By Ray Birch
MARLBOROUGH, Mass.—When it comes to putting dollars where small credit unions need them the most, IT and general operations projects are in high demand, according to the Cooperative Credit Union Association (CCUA).
As CUToday.info reported, CCUA has introduced a new source of funding it said is dedicated exclusively to helping its small credit unions improve services to their members.
According to the CCUA, through its Small Credit Union Assistance Program, all federal and state chartered CCUA-member credit unions of $100 million or less in assets are eligible to apply for grant monies to support their operational needs.
The grants, up to $2,000 each, may be utilized for operations, technology and security upgrades, in addition to helping a credit union engage emerging and underrepresented markets, including youth, older Americans, immigrant populations, and people of low or modest means.
CCUA reported it is funding its Small Credit Union Assistance Program through the support of its own member credit unions, complemented by the program’s principal sponsors, CUNA Mutual Group and MemberClose.
“It's the first time in CCUA history we've had had a program of this depth and reach to support small credit unions,” said CCUA President/CEO Ron McLean. “It's the right thing to do for our lower-asset-size credit unions, as they need all the help that they can get. CCUA wants to be an integral and strong partner to help them fulfill their mission of serving their members.”
McLean told CUToday.info that the Cooperative Credit Union Association, which serves credit unions in Massachusetts, New Hampshire, Rhode Island and Delaware, recognizes that small credit unions need additional support to provide the impact that they want.
But he stressed the funds are not there for the small shops to simply survive.
“I disagree with the thinking that small credit unions have a difficult time surviving,” stated McLean. “I believe in the future of small credit unions. I'm pretty passionate about this. I do think they need more attention, and the CCUA wants to be part of their future and help them and do what they do best, which is serve their members.”
A Starting Point
The support CCUA is providing through the new grant program is just the beginning of the league’s efforts here, emphasized McLean.
“This is a starting point for broader support and assistance we can give our small credit unions,” he said. “The $75,000 CCUA has assembled for small credit unions here is just the start. Small credit unions are integral to the movement.”
Ron McLean
The league raised the money in part through its 2022 dues.
“We raised almost $40,000 from that from that, and then we raised almost roughly $12,000 from a chairman's testimonial event we had for our outgoing chair in 2021, and then we had major support from CUNA Mutual Group and a subsidiary of CCUA, MemberClose,” McLean said.
In the Evaluation Process
McLean said receiving funds is not as simple as the small credit union simply filling out an application.
“We have to review the application—we ask not only how much money you need but what's the project budget, what is the statement of need around the project, and then just some rationale and justification for what they're asking for,” explained McLean. “Right now, we’re just seeing what comes back from our members as far as the demand for these funds and we'll make decisions based on that.”
McLean said he would like to be able to give all smaller-asset-size league members money from the fund.
“We have about 95 member credit unions that are under $100 million in assets and I would love to have all of them apply for the funds,” McLean said. “I don't know if that's actually going to happen, but it would be great to be in a position where we could give hopefully at least $1,000 to every credit union. The limit is $2,000 per calendar year for the program.”
Categories of Usage
In the funding application, CCUA outlines some of the categories for which CUs can use the money.
“We wanted to be flexible and broad enough to where if I'm a credit union CEO who runs an organization that's under $100 million, that I could take this grant and say I can find some way to help my credit union move forward,” McLean said.
A number of the early requests for funding are for technology projects or upgrades, McLean said.
“We’ve had some saying they will use the money for home banking, ATMs, remote deposit capture, website development and enhancement, cybersecurity…” McLean said. “Credit unions are also saying they will use the money for compliance and general operations; that is a big area of need. I think every small credit union could utilize a grant in some way—and we are making the money available so they can use it for as many opportunities as possible.”
The Challenge
McLean agreed with other analysts who have stated that technology is a challenge for small credit unions—it is expensive and therefore can be difficult for small shops to afford, but if those CUs can find the dollars and have a strong digital presence, they can appear to be bigger than they actually are, and make up for the fact they don’t have a lot of branches.
“Technology can be an equalizer,” McLean said. “But it is not cheap. However, if small credit unions can find the right partners, they can really move forward.”