A Force For Good In Banking

Clearwater FCU adopted a values-based banking approach in 2017 and has made significant strides in building a resilient, transparent, and socially and environmentally aware cooperative.

Top-Level Takeaways

  • To differentiate itself from competitors and better live its mission, Clearwater FCU adopted a values-based approach to banking in 2017.
  • In its efforts to become a force for good in banking, the credit union developed metrics for its 2020 strategic report that ensure it is fulfilling its five core principles.

Five years ago, Clearwater Federal Credit Union($752.8M, Missoula, MT)was feeling the pressures of a mid-size shop.It wasn’t quite large enough to operate at scale, and its growth was limited by the size of its three-county field of membership.

In 2015, the then-named Missoula Federal reported negative member growth and a loan-to-asset ratio of 36.8%, nearly 30 percentage points lower than the national average.

Clint Summers, COO, Clearwater FCU

At that point, we wanted to realign and find some stability,says Clint Summers, the credit unions COO.

In doing so, the credit union asked itself an introspective question: What kind of organization did it want to be?

It pressed its board, executives, management, and staff to come up with an answer and ultimately recognized it needed to align its core values with the wants and needs of its members and staff if it hoped to grow.

In 2017, the rebranded Clearwater Credit Union introduced a values-based banking strategy in which four core values support the credit union’s mission and vision statements. Taken together, these guiding values inform day-to-day decision-making.

Mission,Vision,And Values At Clearwater Credit Union

Mission:To be a force for good in banking, in the communities we serve,and in the lives of our members.

Vision: By living our values,we will redefine the role financial institutions play in building thriving, sustainable communities.


  • Together We Own: We practice responsible banking, grounded in cooperative ownership.

  • Together We Empower: We solve problems and create opportunities for a better tomorrow.

  • Together We Include: We choose to be inclusive, not exclusive.

  • Together We Matter: We are committed to making a difference in the world.

Values And Principles

From the start, staff members embraced Clearwaters values-based approach, Summers says, which goes to show the values were already informally guiding operations and decision-making.

We just formalized things,Summers says.Which made for an easy transition.

Clearwater remains competitive on price and product, and the values-based approach helps the cooperative overcome competitive challenges facing the credit union.Of note, Montana’s aging population puts greater importance on attracting and retaining younger members.Additionally,Clearwater estimates there is one financial institution for every 28,000 people in the United States. In the credit union’s field of membership,that’s closer to one institution for every 7,100. As such,local competition in intense.

Clearwater’s approach is based on business fundamentals, but within its values the credit union has developed five principles. The significance of each principle is clearly defined, and each principle has a key metric to help the credit union assess its long-term progress. The principles are:

  • Member Centered
  • Long-Term Resiliency
  • Local Economy
  • Social & Environmental Impact
  • Transparency

Clearwater was the second U.S. credit union to join the Global Alliance for Banking on Values (GABV), and the cooperative’s principles are influenced by the alliance. But as the credit union was putting together its five-year plan covering 2020-2024,it decided to lean heavily into its transparency principle and developed a 13-page version of its strategic plan to post on its website.

That’s where the rubber meets the road,Summers says.Not only are we transparent in what we are trying to measure, we’re also holding ourselves accountable by putting it out there.

And what it’s putting out there are the specific ways it intends to live up to each principle.

For example, what does it mean for Clearwater to be member centered? According to the strategic plan, Clearwater aim[s] to build long-term relationships with our member-owners, not just transact with them on a one-off basis. To that end, we tryto understand their economic activities, problems, and opportunities. We then design products and services to meet those needs.


Clearwater FCU
Data as of 12.31.20

MEMBERS: 52,408

To ensure it is living up to this ideal, Clearwater is tracking membership growth looking to reach 4% by 2024 member satisfaction and utilization rates in its feedback channels, account openings in a newly designed branch model, and more.

Each principle includes at least three sub-focuses under which it tracks its goals. For the member centered principle, those focuses are membership growth, member voice, and new branch model and the goal tracking includes new members, lost members, andnet membership growth by geography.

Clearwater’s metrics don’t just live in its online PDF, however. The credit union has built an automated dashboard through Power BI with which it presents its quarterly progress to its board. And because the information it collects is so vast,the credit union continues to add lines to its dashboard to build a more comprehensive picture of its progress.

We wanted to commit to reporting, but the reporting itself can take energy and effort to get done,Summers says. Automating the report alleviated much of that.

Looking at fourth quarter performance, Clearwater’s 2.61% member growth is slightly behind its plan of 3%. However, it is achieving significant growth in other areas of its balance sheet. Under its long-term resiliency principle, Clearwater hasplanned for 7% annual asset growth with assets surpassing $750 million, 15% annual loan growth, and a loan-to-asset ratio of 70%, among others line items. Since 2019, assets have grown nearly $200 million without a merger and loans have spiked as well; annual loan growth in 2020 surpassed 30%, keeping pace with asset growth to maintain a loan-to-asset ratio at 56%.

We have our goals set for the next five years, but it’s not just about the numbers,Summers says.We want to ensure our culture remains strong and we become a force for good in banking.

Living Values

Clearwater is focused on living its values and becoming an institution focused on more than just profit. It put its strategic plan online in part to be an example for other credit unions considering the shift.

We are not part of some exclusive club,Summers says.We want people to see what we are doing and feel like they can do it, too.

To operate under a true values-based strategy, Clearwater must embed its five principles into the very fabric of the institution. Its employees must live those values and work in ways small and large to support them. Putting its values at the forefront of everything it does has helped the credit union recruit and retain employees more effectively. There’s no cultural surprises when a new hire starts, as the conversations all occur before the hiring decision.

Culture also flows into vendor relationships, Summers says. At the onset of its values-based banking transition, Clearwater recognized its core provider wasn’t fully able to provide the data the credit union needed, so it underwent a conversionin 2019. Since then, during vendor due diligence, the credit union ensures data reporting capabilities are up to par and cultures are aligned.

Are they putting profit first, or are they helping us live our values first?Summers asks.I’d say the same thing about our products, services, and polices.

To that end, Clearwater has made several changes to better align policies and values.

In 2016, the credit union dug deeper into its courtesy pay program, a service designed to cover accidental overdraws, and learned that while most courtesy pay users actually use the service just once or twice per year, a small proportion courtesy payusers used it very frequently and paid the majority of fees to the credit union. Sometimes the fees that an individual member paid could reach levels that were uncomfortably high to credit union management. So, Clearwater piloted a new program inwhich overdrafts can be treated as a short-term loan rather than transfer fee. The loan is lower cost for the member, says Summers, less than 20% 0f the cost of a traditional courtesy pay fee.

As that program has expanded, courtesy pay fee income has decreased and members have saved money, with no loss of service. In 2016, courtesy pay fees were approximately 0.14% of average assets. In 2020 they were 0.8% of average assets. That’s notjust due to asset growth, Summers says. The absolute dollar value of total of courtesy pay fees has decreased about 40%.

That decision has impacted our bottom line as an organization, but it has positively impacted the people who needed the help,Summers says.

As long as we stay true to the values we’ve identified and the principles that make us different, we’ll attract the right people and maintain the right culture. We’ll continue to grow and make a difference.

Clint Summers, COO, Clearwater FCU

In Clearwater’s market, finding affordable housing can be a challenge. And the high rates and fees that typically come with mobile home loans can quickly turn an affordable option on its head. To combat this, the credit union introduced a hybridhome loan product that it underwrites differently from a traditional mortgage and thereby can offer a lower rate.

Beyond products, Clearwater has made significant investments toward social and environmental impact.

Last year, it released a Diversity, Equity, and Inclusion plan to further change policies, procedures, and practices by setting goalsand developing action items to achieve those goals. For example, Clearwater wants its workforce to be representative of Montana’s diversity. To that end, it is creating an affirmative action plan that identifies new areas in which to advertisejobs and increase unrepresented populations. It also is creating an internship program to support BIPOC students and refugees who are in the Montana University system.

On the equity front, Clearwater does not pay less than 80% or more than 120% of market pay for employees; the executive range is 75% to 125%. It also limits the base pay of its highest paid employee to no more than 10-times its lowest paid employee. Inits annual compensation report, Clearwater highlights where employees fall in this range. The current multiple from the 2020 report was 9.48.

We’re not trying to keep that a secret,Summers says.Knowing that is important, so we’re open about it.

As for sustainability,Clearwater is tracking greenhouse emissions,water and paper consumption,and the total carbon impact of its loans and investments.It partnered with Climate Smart Missoula,a local firm,to help calculate carbon offsets in the home-building process.

All together, we’re trying to determine what our carbon impact is and how we can do a better job in our building projects, in our facilities, and with our travel to protect the environment for the future,Summers says.

Moving forward, Summers sees that there will continue to be pressure from external sources such as fintechs or local competitors. If the credit union can maintain its values-based approach, success will follow.

As long as we stay true to the values we’ve identified and the principles that make us different, we’ll attract the right people and maintain the right culture,Summers says. We’ll continue to grow and make a difference.


We are building a network of leading credit unions that will help us define impact metrics and standards, share their perspectives and practices, and work with us to evolve the credit union story.Join the network today.

April 22, 2021

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