so far maintained their federal tax exemption, although developments in Congress necessitate close monitoring. The future structure of regulatory oversight remains uncertain, particularly with vacancies on the NCUA board and speculation regarding potential consolidation with agencies like the FDIC.”
The reemergence of stagflation—a combination of inflation and sluggish growth not seen since the 1970s—poses new challenges.
“Very few current credit union leaders have operated under such conditions. This is not a time for panic or disengagement but rather for deliberate action, disciplined planning, and heightened situational awareness,” Lass advised.
Strategic Risk Assessment: A Practical Framework
Lass emphasized that managing uncertainty begins with a disciplined risk-assessment process.
“This approach enables leadership teams to anticipate challenges, assess potential impacts, and prepare appropriate contingency plans,” Lass explained.
He outlined a typical three-step process for addressing risk:
- Identify Risk Factors
Engage both the board and management in identifying 12–15 relevant risks based on the credit union's current condition. Examples might include:
- Stagflation
- Recession
- Liquidity risk
- Cybersecurity threats
- Changes in regulatory oversight
- Member growth stagnation
- Rising mortgage rates
- Indirect loan delinquencies
- Categorize Risks by Impact and Urgency
Evaluate each risk based on:
- Magnitude of potential impact
- Likelihood of occurrence
- Expected timing (near, medium, or long term)
- Ability to mitigate or manage the risk
- Develop Contingency Plans
For high-impact, high-likelihood risks with near- or medium-term timing, leaders should craft specific contingency strategies.
“The goal is preparedness, not being taken by surprise. This kind of risk-assessment process enables a credit union's board and management team to understand how they are positioned and prepared,” Lass said.
Planning will vary according to each credit union's situation, reminded Lass.
“For example, if Credit Union A enters a recession with an 11% net worth compared to Credit Union B’s 8%, Credit Union A has a larger safety margin if credit losses increase, whereas Credit Union B does not. Their respective contingency plans will likely differ. Each credit union must evaluate its own unique circumstances,” he explained.
Lass emphasized the need for strong situational awareness skills among credit union leaders.
“Like seasoned pilots, effective credit union leaders continuously monitor their environment, anticipating turbulence before it hits,” he stated.
While data is essential, risk assessment also requires creative thinking, added Lass.
“The objective isn't precision but preparedness,” he said.
Pat Jury
Leadership In the Face of Crisis
Pat Jury underscored that leadership during turbulent times demands more than competence—it requires steadiness, self-awareness, and a connection to the mission.
“Coaching offers an essential outlet for leaders, helping them make decisions with clarity and avoid reactivity,” Jury asserted.
Succession planning is crucial for readiness, not just for the future but for the present, explained Jury, highlighting how coaching can provide direction, assistance, and confidence.
“Who assumes responsibility if a key leader is unavailable or overwhelmed? Strong organizations build leadership capacity in advance to ensure continuity during stressful periods,” Jury said.
Even when difficult decisions are unavoidable, the way they are communicated and executed is critical. Coaching supports leaders in balancing rationality with empathy, preserving alignment and morale, Jury said.
“Stakeholders need to hear from leadership early, often, and with transparency,” stressed Jury. “Regular communication builds trust, even when definitive answers aren’t immediately available.”
Jury added that it isn’t sufficient for only the CEO to have support—mid-level managers require guidance as well.
“Change is constant within credit unions, affecting CEOs, management teams, and board members,” Jury observed. “We spend considerable time in coaching to understand where executives stand within their roles. Many executives report that the job today differs significantly from the one they were initially hired to do.”
Roles have simply become more complex, noted Jury.
“Regulations have evolved, board members change regularly, and economic conditions fluctuate,” he explained.
Culture is another critical factor that leaders must address, especially in times of stress, added Jury.
“During periods of stress or significant change, maintaining cultural alignment is vital. This can be achieved by consistently emphasizing and living the organization's culture,” he stated. “A strong organizational culture benefits both staff and boards of directors, creating a stable emotional foundation during times of significant change.”
“High performing credit unions find their own unique ways to take strategy, leadership and culture to the next level,” concluded Lass. “A time of uncertainty adds a healthy sense of urgency to that growth.”