Generative AI tools for both member-facing applications and back-office processes are in the hands of employees right now, raising the stakes for governance, compliance, and smart use policies that don’t hinder innovation or competitiveness. That means today’s credit union leaders must balance moving quickly to unlock AI’s value with putting enough governance and guardrails in place to mitigate risk.

Credit unions across Illinois, Indiana, Texas, Washington, and beyond are putting AI to work while building real-world strategies to govern it as they go. Read on to learn about their AI use cases and dive into how they’re approaching governance issues.

Clear, Simple Guidelines

John Sahagian has been with BCU ($6.2B, Vernon Hills, IL) for 25 years. He became the suburban Chicago shop’s vice president and chief data officer in July 2018.

Sahagian says BCU is actively integrating gen AI within existing platforms for departments like HR, marketing, and software development. These tools, often provided through partnerships, enhance efficiency and align with AI roadmaps from trusted vendors.

BUC also has heavily invested in Salesforce and Microsoft platforms, both of which offer powerful generative AI tools within secure frameworks. Additionally, the credit union is providing AI training and resources to ensure employees can work creatively and effectively alongside machine intelligence.

What steps has your credit union taken to establish clear, responsible AI governance and policy frameworks, and how are you ensuring ethical and compliant adoption across departments?

John Sahagian: Gen AI clearly holds massive potential, but it also brings entirely new risks. Instead of shutting everything down, we chose to embrace the opportunity and quickly rolled out a clear, simple AI acceptable use standard.

This guideline spelled out the do’s and don’ts in plain language and helped people understand the risks involved. Gen AI tools are accessible to everyone. That makes this both a strength and a challenge.

How are you identifying and addressing “shadow AI” use within your organization, and what safeguards are in place to manage risks?

JS: Our security team has been very proactive in scanning for unauthorized AI usage and even blocking unauthorized AI activity. We don’t do this to discourage AI use, but rather to ensure all tools used have been reviewed.

Furthermore, we make available to all employees permitted gen AI tools that operate inside our security framework and ensure prompts and responses are protected. So, anyone that wants to experiment and use AI absolutely can within the permitted tools.

What role have your executives and the board played in shaping your AI governance strategy, and how do you communicate its importance across the enterprise?

JS: As soon as ChatGPT hit the scene, it was apparent these new AI models and tools would be game changers. Our board gave us a dual mandate of, “there’s new risks here, you better be careful,” and “there’s a lot of value here, you better not lose pace!”

We’re fortunate our board members see where this is going and are as enthusiastic about AI progress as they are about AI defense. We provide them with quarterly updates on the progress of our AI roadmap.

Communication is absolutely essential. This thing we’re trying to govern is constantly changing and moving, so it can feel overwhelming to start building policies and standards. A limited few in your organization will likely read through your AI governance standard, but it’s important every employee knows you have one.

Empowered Employees To Leverage AI Responsibly

Tammie Fletcher has been vice president of HR at CEFCU ($8.1B, Peoria, IL) for the past three years. She has been with the central Illinois cooperative since 1989, starting her career in marketing.

Fletcher says CEFCU formed an internal team led by C-level executives to develop AI guidelines and a policy framework that focus on enabling responsible use of gen AI as well as identifying current use cases and paving the way for future capabilities.

The team identified more than 60 AI use cases at the outset, many already embedded in existing software. These range from basic machine learning applications to advanced gen AI functionalities across the credit union. Employees also can use external generative AI tools like Chat GPT and internal tools like Microsoft Copilot Chat.

What steps has your credit union taken to establish clear, responsible AI governance and policy frameworks, and how are you ensuring ethical and compliant adoption across departments?

Tammie Fletcher: Our cross-functional team created a comprehensive AI policy that defines CEFCU’s approach to responsible AI adoption, explains why we use it, and sets guardrails for development and deployment.

We also launched a generative AI acceptable use policy that sets clear, practical rules for ethical and secure AI usage. Both policies are now official corporate policies, recently approved by the CEFCU board.

We’re finalizing a strategic roadmap under the guidance of our chief officers to ensure sustainable and impactful implementation.

How are you identifying and addressing “shadow AI” use within your organization, and what safeguards are in place to manage risks?

TF: We conducted a comprehensive survey across departments to identify existing AI applications. Detailed training will be required of all employees to ensure they understand restrictions for using AI and how to leverage tools to enable secure internal use of AI to help with tasks, including document writing, content generation, meeting minutes, data analysis and trends, and more.

There will also be technical restrictions placed on access to unapproved AI applications.

What role have your executives and the board played in shaping your AI governance strategy, and how do you communicate its importance across the enterprise?

TF: Our executive leadership has been instrumental in shaping and guiding our AI strategy, ensuring alignment with CEFCU’s mission. They work closely with the AI team they formed to provide ongoing feedback.

We will ensure credit unionwide alignment through ongoing training, transparent communication about AI initiatives, and strong leadership support. AI governance is essential to maintaining our members’ trust and ensuring our use of AI technology remains compliant with regulations, internal policies, and ethical standards while staying aligned with CEFCU’s mission and vision.

Our approach empowers employees to leverage AI responsibly to enhance their work while keeping human judgment and fact-checking in all decision-making processes.

Weekly Recaps For Today And Tomorrow

Doug True began his career with FORUM Credit Union ($2.3B, Fishers, IN) as a management trainee in 1988. He was named the Indianapolis-area credit union’s CEO in November 2011.

True says FORUM Credit Union is applying AI across multiple departments, including indirect lending, where AI helps review auto loan contracts for accuracy and compliance. In commercial services, the credit union uses AI to summarize property appraisals efficiently. In marketing, AI tools generate copy suggestions, whereas the fraud department uses AI to detect patterns relevant to Suspicious Activity Reporting (SAR). Additionally, robotic process automation is streamlining internal audit processes on large data sets.

What steps has your credit union taken to establish clear, responsible AI governance and policy frameworks, and how are you ensuring ethical and compliant adoption across departments?

Doug True: Our executive team regularly meets to discuss AI, we’ve established a cross-functional team, and we will possibly make a new hire in 2026. This position would help us document governance of AI tools, document usage to avoid duplication of efforts, and ensure we’re leveraging existing tools before purchasing new tools.

How are you identifying and addressing “shadow AI” use within your organization, and what safeguards are in place to manage risks?

DT: Our technology team has controls in place for the use of AI tools. We’re actively surveying via technology and social engineering.

What role have your executives and the board played in shaping your AI governance strategy, and how do you communicate its importance across the enterprise?

DT: Governance is happening among our executive team as well as the cross-functional team across the credit union currently using AI tools. We regularly discuss developments in the AI space at our executive team and board meetings.

We publish a recap each week for our volunteers on what we’re working on at the credit union. This recap often includes how we’re using AI today and how we plan to use it in the future.

AI governance is vital to the protection of member data and intellectual property. We internally develop our internet banking and mobile app platform, so it’s critically important we protect this intellectual property contained in this code set.

Interviews have been edited and condensed.

The post How To Build AI Strategy In Real Time (Part 1) appeared first on CreditUnions.com.

Generative AI tools for both member-facing applications and back-office processes are in the hands of employees right now, raising the stakes for governance, compliance, and smart use policies that don’t hinder innovation or competitiveness. That means today’s credit union leaders must balance moving quickly to unlock AI’s value with putting enough governance and guardrails in place to mitigate risk.

Credit unions across Illinois, Indiana, Texas, Washington, and beyond are putting AI to work while building real-world strategies to govern it as they go. Read on to learn about their AI use cases and dive into how they’re approaching governance issues.

Regular AI Ideation Sessions

Kayvee Kondapalli has been CIO of Greater Texas Federal Credit Union ($957.3M, Austin, TX) for the past six years. He has nearly 25 years of credit union technology experience.

Kondapalli says Greater Texas has begun testing AI applications, including Microsoft and Google chatbots, although nothing is yet live. The credit union has partnered with a vendor to deploy an AI-based website chatbot and a contact center agent to assist members more effectively.

Staff members are already using tools like ChatGPT and Microsoft Copilot to streamline tasks such as document creation, data analysis, and decision-making. The veteran technologist says his shop has also launched ideation sessions with management to identify future use cases and ensure compliance with AI policies.

What steps has your credit union taken to establish clear, responsible AI governance and policy frameworks, and how are you ensuring ethical and compliant adoption across departments?

Kayvee Kondapalli: We have a set of AI use guidelines. All employees have been trained and must participate in monthly AI courses to keep current with tech changes and our policies. Our senior management team discusses this topic frequently, weighing pros and cons every time a new tool is requested or talked about on the internet.

Greater Texas understands the benefits of AI, yet we’re careful in trusting and adoption. We’ve bolstered content filtering to block generative AI sites except those approved, and requests for access are reviewed by IT leadership, our cybersecurity officer, the CIO, and our technology steering committee as needed before giving the green light.

We regularly evaluate AI use cases in the credit union and financial services industry through reading online articles and participating in virtual and in-person generative AI-specific events. We also hold regular AI ideation sessions with middle management to explore new ways to possibly use the technology.

For example, we currently have a line of business tinkering with developing a chatbot of sorts to aid with a recurring task, and another department is testing an interactive report development tool.

How are you identifying and addressing “shadow AI” use within your organization, and what safeguards are in place to manage risks?

KK: We are committed to using AI safely and ethically. Employees are thoroughly trained in our AI policies and receive ongoing education about generative AI and which tools are approved for use within the credit union.

We use content filtering monitors to govern the use of approved generative AI tools. And to stay ahead of shadow use, we have regular open discussions within the executive team to explore new ways each department could use AI to improve efficiency.

What role have your executives and the board played in shaping your AI governance strategy, and how do you communicate its importance across the enterprise?

KK: As ChatGPT began picking up steam, we saw what was coming and wanted to start leading with education and governance in this area before it became commonplace in the workplace.

Our cybersecurity officer collaborated with the head of marketing and together they developed a set of AI use guidelines. These were presented to the technology steering committee, made up of mostly senior management, including our CEO. These guidelines are now an official part of our employee handbook.

Given the newness, exponential evolution, and rapid adoption of AI, we felt it was critical to be on the leading edge of governing how AI is used in our credit union. AI is almost like the internet is born again, the technology has such a profound impact.

AI As A Strategic Asset

John Orton joined University Federal Credit Union ($4.2B, Austin, TX) as vice president of enterprise risk management in February 2022. There, he oversees the fraud, collections, legal, facilities, and compliance areas.

Orton says UFCU is embedding AI into its digital strategy to become more data-driven and member-focused, using advanced analytics to personalize experiences and generate actionable insights. He says such tools help predict member needs and improve service delivery across all platforms.

UFCU is piloting AI-driven solutions that automate operations, support employee decision-making, and improve service efficiency. An ongoing focus is expanding AI use responsibly through innovation and strategic partnerships.

What steps has your credit union taken to establish clear, responsible AI governance and policy frameworks, and how are you ensuring ethical and compliant adoption across departments?

John Orton: UFCU is among the early credit unions to formalize an AI policy, reflecting our proactive stance on responsible innovation and data stewardship. We regularly review our internal framework to ensure alignment with industry best practices and regulatory expectations. We designed that framework to guide ethical use of AI in ways that protect member trust and organizational integrity.

We’re advancing our data and AI strategy by building a modern, scalable data platform and fostering a culture of responsible innovation. We strive to empower employees with the tools and training needed to leverage data and AI for personalized member service and operational efficiency.

By automating routine tasks and streamlining processes, our goal is to enable teams to focus on delivering meaningful experiences. Our strategy is guided by continuous improvement, transparency, and a commitment to measurable impact for members and the organization.

How are you identifying and addressing “shadow AI” use within your organization, and what safeguards are in place to manage risks?

JO: UFCU prioritizes education and clear communication to guide ethical AI adoption. We have controls in place to protect member data and prevent unauthorized sharing, and we are continuously evaluating our governance framework to address emerging risks.

As our AI maturity grows, we plan to enhance our monitoring capabilities to ensure compliance and support responsible innovation across all departments. We’re committed to continuous improvement as the AI landscape evolves.

What role have your executives and the board played in shaping your AI governance strategy, and how do you communicate its importance across the enterprise?

JO: UFCU’s senior leadership and board have set a bold vision to use data and AI as strategic assets in our shift to a member-centric, digital-first organization. Their support, along with our cross-functional AI committee, ensures our approach aligns with our mission to deliver personalized, proactive member experiences and empower employees with actionable insights.

AI governance is key to responsible innovation and long-term success. We ensure every initiative aligns with our values, regulatory standards, and ethical commitments. We’re building a culture of data stewardship and continuous learning, equipping employees to use AI tools that automate routine tasks, boost efficiency, and deepen member engagement.

Through education, clear policies, and leadership support, we aim to help teams use data and AI to drive operational excellence and personalized service.

Just Another Technology

Shawn Dunn is vice president of data and analytics at Washington State Employees Credit Union ($5.1B, Olympia, WA). He joined WSECU in June 2024 and has 15 years of experience in credit union business processes and intelligence.

Dunn says AI adoption at WSECU is guided by member service and organizational benefit, with efforts centered on quickly accessing actionable insights. The credit union is enhancing existing platforms and preparing to grow through future vendor collaborations.

Education also is a major priority, with WSECU training staff members on AI tools, use cases, and best practices. According to Dunn, the credit union’s most significant rollout so far is Microsoft Copilot, which is integrating with Office tools to accelerate strategic decision-making through gen AI-driven insights.

What steps has your credit union taken to establish clear, responsible AI governance and policy frameworks, and how are you ensuring ethical and compliant adoption across departments?

Shawn Dunn: We began with policy, values, and buy-in from the board and senior leadership. In 2024, we formed an AI guidance group made up of leaders from data, IT, and compliance.

One of the group’s first efforts was publishing an organizational AI usage policy with clear guidelines on acceptable use. We also developed communication plans, training opportunities, and a strategy for managing AI technologies.

A key belief we’ve embraced is that AI is just another technology. We already have strong internal processes for evaluating and managing tech, so there’s no need to over-engineer new governance frameworks.

Our top priority now is team readiness. Without it, successful AI adoption will falter. We’ve built a clear communication plan that includes leadership vision, training, and success stories to normalize AI at WSECU and increase our team’s impact.

At the same time, we’re exploring partnerships where AI supports business objectives. Staying focused on tools that truly serve members and staff helps us avoid chasing the next shiny object that doesn’t move us forward.

How are you identifying and addressing “shadow AI” use within your organization, and what safeguards are in place to manage risks?

SD: Managing sensitive data is foundational in financial services. Our AI acceptable use policy is a great place to start for our team. We’ve also had discussions with leaders across the organization to ensure that we continue to follow established guidelines for onboarding and using new technologies.

I’ve talked to some peers who decided to outright block tools like Copilot altogether, and this is likely inadvertently increasing risk. Your teams know the value of these tools, and if you don’t provide them in a controlled manner, they’ll find ways to use them in a potentially more irresponsible fashion.

What role have your executives and the board played in shaping your AI governance strategy, and how do you communicate its importance across the enterprise?

SD: Like any successful initiative, you need buy-in and alignment at the top to gain employee confidence and adoption. WSECU’s senior leaders have been highly engaged since the onset of our AI efforts. In addition to representation on the AI guidance group, senior leadership is integral to communicating the vision of how AI elevates our efforts and improves the member experience.

They’re also sharing their own AI learning journeys, mirroring for the entire staff that we’re all learning together how to use these tools. Everything ties back to our organizational capabilities and those key strategic objectives established in the business plan.

AI governance is not just a compliance exercise; it’s a strategic requirement. I encourage my peers to find governance practices already implemented in their own organizations. There’s no need to create redundant frameworks to manage a new capability like AI. The focus should be on layering in additional considerations within established governance practices, such as how you map, measure, and monitor the impacts of AI-based tools.

Interviews have been edited and condensed.

The post How To Build AI Strategy In Real Time (Part 2) appeared first on CreditUnions.com.

What Skills And Experiences Do Today’s Boards Need?

The “right” board portfolio of skills and experience continues to evolve. As a reference point, 10 boards recently benchmarked the future representation of skills and 71% of those directors said having a grasp of the business applications of artificial intelligence was either critically underrepresented (30%) or underrepresented (41%). These results were as expected as they were invigorating.

In these examples, board development programs and succession plans were revamped and the boards are well on their way to more effectively engaging in strategic prioritization conversations.

How Will CEO Performance Be Evaluated?

Eventually those conversations should translate into effective and measurable outcomes. Boards are increasingly embracing the criticality of rigorous evaluation processes that both hold their CEO accountable (risk and reward) for historic results and provide constructive feedback for future development and prioritization.

Often, when an organization is performing in the bottom 10% of its peer group, a contributing factor is that the board is unaware of their competitive positioning. Sometimes “goals are set” but loosely connected to the strategy and disconnected from the competitive landscape. The reality is that many boards seek to thrive, not survive. The opportunity is to tie CEO evaluation and compensation to those results.

Is Your Succession Plan Strategic?

Succession planning has always been a hot topic, and the NCUA’s final rule has shifted it to the forefront. From a governance standpoint, strategic CEO succession is the most critical and all-encompassing conversation that occurs because it touches on strategy, organizational performance, culture, governance, and compensation.

Beyond the interim and emergency plan, having a meaningful understanding of executive talent and their upside potential years in advance empowers better decisions today that can drastically improve outcomes tomorrow. Too often successors are brought in because rigorously developing the talent that will lead the organization in the future was not important (in practice) to the board or CEO. Attending conferences or receiving certifications is seen as “development” but is not necessarily the stimulus needed to generate an embodied strategic perspective in future CEO candidates.

Are You Developing High-Potential Talent?

Having a succession viability conversation can be very dignifying for aspiring candidates; they want to know what their candidacy does and does not bring to the table in the board’s eyes. Aspiring candidates  want the time to develop missing skills, perspective, and leadership presence. If they’re not given a fighting chance, then there are other downstream effects.

Beyond that, investments are often only made in identified potential CEO successors whereas other high-performing talent without CEO aspirations might not receive the same kind of stretch assignments. The new CEO then inherits a team that is not as competitive as it could be. A critical governance challenge and opportunity is ensuring the organization is developing the talent it needs in the future.

How Will You Ensure Continuous Board Development?

Combining board development, director self-evaluation, and application of new skills is another strategic opportunity. There are a plethora of board development resources available. The critical governance challenge is how to provide a rubric for hungry learners to evaluate their understanding of the content. Further, providing a platform for experiential learning and application of the learning is essential to deeply understand concepts that are full of nuance.

A timely example is artificial intelligence. Understanding of this technology and its application are greatly enhanced by experiencing its power and potential. General presentations can be less impactful than content tailored to a specific institution that includes real-time examples of how AI is impacting operations and member experience. Boards should prioritize these conversations and intermix experiential learnings over periods of time, as the consequential nature of these decisions is significant. Said differently, conferences are conversation starters — they are not certifications of relevant governance expertise.

It’s a safe bet that the future will bring new and different opportunities and challenges. It’s time to recalibrate and evolve the board’s response pattern to ensure governance practices are effectively enabling the strategy, not hampering it. Simply declaring that the board will have an even more vital role in the future can begin to put energy and resources into action.

Peter Myers is senior vice president at DDJ Myers, an ALM First Company. Contact him at pmyers@ddjmyers.com.

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In my time as president and CEO at Everwise Credit Union ($5.4B, South Bend, IN), a key focus of ours has been to mature, to govern better, and to be worthy of the trust our members place in us. We believe a pivotal part of that journey, one that set the stage for what’s to come, was the adoption of board term limits in 2023.

This is just one story of one board’s recent governance maturity journey. I won’t pretend the journey is complete or that we do everything right. But I am proud of the progress the Everwise board is making and inspired by their commitment to continued development.

What we’ve implemented at Everwise is not a one-size-fits-all model, but I do think every credit union CEO and board chair can use our experience to reflect on their own boards, governance challenges, and opportunities.

Adopting term limits was not an easy or quick decision. It took much deep reflection, hard conversations, and a willingness to look in the mirror. Today, it’s a critical driver behind our board’s journey of accountability and growth.

The Debate Behind the Decision

Our governance journey began, as many do, with some big changes.

A few years ago, a long-serving board member who had served on the board for nearly 40 years stepped down and we had a new board chair for the first time in a quarter century. Around that time, I was hired as the credit union’s fifth CEO in 93 years. I was also the first to come from outside the organization. That shift brought a fresh perspective to a traditionally stable, internally led organization.

The new board chair came in committed to bridge from our past to a new high-performance future. Management helped by setting up a governance operations squad to provide stronger support—a small team of people with professional skills, who know about good governance, and who work full time supporting the board’s effort to operate well.

Debates about term limits began in early 2023 with some of the expected objections.

“What if we lose a great director?”

If you’re afraid to lose one person, maybe you don’t have enough strong directors.

“How do we preserve institutional memory?”

If institutional knowledge lives too much in people’s heads, maybe you need better documentation.

“Shouldn’t we just coach underperformers instead?”

Are we actually doing that? If you don’t coach or remove ineffective directors, then term limits are probably necessary.

The board and our leadership team ultimately realized term limits could serve as a “forcing function” for maturity and pipeline development. We settled on five terms of three years, or 15 years total, and no renominations after age 75.

Get Comfortable With Being Uncomfortable

In mid-2023, our board was facing some ongoing difficulties. Although this was uncomfortable, we needed that. Sometimes we should feel uncomfortable — that tension creates urgency and the will to act.

Myself, my board chair, and the chair of the governance committee began to seriously reflect on how Everwise was performing. We had to ask, “How strong are we, really?”

Adopting term limits helped ignite a shift in our mindset. They forced our organization to:

• Plan Ahead — If you know someone’s rotating off the board in three years, you start building a pipeline today.
• Improve Onboarding — You don’t have 15 years to get a new director up to speed. You have one.
• Clarify Expectations — If a director is underperforming, you no longer kick the can. There’s a clear time horizon.
• Distribute Leadership — No one person becomes irreplaceable. Everyone is expected to lead.

In short, term limits require a board to have more structure, intention, and discipline, and that changes how directors engage with one another, with the CEO, and with the organization as a whole.

It is a two-way street, though. A high-functioning, mature board requires more athleticism from the CEO.

Look, we’ve probably all heard a credit union CEO or two remark that they were glad their credit union didn’t have term limits because, “I’ve got my board where I want them.” Although some part of me I’m not proud of might envy a CEO taking it easy, that’s not what’s best for any credit union. It’s better if the CEO has to hustle, to continuously earn that confidence and trust. Every new director needs to rehire me as the right CEO to lead the credit union forward. That’s a feature, not a bug. It means I can’t get complacent. Term limits create higher accountability for the CEO, too.

It’s OK To Ask For Help (Recommended Even)

During this process, one thing became clear: We weren’t going to figure this all out on our own, and we shouldn’t try.

Just as we expect our members to lean on us when making financial decisions, our board needed an outside perspective to challenge assumptions and expand its toolkit.

We joined the National Association of Corporate Directors (NACD), a move that might seem commonplace in the corporate world but is still rare in the credit union space. This made it possible for our directors to access resources, frameworks, and peer conversations that elevated the way they think about board work.

We also brought in a consulting firm to help us take a hard look at our board composition, skills matrix, succession planning, and meeting cadence through the lens of what our organization would need in the next five, 10, or 20 years. Critically, each board director received individualized 360º feedback on their contributions and development opportunities. It was through this partnership that our board developed the roadmap we’ve been following ever since. The board term limits were just one part of that.

Imagine plotting all your board members on a two-by-two matrix. How many great directors do you really have? (illustrative example).

Now imagine improving director accountability and board governance operations such that individual directors improve and to overall board develops (illustrative example).

Don’t Be Scared To Evolve

Everwise is now among a relatively small group of state-chartered credit unions in the United States that both compensates board members and imposes board term limits.

Between 18 and 22 states currently allow board compensation for credit unions, and federal credit unions can’t compensate or impose formal board term limits under current law. But where it’s possible, I think we in the credit union industry should be asking tougher questions. And, the law shouldn’t be an excuse. Mature, excellent governance is mostly about talent and culture. Any board can be great.

None of this is easy. Our board has stumbled. We’ve had hard conversations. Our journey has required growth by management, too. This isn’t a one-size-fits-all solution. There are some other strong CU boards out there. This is simply our case study in progress.

Don’t Stop Here. Did you enjoy these insights? If you did, I encourage you to join the NACD and buy the book “Building Better Boards” for yourself and your chair. Read that book together and discuss.

The post Board Term Limits Drive Mature Decisions At Everwise Credit Union appeared first on CreditUnions.com.

Today, putting people before profit isn’t just a belief — it’s a strategy that delivers real results.

GLCU has received numerous awards, including for its workplace culture and community impact. From 2019 to 2024, the Chicagoland credit union grew from $886 million in assets to $1.4 billion. During that time, its year-over-year membership growth jumped from slightly less than 5.0% to nearly 30.0%; as of year-end, the credit union’s membership exceeded 100,000. All this despite a worldwide pandemic and the rise of fintech competition that has changed the face of banking.

Pat Price, GLCU’s board chair, says the credit union continuously meets challenges head-on and comes out stronger for it.

“Our member survey results have gone up, staff engagement has increased, and the industry is paying attention to us,” she says. “We were once an ‘also-ran,’ but now we’re leaders in this mission. People are watching what we’re doing.”

New CEO, New Vision

The financial services landscape looks a lot different today than it did seven years ago. But when Steven Bugg took the helm in 2018, he promised industry changes would not weaken the credit union’s resolve to put members first. Indeed, it was his unwavering commitment that helped Bugg land the role.

“When I joined the organization seven years ago, the board was seeking a new direction,” the CEO says. “My predecessor had successfully expanded the credit union, but the board wanted a leader who could deepen community engagement.”

According to Barbara Castleton, vice president of executive administration, the credit union started communicating with Bugg even before he joined, sharing ideas and knowledge and bringing him up to speed. Castleton joined the GLCU team in 2014 and has worked closely with Bugg since he came on board.

“I just knew we were going to reach new heights under his leadership,” Castleton says. “It is a very different leadership style. I love the energy, the motivation.”
Bugg’s first order of business was to redefine GLCU’s strategic direction.

“When I arrived, the credit union had nearly 300 strategic initiatives, which made it difficult to focus,” Bugg says.

GLCU has culled down that list to five Standards of Greatness that extend beyond traditional product and service metrics and provide a framework to focus day-to-day work. Those focal points are especially important in an organization with more than 250 employees who sometimes have very different responsibilities.

“It’s crazy busy,” Castleton says. “But it’s an organized crazy, so we love that.”

The Standards of Greatness also help GLCU ensure leaders make decisions that consistently align with the credit union’s mission.

“Traditionally, when you set out a strategy or strategic plan in a business, you have either a financial or a growth metric you’re trying to achieve,” says Michael Abraham, chief strategy officer. “We have those, but we also want our employee base to complete 4,000 volunteer hours. A social impact lens drives the strategy so much differently than just making sure we make money next year or grow a certain percentage.”

A Meaningful Merger

Just a few months after Bugg took office, GLCU merged with North Side Community Federal Credit Union, an institution that served underbanked residents in the Chicago area.

“That one action set a whole series of things in motion that led us to this point,” Price says Pat Price, the GLCU board chair.

Although North Side Community was a smaller institution, the single-branch cooperative that served more than 3,000 members had a national reputation for serving those of low-to-modest means and operated a grant-funded, HUD-certified counseling pilot program started by what is now Inclusiv.

“At the time, it was the National Federation of Community Development Credit Unions,” says Sarah Marshall, the former CEO of North Side Community who now serves on GLCU’s board of directors and as a supervisory committee member. “It incubated the program but ultimately decided not to continue it. My credit union was one of the few legacy credit unions that maintained the HUD counseling certification.”

When North Side Community considered merger candidates, Marshall says she was determined to ensure the housing program continued.

“A number of credit unions didn’t understand it or weren’t excited about it,” she says. “Great Lakes was eager to take on the program and scale it, which was a big win.”

The merger also brought to GLCU a foundation North Side Community started several years earlier to support other types of funding. Today, GLCU is one of only five credit unions with a HUD-certified counseling program, and it helped prevent $4 million in home foreclosures last year through the GLCU Foundation for Financial Empowerment.

“It has its own staff and is really developing as its own entity,” Marshall says of the blossoming foundation committed to positive change through financial empowerment.

Ultimately, Marshall says GLCU approached the merger as a partnership, one that allowed North Side Community to scale programs and take authority within the new organization.

“Even though it was the surviving institution, it positioned our staff well, treated us with respect,” she says.

An Agency Of Choice

The merger between GLCU and North Side Community took effect Aug. 1, 2019. Less than a year later, COVID-19 disrupted everything — including financial services. But according to Price, GLCU was quick to take action.

“Leaders tested our continuity plan and got ahead of things instead of waiting and scrambling to react,” the board chair says. “They were very proactive in doing everything necessary to keep our members and staff safe while keeping the business running.”

The pandemic gave GLCU the opportunity to enhance its role as a housing counseling agency, facilitating rental and mortgage assistance with government funds.

“We were not a direct funder to the end user,” Bugg explains. “Instead, we worked with the city and state to distribute assistance and ensure people got the help they needed.”​

The credit union itself received government funding to cover temporary staffing to expand its call center, the salaries and benefits of its HUD counselors, and program marketing costs. Even before it could officially offer assistance to the public, GLCU’s website recorded more than 30,000 visits for grant applications, such was the need in Northern Illinois.

“We were chosen as an agency to help those in Cook County and Chicago who were going to get evicted from their homes,” Bugg said.

In its role, GLCU served as a third party working in collaboration with the borrower and lender, who could opt against foreclosure if a homeowner developed a sustainable budget and made on-time payments. It’s a role the credit union continues to fulfill today.

Although the pandemic disrupted financial services, it also pushed GLCU in a positive direction. The credit union has enhanced virtual services to improve accessibility — a shift that remains a part of its long-term strategy — and has developed a reputation as a go-to agency in Chicago and beyond.

No Slowing Down

In 2025, the Great Lakes team is full steam ahead.

“We’re never just working on what we’re currently working on,” says Castleton, the executive administrator. “We’re always thinking about what’s coming next.”

As head of strategy, Abraham says his top priorities include continuing to identify M&A opportunities that align with GLCU’s goals. Most recently, the credit union purchased a Vibrant Credit Union ($1.1B, Moline, IL) branch located in Danville, IL, a rural area with similar financial challenges as Chicago. In addition to gaining $68 million in assets and approximately 6,586 new members, this expansion will allow GLCU to extend its community giveback programs into Central Illinois and Western Indiana.

Additionally, Great Lakes will continue to find ways to manage interest rate challenges.

“The rising rate environment is catching up with a lot of financial institutions,” Abraham says. “We need to ensure sustainable earnings while keeping our rates competitive for members.”

Both Abraham and Bugg emphasize the need for credit unions to do a better job of communicating their value.

“We need to differentiate ourselves from banks by showcasing the tangible benefits we provide to underserved communities,” Bugg says. “The credit union industry must stay focused on advocacy, especially regarding regulatory changes and potential threats to our tax-exempt status.”

The post How Mission And Momentum Have Revolutionized Great Lakes Credit Union appeared first on CreditUnions.com.

“I feel fortunate the jobs I had were focused on giving back and making a difference,” he says. “It’s interesting to me that I stumbled into something I think people later in life want, which is to have an impact in your daily life.”

Although Hendry came to IC from outside the credit union industry, he wasn’t unfamiliar with the cooperative. He spent a decade volunteering with IC, first as a member of the supervisory committee and later as a member of the board. After the former CEO left IC, the board approached Hendry to gauge his interest in stepping into the role, telling him it was looking to go in a different leadership direction.

“I was blown away and appreciative,” Hendry says. “But the more I thought about it, the more I thought it’s similar to what I’ve been doing throughout my career. It’s just doing it in a different fashion for the financial industry.”

Here, Hendry reflects on his journey from industry outsider to cooperative leader, reflections on that transition, moving from working on the board to working for the board, and more.

What initially attracted you to the credit union industry? Did your previous experience influence that decision?

Christopher Hendry: My career to that point had been about asking for money and trying to explain to donors how their financial commitment would make a lasting impact. Now, at IC, I was going to be on the other side. Based on my history in the nonprofit world, I thought I’d be able to have an impact if we could focus on how we committed funds structurally.

The other part of it was having the opportunity to lead an organization, for me to be in not a leadership position but the leadership position. Hopefully, I’d honed my skills during 15 years of various vice-president and leadership positions where I wanted to show that I could lead and make an impact.

I had a mentor at the local university who used to say, “When we make decisions, is it in the best interest of students? If it isn’t, why are we talking about it?” I stole that and say, “Is it in the best interests of our members? And if it isn’t, how do we find a way to make it be?”

Were there things that surprised you about working at the credit union?

CH: I think it would be hard for anybody from the board to really understand what the day-to-day operation is like. By my third month I was more well-versed in what was going on at the credit union than I ever could be by having 150 meetings over 10 years. The board manages the CEO and helps set the priorities for where the organization wants to go, but it’s not actively involved in day-to-day operations and making sure things get done. When you get into the job, it is the camel putting its nose under the tent for the first time. It’s amazing to see how everything is done.

How did your prior experience influence how you work with the board?

CH: Having the background and knowledge of what the board discussed and what we saw from the management perspective, and then seeing both sides, was really an eye-opener for me.

Were there any misconceptions about credit unions that were clarified once you became CEO?

CH: I looked at credit unions like every other financial institution and expected a bit of cutthroat competition. Early on I received a phone call from a leader at a competing credit union who wanted to introduce me to a couple of CEOs. The CEO I met with basically opened his doors and told me everything about his business. I thought to myself, “Am I not now able to steal everything you’re telling me and put it to work?” The answer, of course, is although we compete, we want to be able to collaborate. I thought that was interesting.

After three weeks of those meetings and talking to about seven CEOs who all said the same thing, I thought, “Well, not only do I like what they’re talking about but I can fit in here.”

Four years later it isn’t any different.

What are the cultural differences you’ve seen between education and health care and credit unions?

CH: There were 1,400 people at the university, 15,000 people at the hospital, and 125 people at the credit union. That scale is a lot different when you’re trying to change culture and keep focused on what you’re trying to do. We’re able to be a bit more nimble at the credit union.

How did your prior experience shape your leadership approach in a credit union context?

CH: I had a mentor at the local university who used to say, “When we make decisions, is it in the best interest of students? If it isn’t, why are we talking about it?” I stole that and say, “Is it in the best interests of our members? And if it isn’t, how do we find a way to make it be?”

What aspects of leading a credit union required a completely new mindset or skillset for you?

CH: Not having the financial background of a CFO or a lender, I had to place a lot of trust in my current CFO, who does a phenomenal job and was instrumental in bringing me along. Building that relationship helped me understand that I didn’t have to do everything. As CEO, I had to stop myself from getting too deep because I didn’t want to micromanage. I wanted people to be able to make their own mistakes and come back to me with their own solutions. That was a true awakening for me — trying to shed what I knew and how I worked and adopting new working practices and styles.

What advice would you give to someone considering an executive role in a credit union, especially if they’re coming from another industry?

CH: Jump in. Take the chance. For people outside the industry, it’s mindboggling to see how you can operate in a successful business that has a mission of giving back but still run it like a business. This isn’t a nonprofit that’s worried month to month about how we’re going to make payroll. We know we’re a successful business because we’re a $600 million credit union, but we’re able to leverage that to make an impact in our community. We stand behind that every day. We get to see the impact we’re making. For me, that’s life-altering.

What were you wrong about?

CH: I did too many things too soon. We brought everyone through a comprehensive strategic plan while changing the culture identifying new technology to bring on board.’

That’s a herculean effort to do any of those three things at once, and we did all three of them at the same time. We were successful, but looking back, I put a lot of pressure on the team and it put a lot more work on the table. Having the opportunity to redo that, I think I’d still focus on the same three things, but I might have spaced it out a bit.

This interview has been edited and condensed.

The post Insights From The Outside: Christopher Hendry appeared first on CreditUnions.com.

Despite an uncertain economy and a financial services sector that is ever-growing in complexity, the movement is Fostering Financially Strong Credit Unions for a better tomorrow.

• It’s one thing to have data, it’s another thing to use it. One Florida credit union is deploying small data insights to make a big difference on the balance sheet.
• New accounting standards? No problem. With FASB’s current expected credit loss rule (CECL) finally in place, credit unions are starting to understand its impact and how to manage their books.
• Looking for a deep dive into loan demand? Callahan has you covered with meaningful insights that help leaders refine strategies and make informed decisions.
• If you want to maximize efficiency in the new year, consider taking a page from Firefighters First. The California cooperative embeds specialists across multiple departments to spot opportunities for efficiencies and process improvement.
• Want a better board? Build it! In the past five years, Affinity Plus has established board limits, refined its evaluation process, expanded its pool of potential directors, and improved its oversight. Today, leaders are happy to share lessons they learned along the way.

Now it’s your turn. How has your credit union improved operations in the past year? What did you learn in the process? What changes are on deck for 2025? Drop us a line, and we might feature your story on CreditUnions.com.

Looking for more of the best of 2024? Click the links below to revisit some of the year’s best content from Callahan’s award-winning editorial team.
Best Of 2024: Driving Employee Engagement
Best Of 2024: Supporting Member Financial Wellbeing
Best Of 2024: Building Vibrant Communities

The post Best Of 2024: Fostering Financially Strong Credit Unions appeared first on CreditUnions.com.

Like many people, Juan Jimenez stumbled into the credit union business by chance.

In 2016, he was working in senior analytics role as a reporting consultant for Verizon’s Southwest region, focusing on call center metrics, when he learned his job had been eliminated. That’s when he learned from a friend about a job opening at FirstLight Federal Credit Union for a portfolio analyst.

“I took him up on it,” Jimenez says. “I applied, and I got the position with no experience in credit unions or finance — and immediately fell in love with credit unions.”

Over the past eight years, Jimenez has worked with CFOs, EVPs, CMOs, and lending execs at three large credit unions — FirstLight ($1.6B, El Paso, TX), GECU ($4.4B, El Paso, TX), and SF Fire Credit Union ($1.8B, San Francisco, CA) — who helped him learn the business so he could deliver the right insights.

At each credit union, Jimenez has helped move the needle from analytics reporting to full-fledged business intelligence programs. He joined SF Fire Credit Union 18 months ago as assistant vice president of business intelligence, with the mission of transforming the program — moving disparate data warehouses to the cloud, cleaning and making sense of vast stores of data, and communicating insights with the organization.

“I’ve always been a huge believer that data drives every business,” he says. “It’s such a great feeling being a part of the department that handles the data that helps drive these decisions.”

According to Jimenez, it takes the right people, the right tools, and the right processes to build a BI department and develop a data-driven culture that runs throughout the organization. Here, he provides credit union leaders 10 steps to do that.

Step 1: Define Objectives And Goals

A credit union must clearly outline the objectives and goals of the division to align it with the organization’s overall strategic objectives. This includes identifying the key stakeholders and their requirements for data and analytics.

Jimenez recommends looking at the organization itself. If the major goals are around lending, it might make sense to embed the BI team in the lending and product marketing group. If the goals focus on income, risk, and costs, put the program under the chief financial officer. If data centralization is important, put the BI program under the IT department, he advises.

Jimenez has worked under each of those models and sees advantages in each one.

“Here at SF Fire, we do everything,” he says. “This is the only credit union I’ve been with so far that BI falls under the umbrella of the IT department. It’s great because we have access to great technology and the budget of the IT department.”

Step 2: Assess The Credit Union’s Current State

Evaluate the credit union’s existing data infrastructure, systems, and processes with an eye toward identifying its strengths, weaknesses, opportunities, and threats (SWOT analysis) related to data management and analytics capabilities.

Then, assess the credit union’s current state. What’s the budget? Who does BI staff report it?

“Do you have an existing data infrastructure?” Jimenez asks. “Are you using just what came out of the box with your core system? Do you have any existing processes? Do you have anybody doing any reports? Identify those strengths.”

Many organizations, for example, already have personnel doing analytics for various business units. Those resources might have greater impact as part of a centralized BI team sharing the same tools and processes.

Step 3: Develop A Roadmap

Create a comprehensive roadmap outlining the steps and milestones required to build the BI division.

Define the scope, timeline, budget, and resources needed for each phase of the project. The size of the credit union and the budget it’s willing to commit to BI will affect key decisions about the roadmap. For example, a fully functioning BI team needs analysts, database administrators, architects, engineers and data scientists. The job market for these roles is highly competitive. Big Tech firms such as Google, Meta, and Microsoft pay up to $250,000 for technical resources.

“For credit unions, not-for-profit organizations, it’s difficult for us to compete with the bigger institutions,” Jimenez says. “It’s even more difficult for the smaller credit unions to hire talent that can drive that transition. The board has to approve the positions, and the CEO has to create the positions and the pay scales. Sometimes it’s hard to convince folks that you need an engineer, and that engineer is not the same as the architect, and the architect is not the same as an analyst.”

Even the BI tools a credit union chooses can affect its roadmap, he adds. Tableau is one of the most popular tools used for data analysis and visualizations, but finding skilled analysts to use the software can be challenging. Many smaller organizations might be better served with Microsoft’s Power BI tool, he says, because the software comes free with Office 365 licenses.

Step 4: Establish A Governance Framework

Define data governance policies, standards, and procedures to ensure data quality, security, and compliance. Establish roles and responsibilities for data management, including data stewards and data custodians. Don’t be discouraged if the BI team faces competing demands and shifting priorities from various parts of the business.

“Once you have a governance framework, it’s harder for anybody to be upset over how you’re running the department,” Jimenez says. “You have clearly defined responsibilities for everybody.”

Step 5: Build The Data Infrastructure

 Invest in the necessary technology infrastructure to support BI initiatives, including data warehouses, data lakes, ETL (extract, transform, load) tools, and BI platforms. Ensure scalability, reliability, and performance of the infrastructure.

Step 6: Integrate And Manage Data

Integrate data from disparate sources across the organization to create a single source of truth. Implement data quality processes to ensure the accuracy, completeness, and consistency of the data.

Integrating data from other systems such as credit card processing or separate mortgage or lending applications is important for getting the whole picture for analytics.

Step 7: Develop Analytical Capabilities

Train staff on BI tools and methodologies and build analytical capabilities within the BI division, including data modeling, data visualization, and advanced analytics such as predictive analytics and machine learning.

Jimenez says one of the most powerful reports he used in El Paso helped predict when members dealing with financial problems needed early intervention by collections. By assigning a point value to members for lower-than normal checking account balances and higher-than-normal credit card balances, the system can show when the borrower is late but not yet in delinquency. A representative can call the borrower and offer to skip a payment for a modest fee.

“You have a member that’s happy because the credit union reached out to them to offer help,” Jimenez says.

But that’s not all.

“You potentially made a couple hundred dollars or thousands of dollars in fee income during a time when there are no deposits. You still grow that interest income, your delinquency ratio is low, and you have less of your membership going into delinquency,” he adds.

Step 8: Foster A Data Culture

Promote a data-driven culture within the organization by educating stakeholders on the value of data and analytics. Encourage collaboration and knowledge sharing across departments to leverage insights for decision-making.

Jimenez says fostering a data culture across the organization is his favorite part because the availability of data across multiple departments helps spur collaboration throughout the enterprise.

“When you have a meeting with your heads of departments and they all know what the data looks like for everybody else, it’s easier to make decisions,” the AVP says. “You get less pushback on these decisions.”

Step 9: Focus On Continuous Improvement

Monitor and measure the performance of the BI division against predefined key performance indicators (KPIs). Solicit feedback from stakeholders and adapt the credit union’s BI strategy as needed to address evolving business needs.

After creating the reports and visuals, however, the job isn’t done. The BI team should continuously monitor success against KPIs and ensure the metrics are addressing the right questions. A good practice, Jimenez says, is reviewing which reports are being used and which ones are gathering dust.

“If I see the report hasn’t been used in two weeks, I will email the end user and say, ‘Hey, I noticed you didn’t use the report. Are you focused on something different now? Would you like me to change the report? Is there something wrong with the report that no longer fits your needs or the needs of the department? Can I help to make this report more useful for you again?’” Jimenez says.

Step 10: Communicate The Results

Communicate insights and findings derived from BI initiatives to key stakeholders in a clear and actionable manner. Demonstrate the value of BI investments through tangible business outcomes and return on investment (ROI) analysis.

For example, if members are transacting more business through the mobile app, the data might justify the credit union investing more in mobile banking. If the data shows call center volumes are up and branch visits are down, perhaps the credit union could invest in call center staff and tools or consider reducing branch hours.

“It’s not just about profit or lending or collections data, it’s about having transaction data on your members to know how they’re spending their money,” Jimenez says. “If you’re going to have a rewards credit card, where do you want to put those rewards — in groceries or fuel? What are your members doing? How are they transacting? We’ll have of this information with good business intelligence.”

The Future Of Analytics

The past is littered with poor decisions made without checking the data. Jimenez recalls a Texas credit union that had just opened its first virtual branch in a growing part of town. The branch was so successful the credit union decided to retrofit another branch across town with interactive teller machines.

That branch across town, however, supported older neighborhoods. In fact, a nearby retirement home regularly brought residents to do their banking at the branch. Without warning, the credit union was flooded with calls from members who didn’t know how to use the ITMs. The credit union dispatched customer service representatives, and years later, they’re still staffing that virtual branch.

“If they had a report of the demographics of who transacts here — and the age groups of the members — they could have said, ‘Hey, we should probably not touch that branch,” Jimenez says.

For more than a decade, analysts have dreamed of the “democratization of data” — when anyone in the organization can pull the information they need to get insights. The tools, however, are still too complex for most employees to create their own reports. But that’s changing with the emergence of generative AI tools such as ChatGPT, Jimenez says.

Jimenez already sees promise in ChatGPT creating queries that can be created through a conversation with the chatbot and then plugged into analytics tools. It’s only a matter of time before employees outside of the BI team will be able to access their own data through an AI bot, he predicts.

“It’s really exciting that other people are going to be able to do queries as much as I do,” the AVP says. “Conversational AI is going to be huge. You might even get ideas from an AI model. For example, you might tell it your collection ratio is high this month, and it might say, ‘Have you considered this?’ No, I hadn’t considered that. How can I go about implementing it? ‘Here are 10 ideas on how you can do that today.’”

What Can You Learn From Like-Minded Leaders? Credit unions are responding to new challenges — including how to create a data-driven culture — using expertise from one another. Callahan Roundtables put leaders in the same room to share solutions, solicit feedback, pose questions, and more. Inspiration is a Roundtable away. Learn more today.

The post 10 Steps To Better Business Intelligence appeared first on CreditUnions.com.

I’m seen as someone who has been pushing the credit union ideal of serving people who are left out of the financial mainstream and doing it against the odds, and I’m proud of that.

After more than three decades at the helm of One Detroit Credit Union ($69.4M, Detroit, MI), Hank Hubbard is preparing to leave the only credit union leadership role he’s ever held.

Hubbard — who will be succeeded by Portia Powell, the credit union’s first Black and female chief executive — has led the cooperative since 1991. Back then it was still known as Communicating Arts Credit Union, rebranding as One Detroit in 2015. Hubbard was running a computer consulting firm in the 1980s and says the credit union’s then-CEO “just decided I needed to be in credit unions.”

Hubbard’s time in the hot seat has coincided with a massive shift within the city of Detroit. For example, only a few credit unions are headquartered in the city today compared to more than 30 in the early 1990s. Many of the problems that plagued Detroit then, such as crime and poverty, are still present, but downtown also has undergone a major revitalization in the past decade. Unfortunately, other parts of the city haven’t benefited from such efforts. That’s why Hubbard has made it his mission to make life better for all Motor City residents.

Here, he reflects on his time in credit union leadership, why Detroit’s fortunes have been a personal calling, his legacy in the industry, and more.

How has the industry changed during your career?

Hank Hubbard: It’s a lot smaller, which is a combination both of financial institutions leaving the city and the consolidation of our industry. But it’s also less collaborative than it used to be. Back then, credit unions had a defined field of membership, and, for the most part, there was little competition.

When does your retirement take effect?

HH: I retire from my CEO position at the end of the year, and I’ll stay on [until June 1, 2025] in an advisory role to help the transition and do whatever my successor wants me to do. I’m at her beck and call.

Did you have a mentor? What was your biggest takeaway from that experience?

HH: I’ve had lots of them. If you look at my whole credit union career, it’s Dean Trudeau, CEO of Public Service Credit Union ($425.4M, Romulus, MI). He’s not that much older than me but is still working, and I’m retiring before him.

The credit union industry makes it easy to collaborate. We’re friendly with one another just networking, spending time together, and sharing experiences. I can’t imagine that happening in any other industry … bankers just don’t do that.

What was it like running a credit union focused on Detroit during some of the city’s lean years?

HH: I’m from Grosse Pointe, which is one street over from Detroit, so I grew up here. It was a vibrant city when I was young in the 1960s but was on a downward path probably until after the year 2000.

Dan Gilbert, the owner of Quicken Loans, saw an opportunity to take on Detroit as a project, move all of his companies here, and invest in making it a fun place. He turned abandoned buildings into living spaces, which we’ve never had downtown. We’ve gotten great restaurants, and it’s been wonderful, but the people we actually serve who don’t live downtown are being left out because all the investment is happening in the central business district. So, our space is to try to help people in the communities where they are left out.

What kinds of initiatives did One Detroit undertake to help lift up the city? Why was that important?

HH: You need to have a car in the Motor City. We don’t have good public transportation, and owning a car is really expensive — not only buying it but also paying for insurance. I think we’re in one of the highest car insurance markets in the country. We found people were getting into car loans at predatory rates. The max in Michigan is 25%, and we were seeing loans at 20% and 25% fairly often. Under normal underwriting, we couldn’t do anything about it because they also were underwater; they owed quite a bit more than the book value of the vehicle. So we came up with a program called Refi My Ride, which refinances loans at half the rate they’re currently paying and will go above 100% LTV. We went as high as 140% on one exception.

That takes someone who is paying 20% down to 10%, which is breathtaking. We save members an average of $65 a month, but for some people it’s like $300 a month because they bought more vehicle than they can afford. We’ve saved members almost $10 million in interest that would’ve gone to other lenders but instead stayed in our members’ pockets and in the community. We help people get out of predatory situations and still make it profitable for us — it’s an everybody-wins situation.

What makes all of this so personal for you?

HH: Growing up, I wasn’t exposed to people who were different from me until I went to college at Bucknell University in Pennsylvania. Then I moved to Orlando, where lots of people were different from me, then I moved to New York — Manhattan and Queens — and I’m on the subway with all kinds of people different from me.

We’ve got a pretty diverse population in Detroit, mostly Blacks and whites but also fairly significant Hispanic, Asian, and Arab communities. But it’s very segregated; they don’t mix very much. The losers in that transaction are the African Americans who were mostly left in Detroit [after the city’s exodus of the late 20th century]. I wanted to try to bridge that gap a little bit.

When the credit union had an opportunity to expand its field of membership to include anybody in the community, our board was very supportive. I kind of got my dream come true when we were able to expand and work directly with people in the city.

The Exit Interview series features parting thoughts and wisdom from influential leaders in the credit union movement upon their retirement. Read the whole series on CreditUnions.com.

What’s the best advice you have for new CEOs?

HH: I don’t like to tell people what to do, but I don’t mind giving insight. One thing that has made my life easier is nurturing positive relationships. Lots of times I see CEOs fighting with their boards — that’s not good for anybody. Nurture relationships with your board and do the same thing with your examiners. Find something to like. Your examiners and your colleagues are an invaluable source of information. Don’t try to do it all yourself. There are people out there like me who like to talk about their challenges and offer advice.

What’s next for you after retirement?

HH: My wife and I want to travel. We’ve never had more than a couple of weeks to go anywhere, so we’re going to try the other side of the world for a little while.

I’ve gained an awful lot of experience in serving the underserved and using grant funding, so something might come out of that, but I don’t know what and I don’t know where to look for it. I’m pretty excited to just decompress. With 30 years of working on the same project, you accumulate a lot of things to worry about. I want to flush that out of my system before I jump back in.

How do you hope to be remembered at One Detroit and across the industry?

HH: Since my retirement announcement, there’s been an outpouring of really nice comments to me —  emails, comments on social media posts, and stuff like that. I’m seen as someone who has been pushing the credit union ideal of serving people who are left out of the financial mainstream and doing it against the odds, and I’m proud of that. I know in Michigan I’m seen as someone who showed others what was possible, and I’m happy with that as my legacy.

This industry has allowed me to be a good guy and be successful in that. It doesn’t feel like there are a lot of industries where that can happen, and I’m proud of that.

This interview has been edited and condensed.

The post Exit Interview: Hank Hubbard, One Detroit Credit Union appeared first on CreditUnions.com.

Top-Level Takeaways

• Affinity Plus Federal Credit Union introduced term limits for board members in 2019.
• Board members may serve up to 12 years to ensure a regular infusion of new perspectives and skills, enhance governance and strategic capabilities, and improve engagement and diversity.

Affinity Plus Federal Credit Union ($4.2B, Saint Paul, MN) is reaping the benefits of board governance changes it instituted in 2019. That’s when the Twin Cities cooperative established term limits for its nine volunteer directors.

“Term limits had been a topic of discussion for us for quite a while,” says Dave Larson, president and CEO at Affinity Plus. “We would go to conferences and people were speaking in favor of it but at the same time and place were honoring people who had been on their board for 45 years. It was counterintuitive.”

During a fall planning session in 2018, a board governance expert — Professor Richard Leblanc from Canada’s York University — told the credit union board anyone who had served more than 12 years needed to leave, Larson recalls. After that, the board created a policy for term limits — four three-year terms for a total of a dozen years.

Uncomfortable Tension. Then, Celebration!

At the time, Affinity Plus had some long-tenured board members —  including directors with 39, 22, and 18 years of service.

“There was an uncomfortable tension in the room,” Larson says.

One of them resigned the next day; another one left after the next annual meeting, with a year left in his term. They were not pleased with the board’s decision; however, not all the feelings from outgoing board members were negative, nor were they unceremoniously shown the door. In fact, Affinity Plus held a celebration at its fall board meeting to express appreciation for their service. Amid heightened emotion and a few tears, the group shared stories about the outgoing directors and recognized the successes the credit union enjoyed during their tenure.

The board did briefly consider advisory status or emeritus roles for long-time directors, Larson says, but Leblanc had made it clear that 12 years is plenty for an organization the size and structure of Affinity Plus. Ultimately, the board agreed.

“I think the board managed the process effectively,” Larson says. “As people have termed out over the past few years, they told us they enjoyed being on the board and none said we should change that decision. They believed it was the right move.”

New Continuity, New Perspectives

Today, the board’s most veteran member is at 11 years; another is at seven. They are helping to preserve continuity and institutional memory while turnover helps to bring in new perspectives on a regular basis. That’s helped the board provide more engaged, dynamic representation for a member-owned cooperative riding a long wave of change itself.

When Larson became CEO in 2013, membership at Affinity Plus was dominated by state employees in the metro area, Larson says. Today, however, the credit union’s membership spans the state. And since the term limits, the board has added members from south and north Minnesota as well as the metro area.

“Our board is now far more diverse in geography, background, work experience, industry, and professional roles,” Larson says, noting four of the board’s nine members are from traditionally underrepresented communities. “We’re benefiting from a lot more diversity in the thought they bring.”

Mark Your Calendars! Discover more best practices and learn from the successes of this dynamic cooperative in Anatomy Of Affinity Plus Federal Credit Union, coming soon to Callahan clients. For more in-depth credit union case studies and other exclusive client content, visit the Callahan Client Portal today.

Tapping A Talent Pool Numbering 260,000

The new board governance effort also includes biannual evaluations of the board and the CEO.

“They use a governance consultant to help them take a look at their performance individually and collectively, and of mine,” Larson says.

Although Larson is not privy to those interactions, discussions with his chair indicate board evaluations include skills assessments and matrixes that help identify areas of strength and needed improvement for the board. For example, the need to find directors with marketing or artificial intelligence experience.

To source potential new directors, the board is casting a net that extends far wider than a newsletter or word-of-mouth to include postings on social media such as LinkedIn.

“We have more than 260,000 members,” Larson says. “Within that, there’s a lot of talent and people who want to serve. Now, we’re finding the best ways to find them.”

According to the CEO, the response has been much more expansive than in the past, which has helped the board’s nominating committee build a strong list of candidates to ensure a good fit for the credit union as well as the board.

New Skill Sets, Better Engagement

When new directors join the board, they have a mentor that helps onboard them and provide a thorough understanding of the credit union’s not-for-profit business model, strategies, values, and principles.

“We want them to be mindful of who and what we are and aren’t as a member-owned financial cooperative,” Larson says. “From a governance perspective, the results have been impressive. The board is a lot more engaged in looking at governance policy itself and at specific committees, including adding some.”

One new committee, for example, is looking at how to create board packets for more successful meetings, whereas another is looking at how to refine executive leadership elections for the board.

“They’re trying to look at it from both a governance and strategic view,” Larson says. “That’s something we’ve not done before.”

Why Change Things Up?

According to Larson, some other credit unions have reached out to ask about his credit union’s experience with term limits and are considering whether it’s something they want to do themselves.

“I feel like it might be kind of a drum beat for it, but I’m an advocate for them,” he says.

That’s despite the natural inclination to not fix what isn’t broken.

“Back in 2019, we were doing well and having a lot of success, so you’d think, ‘Why change things up?’” Larson says. “But I can tell you our board conversations are now a lot more rich, a lot more dynamic, and with a lot more inquiry and curiosity. I think that’s positive.”

— This article originally appeared on CreditUnions.com on March 25, 2024.

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