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'Underground Shattered' Coverage:

'Underground Shattered' Coverage:

How Credit Unions Are Lagging & Transformational Change & What it Could Cost

WASHINGTON­ – The United States is going through a “transformational change,” and credit unions and especially CU management are lagging it at a cost to themselves and the next generation of members, according to one panel that addressed credit unions here.

Speaking to Mitchell Stankovic’s “Underground” meeting here on the issue of “shattered dreams” was a panel that included Pablo DeFilippi, EVP with Inclusiv; Beth Carr, president/CEO with Santa Cruz Community CU; Jim Morrell, president/CEO with Peninsula CU, and Victor Corro, CEO of Coopera. The session was moderated by Renee Sattiewhite, president/CEO with AACUC.

Here's a look at what was discussed:

Sattiewhite: Diversity. Where are we? Don’t fire your C level people without think you are going to have push back. You can fire C-level executives, but you have to make sure you are firing for performance, not because you are uncomfortable. What I’m seeing is people are reaching out, they want to do better, to do what’s right. The last time we were here (at the Underground) there were six African-Americans. Today, there is double that. That’s good. What are we going to do as an industry to look DEI in the face? We need to be bold, we need to be mindful, we need to be brave, but we have to be courageous. We need to do more.

Progress Has Been Made, But…

DeFilippi: Yes, we have made progress. I remember meeting with some Latinos (at GAC) when we felt so out of place here. That has changed. It’s encouraging, but it’s not enough. We can celebrate, we can have DEI Tuesday, CUPride, all these amazing initiatives, and we should be proud of that, but it’s not enough. Why? One out of five people in this country are credit invisible. What are we doing to address that. That one out of five is a whole country. England has 50 million people. What can we do to change that? What is fair to them and sustainable to us? Remember the Move Your Money movement. Credit unions shied away from that. We were afraid. I really thought it was a missed opportunity.  It took the pandemic for us to become financial first responders. For the first time we believed in ourselves. We were open when banks shut down. The country recognized that all of sudden we had money coming to us. But we can do better.

View from ‘The White Chick’

Carr: I joined Santa Cruz Community Credit Union 12 years ago. I was impressed and inspired by what they were doing; I thought they were walking the walk. In 2011, the whole economy crashed and the credit union made dozens and dozens of small business loans to organizations who couldn't get business loans. The credit union was created by activists who felt that no one had a voice; the small businesses didn't have a voice, they had no place to get a loan. The community didn't have a voice. We have a huge Latinx community in our area that felt they didn’t have a voice.

We were struggling with capital and thinking where are the resources? I cried a couple of times. What am I going to do? How do you make this happen? There were many nights where I was awake asking ‘Is this mission worth it?’ The mission is worth it. The mission is about promoting economic justice, it’s about diversity, equity and inclusion.

It was not only about pulling up the credit union by the bootstraps but, more importantly, myself.

It’s Not a Checklist

With DEI, it is not a checklist. It’s not about the percentage of women-owned businesses as vendors? You can’t just do the checklist and say you’re a DEI organization. I have learned the change isn’t about what we do and how we’re trying to meet people’s needs, it’s a mirror. I had to have a serious conversation with myself. Where are my prejudices? Where are the norms from my childhood I have to question. Am I just being an actress? If I can change then the culture of my credit union can change, and if the credit union can change the community can change, and we can become a force in the world.

I am the white chick from Southern California and I have had people who didn’t trust me because I am the white chick from Southern California. So, I have worked hard to make sure our staff is diverse and reflects the community. DEI is really an internal struggle more than anything else.

‘It Starts With Ourselves’

Morrell: When I've traveled to my credit union family in Africa and visited with them,  I tried to think through what it's like for Ugandan farmer to deal with three or four or five years of drought. What will their credit union do for them? What happens when a Kenyan police officer is killed in the line of duty and leaves his wife and children behind? The credit union only took in male members; it took bold action by a board to change the bylaws of that credit union to accept women. Sometimes things take time to change.

A credit union professional who 25 years ago was struggling with his sexuality sits before you today as an openly gay man on the CUNA board. It's those kinds of generative changes that begin to influence things. We are not doing as best as we can. We have two new members on the CUNA board; two women, one of whom is African-American, replacing two men.

That’s the excitement that I get, the passion that I feel right, that we can effectuate change, we can make things happen.

But it starts with ourselves, it starts with the teams of people around us, it starts with individuals that I reached out to through CU Pride.

I have friends who have been able to help me understand not only through data, but through experience, and those lived experiences propel us. When we don't have that lived experience and we can begin to think through things and empathize with other folks.

U.S. in a ‘Transformational Change’

Corro: I am the chair of the DEI Collective, which is an organization of professional organizations to make sure that this industry cares about the framework of diversity, equity and inclusion—which, by the way, has gotten politicized in this country and which is a shame.

I want to start by saying the United States is going through a transformational change when it comes to its demographics. We are 10 years away from being a minority-majority country, which means all people of color will be more than the white component of the demographics. However, this industry is 90% white when it comes to the C-Suite and the boards. How can we be relevant? Change is needed.

We have DEI Tuesday (at GAC), we have an industry hiring with diversity, equity and inclusion. We have CU Pride. We have a lot of this groups, but again they still feel at the margins. To be honest with you, they still have to fight to be visible and that’s what our members are feeling.

When People Don’t Feel Connected

A lot of people of color will say, ‘I don't know if I feel connected to this bank.’ It's really sad when they call a credit union a bank. When they realize we are a financial cooperative and then we tell them about our principles and what we stand for, that really resonates with that consumer. But I don't know that we are really giving that message clearly.

In the United States we usually talk about asset size, about the loan portfolio and about banking jargon. There's a fundamental difference when it comes to being really committed and really having that purpose clear.

What’s Preventing People from Joining?

Financial inclusion is having the curiosity to ask who are we leaving behind within our field of membership? If you know through data that 20% of Hispanics live in your field of membership, yet have only 1% Hispanic membership, you’ve got to do more. You have to find what is preventing people from joining your credit union. Usually, it is the ID they have. Usually, they don't have a Social Security number.

We are a tool for development first and foremost. We're not a bank and we shouldn't aspire to be a bank. I think that's something we should do a better job in our industry of really internalizing. Once we know that, we can go about and help our community. If we don’t help the next generation, then we have failed as an industry.

Original post available here.

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Source : CUToday

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