Better, not just bigger: How credit unions grow without losing their way.

“The one who loves walking will walk further than the one who loves the destination.” – Di Stefano

If you lead a credit union today, you know the feeling. Before you finish your first Americano, the industry has already told you everything you are doing wrong.

A white paper says whoever wins the technology race wins everything. A LinkedIn post reminds you that more than half of credit union CEOs will retire within six years. A conference agenda arrives, and the packed session is on buying a bank, because a record 22 credit unions announced bank deals in 2024. And somewhere out there, an AI agent is waiting to take your job and steal your lunch money. Just another typical Wednesday, right?

Every one of those voices’ points at a destination. Get bigger and get there faster. I have sat in those board rooms, and I understand the pressure. But the noise is drowning out the promise that started this movement. That promise was always about the walk.

A Warning From 1938

In 1938, Roy Bergengren wrote a small book called Soul. Edward Filene hired him to build credit unions across America, and he did it one town and one meeting at a time. Few people in our history loved the walk more. He described credit unions in simple terms: working people helping each other climb to places they never believed they could reach.

He also saw what was coming. As credit unions grew, he warned, people would tell us we needed an expert for this and an expert for that. His answer was blunt: “We must not get lost to accountants, and lawyers and bankers.” Now, I am a banker, and I have worked beside accountants and lawyers with big hearts. So do not get hung up on titles. Bergengren meant that we can never let the financials become more familiar than the faces of the people we exist to help.

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Drift Never Feels Like Drift

Pilots and sailors use a simple rule of thumb. For every 60 miles you travel, a one-degree error puts you about one mile off course. Sail from Boston to Dublin, roughly 3,000 miles, and that one degree grows to about 50 miles. Nobody on deck feels a thing, yet you completely miss the harbor you set out to reach.

Mission drift works the same way. It starts with a decision that sounds good and is off by a single degree. It arrives in a stylish blazer with a polished deck, and it sounds like progress right up until the day our members cannot tell us apart from the bank down the street.

Consider a recent piece from Russell Reynolds, From Continuity to Culpability. It is right that boards own succession. But it describes tomorrow’s CEO in the language of platforms, ecosystems, velocity and constant reinvention. These are real skills. But you can chase the right thing the wrong way. Speed is a gift when you are on course. When you are one degree off, it just gets you lost faster.

The Math Nobody Puts on the Slide

More than 140 million Americans belong to a credit union. Yet only about 15 percent call a credit union their primary financial institution, and McKinsey found that share has barely moved since 2015.

I saw this up close at a credit union I advised. The executive team had set a goal of $10 billion in assets in five years, and the plan called for 200,000 new members. On paper, it looked bold. Then we looked closer at the 300,000 members they already had. Only 13 percent used it as their primary financial institution. Eighty-seven out of every hundred people who already trusted them with something were ultimately sending their paycheck somewhere else.

So, I asked the room a question. Picture two credit unions, both at $10 billion. The first has 300,000 members, and 75 percent of them call it home. The second has 500,000 members, and only 13 percent do. Which one would you rather lead?

Both hit the number. But only one is the credit union Roy Bergengren spent his life walking this country to build. I was asking them to think better, not just bigger.

Moving from 13 to 30 percent primary would mean earning the full relationship of about 51,000 people who already carry your card, somewhere tucked behind the one from their main bank. The growth plan needed four times that many strangers, at full acquisition cost. Why chase strangers when your neighbors are already in the building? Meaningful asset growth is the side effect of member obsession, and that means all of our members, not 13 percent of them.

Most asset growth comes from the easy work. Raise a certificate rate, put up a billboard, and the money shows up. The hard work is turning partial members into primary members, and the math favors it. In fact, we have already lived this. In early 2023, rate-sensitive funds grew at an annualized 57.9 percent while relationship shares, our cheapest and most loyal money, declined. Many of us booked loans at low rates, then paid up for deposits to fund them. The assets came, but the relationships did not. It is the cost of partial membership strategies, and we are still paying for it.

Five Ways to Stay on Course

1. Change the scoreboard. If the board deck opens with total assets, the organization will chase total assets. Open with primary membership, measured by behavior: where their paycheck lands and where their bills get paid. Then save your best certificate and loan rates for members who bring their paycheck. Quality assets will follow.

2. Grow from the inside out. Your best prospects are already in your core. Call the 5-year CD member whose paycheck lands at a competitor bank before you spend a dollar on a stranger. Chances are they could use a new back deck, or second home by the water.

3. Point AI at the moment, not just the expense line. Use it to spot moments in transaction data, like a first paycheck from a new employer or a growing payment to another lender. Then reach that member personally. AI finds the moment. A human shows up for it.

4. Test every growth strategy against the member. Before the next charter expansion or platform contract, ask how many existing members it will move from partial to primary. If the answer is minimal, the growth is decoration on an annual report. When you hire leaders to make these calls, remember that velocity can be taught. Conviction cannot. I wrote more on this in Lighthouses, not skyscrapers.

A Special Note on Commercial Lending: The Next Big Risk of Mission Drift

I have spent much of my career in business banking, so let me say this plainly. Commercial loans are not a Band-Aid for weak asset quality in a consumer or mortgage book.

It usually starts with investment real estate, because those deals are the easiest to find. That does not make them the best to own. Many national banks are cutting their commercial real estate exposure right now, on purpose. So, when a broker copies your credit union on a $10 million deal, it is rarely because you are the best-kept secret in town. More often, seasoned bank lenders already passed, and the broker knows many credit unions will say yes to what is, at best, a hard money deal. They are playing us for fools. Yes, I said it. Those loans rarely bring deposits. They look good for a couple of years, until the risk the seasoned lender saw on day one shows up as a large loss. If we keep getting this wrong, it could cost us more than the last rate cycle did.

Done right, business banking may be the biggest growth lever we have. Start with the Main Street businesses that employ your members. Give them simple deposit and treasury products and hire relationship managers who already know the business owners in your town. It takes longer than booking a loan off a broker’s email list. But those owners are our neighbors, and their payrolls are full of our members.

Love the Walk

The asset milestone is a destination. You can reach it and feel nothing, because most of the people who got you there could not tell you why they bank with you. The walk is the member who came in for a car loan and, several months later, runs her paycheck and her small business through you because you kept showing up. It is slower. It is also the only kind of growth that does not ask a credit union to become something else to get there.

Roy Bergengren walked this road before any of us, and the people he met along the way were the whole point. So fall in love with the walk. The destination will still be there. And this time, your members will be standing in it with you.