It’s Monday afternoon, about two weeks before the Connecticut General Assembly ends its legislative session. The Credit Union League of Connecticut has been pushing for a bill that would expand field of membership options for credit unions to combine community charters with select employer groups.
The league’s president and CEO, Bruce Adams, has just learned someone introduced an amendment that would essentially gut the bill. Adams suspects the amendment came from the banking lobby in Hartford. It’s doubtful anyone on the Senate Banking Committee would have initiated it, he says, but it’s too early to tell.
“Never a dull moment,” Adams says, firing off a text to the league’s lobbyist on the ground at the State House. “A large part of a credit union league’s advocacy program is defensive.”
The political jockeying typically starts at the beginning of a session. Lawmakers introduce legislation but often don’t understand the unintended consequences. The league combs through bills and educates members on the pros and cons.
“They start making changes, and then your competitors will come in and start making changes,” Adams says. “You have warring political factions fighting over some piece of some policy. They end up amending each other’s bills, and industries will get caught in the crossfire.”
Legislative advocacy is just one aspect of the league’s mission, which also includes a variety of programs for member credit unions and a charitable foundation, all aimed at spreading the credit union message to all parts of the Constitution State.
Steeped In History
The league is almost as old as the credit union movement itself. Formed 88 years ago, in May 1935, at a cottage on Lake Quassapaug Park in Middlebury, the league began with nine of the state’s 34 credit unions, many of which were just getting organized.
“Ever since then, we’ve been the voice of the industry in the public, in the State House, and to help the league members share their best practices and mutual affiliation with one another,” Adams says.
Today, approximately 75% of Connecticut’s eligible credit unions are members — 61 out of the state’s 82 credit unions. Although larger credit unions were historically more likely to join, last year the league waived dues for credit unions with less than $5 million in assets to broaden its membership.
“A league that has to survive on its dues revenue alone will find itself with diminishing revenues as more and more credit unions merge.”
Consolidation has been the trend in recent years for credit union leagues across the country, from the Pacific Northwest to the Southeast, the Plains states, and more. The result has been larger regional leagues, such as the Cornerstone Credit Union League — which serves credit unions in Texas, Arkansas, Oklahoma, and, most recently, Kansas and Missouri — and the GoWest Credit Union Association, which covers six states in the Pacific Northwest and Rocky Mountain regions. Closer to Connecticut, the Cooperative Credit Union Association serves Massachusetts, New Hampshire, Rhode Island, and Delaware. But Adams points out that leagues in neighboring New York, Vermont, and Maine remain independent, and many other states have resisted consolidation, too.
All of the state and regional leagues interact with one another, Adams says, and the league estimates that Northeast credit unions together account for approximately 20% of credit union assets nationwide.
“We have the scale and the reach if we want to do something on an inter-league basis,” he says. “But at the same time, we have the benefit of having a local presence and being closer to our members.”
As the industry has consolidated, the number of credit unions in Connecticut has shrunk along with it, from 127 at mid-year 2012 to 82 at the end of last year. Yet those institutions that remain have grown substantially, with assets rising more than 53% in that period to close out 2022 at $14.7 billion across the state.
With the number of potential member institutions declining, the Connecticut league has branched out to find other revenue sources beyond just affiliation, including strategic partnerships with PSCU for card services, TruStage (formerly CUNA Mutual Group) for insurance and investment services, and more. Most recently, the league formed its own CUSO, Aluvy, to create a state-of-the-art online platform for loan participations that helps small and mid-size credit unions by allowing them to sell pieces of their loan portfolios to multiple institutions.
“A league that has to survive on its dues revenue alone will find itself with diminishing revenues as more and more credit unions merge,” Adams adds.
The league is governed by a nine-member board made up of CEOs from its membership. Each fall, before the legislative session opens in January, the board sets the legislative agenda in consultation with a legislative action committee comprised of league directors and general members, and then meets throughout the year to address new issues or “red alert” pieces of legislation that could affect credit unions.
John Holt, CEO of Nutmeg State Financial Credit Union ($558.9M, Rocky Hill, CT) and vice chair of the board, points out that, unlike some other states, Connecticut doesn’t have many large credit unions and is made up of mostly small credit unions. Most of those CEOs just don’t have the bandwidth to monitor and make an impact on the politics in Hartford.
“The league helps bring the credit unions together to collaborate on major issues like taxation or legislative agendas that could impact the health of all credit unions,” Holt says. “It also brings us together for some of the bigger credit unions to support some of the smaller credit unions, creating a camaraderie between us.”
Legislative Agenda
Adams joined the Connecticut league nearly four years ago, following close to a decade in public service. After earning his law degree, he clerked for a federal judge in the busy Southern District of New York and then returned to Connecticut to work for one of the state’s top law firms, focusing on corporate law.
In 2012, he got the call to serve as deputy legal counsel for then-Gov. Dan Malloy. He would later serve as general counsel to Lt. Gov. Nancy Wyman. Between 2014 and 2016, he served as general counsel and acting commissioner at the state’s Department of Banking, where he was first exposed to the credit union community.
“I came to really respect credit unions and the credit union industry in Connecticut,” he says.
In 2019, the governor appointed Adams deputy commissioner of the Department of Revenue Services, but six months later, he heard about an opening for the CEO job at the Credit Union League of Connecticut and “jumped at the chance” to apply. That background in state politics, he says, helped prepare him to oversee the league’s advocacy work.
Expanded Authority
Since then, he’s represented the league through several legislative initiatives, including the expansion of the industry’s authority to serve members in adjacent areas. It’s a relatively simple change in the law, which currently says credit unions can serve a single common bond, multiple common bonds, or a community. The league wants to change the “or” to “and” so credit unions can expand outside their community charters to serve adjacent employers as well as associations.
“If you’ve got the county of Hartford, and you want to add a factory outside of Hartford County and you want to open a branch there, you should be allowed to do that and get approval from the Banking Department to grow your credit union and serve more people,” Adams says.
Health Insurance Pooling
Another key initiative for the league would allow credit unions to come together to buy health insurance as a group to negotiate lower premiums with carriers. For example, including employees and family members, the league would be able to insure up to 5,000 people under a less expensive group policy. The league is part of a coalition of industries supporting the measure; however, it faces opposition from Democratic senators who fear a mass exodus would negatively impact the struggling small-group health insurance market in the state.
“They are in essence saying Connecticut’s small businesses, the ones who can least afford to pay for health insurance, must subsidize the health insurance premium costs for a smaller and still smaller group of employers and individuals while our largest corporations get off scot free,” Adams says. “That’s unfair and, frankly, unjust. I don’t like to use that word so cavalierly, but it’s a matter of justice and equity among the business community.”
Financial Education
Another key legislative initiative is something that has proven elusive for credit unions in other states — mandatory financial literacy education for high school students. The Department of Education, principals, and school boards say there’s no room in the curriculum. Adams disagrees.
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“We’re in a capitalist economy,” Adams says. “If we’re teaching people about capitalism and we’re teaching people about how adults live and survive in the world of America, why are we not teaching them about the basics of personal finance?”
The league wants to offer a model curriculum to schools, but for the most part, only wealthier school districts appear interested in offering it. School districts with poorer, more diverse student populations are less likely to adopt the curriculum voluntarily.
“If we’re going to level the playing field and give every kid a fighting shot at financial success, we have to teach financial education in our public schools,” Adams says. “That seems to be the winning argument today.”
Influencing State And National Issues
The Connecticut legislature ended the session passing both the expanded field of membership and financial education bills. Among its defensive wins, the league turned back a potentially damaging proposal on GAP waivers. The Association Health Plan bill died in the House, but the league scored a deal with the executive branch to support passage next year.
“This has always been a fight worth fighting – and now we are winning,” Adams says.
Most of the Connecticut league’s issues are inherently local, but the organization also works with CUNA when issues arise in Congress that could affect credit unions.
Bigger banks and fintechs can do things sometimes that we can’t. We need to stick together and show we can provide much better service and a much better product. We all need to work together to get that message out, and the league does a great job with that.”
“I’ve got two senators here in Connecticut, and I’ve got relationships with them,” Adams says. “When the national organization and the state organizations work well together, our collective leverage really gets stronger.”
Although members of Congress spend most of the year in Washington, DC, they pay close attention to the local media to stay connected with their districts. As national issues play out in Congress, the league reinforces the credit union position with local advertising and opinion pieces in local newspapers.
“CUNA has the scale and the ability to move the needle in Washington, and we can carry that momentum into our states and promote our unity as an industry,” Adams says. “It’s an interdependent relationship, and it’s very effective.”
Public Relations
Adams is a familiar presence for many who live in Connecticut, as he often appears on TV and is quoted in local newspapers. Credit unions are seen as a trusted source for financial information, and Adams is a go-to source for local media. This was apparent during the height of the pandemic in 2020 and 2021, when Adams was frequently called upon to comment on issues such as PPP loans, relief checks, and personal finance.
“Last year, a reporter had me on to just remind the consumer that the Tax Day filing deadline was two days later [than usual], on April 17,” Adams says. “But I’m more than happy to do that because I get to say ‘credit unions’ six times to the 80,000 people watching.”
Most recently, he was interviewed to comment on the collapse of Silicon Valley Bank. He used the opportunity to remind viewers that for-profit banks and member-owned, not-for-profit credit unions have dramatically different priorities. Some credit unions use the term “credit union difference,” but Adams says they need to be talking about the “credit union advantage.”
“We need to get the message out about our unique business model,” he says. “When you look at the collapse of [Silicon Valley Bank], a lot of what happened was operational failure driven by a profit motive. Millennials and Gen Z-ers are purpose-driven consumers — they want their values to align with those of the companies they interact with.”
Competition Today And In The Future
Holt at Nutmeg State points out that credit unions hold only 8% of the market in Connecticut. Bank of America alone holds 25%. Although large banks might have the advantage when it comes to technology and scale, credit unions will always win when it comes to relationships.
“Bigger banks and fintechs can do things sometimes that we can’t, whether it’s around compliance, technology, or hiring people that are highly proficient,” Holt says. “We need to stick together and show that, together, we can provide much better service and a much better product. I don’t think we can do it alone. We all need to work together to get that message out, and the league does a great job with that.”
This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about the Credit Union League of Connecticut or dive into a decade of archives. Contact Callahan to learn about gaining access today.