There has been a great deal of discussion recently about the future of smaller credit unions and whether institutions under $300 million in assets can realistically survive in today’s financial environment. As mergers continue across the country, many people are questioning whether smaller credit unions can continue to exist in a meaningful way.

I believe they absolutely can – but only if we remember what credit unions were originally created to do and are willing to evolve without losing that purpose.

There has also been significant conversation surrounding regulatory relief and proposed deregulation efforts at the federal level. While those discussions are encouraging, I honestly have not yet seen meaningful deregulation that materially changes the day-to-day realities facing smaller credit unions.

I do believe some deregulation could help operationally at the margins. Reduced paperwork burdens, more flexibility in field-of-membership interpretation, streamlined reporting, less duplicative examination focus, and additional flexibility for innovation partnerships are all positive developments.

Those things matter.

But I do not believe deregulation alone will save small credit unions.

The biggest pressures facing sub-$300 million institutions are structural. Technology costs continue to rise. Cybersecurity expectations become more demanding every year. Talent acquisition and succession planning are becoming increasingly difficult. Compliance complexity now comes not only from regulation, but also from vendor management, fraud threats, litigation exposure, and growing consumer expectations.

Even if regulations were significantly reduced tomorrow, many institutions would still struggle without strategic clarity, execution capacity, operational rigor, collaborative partnerships, and strong leadership succession planning.

Where I do believe regulators and the industry could make a major difference is in supporting collaborative solutions before institutions become critically distressed. Shared-service models, collaborative operational frameworks, management agreements, stabilization programs for struggling small credit unions, succession transition assistance, expanded CUSO opportunities, and earlier intervention support could help smaller institutions remain viable while still preserving local service and community relationships.

Too often, intervention comes only after problems have compounded to the point where merger becomes the only realistic option.

And that leads to another conversation our industry needs to have honestly.

Not all mergers are bad. In some situations, merger is absolutely the right decision for members. There are times when combining resources creates greater long-term stability and stronger member services.

But the industry also needs to stop treating mergers as either failure or victory.

I believe there are situations where larger credit unions have begun viewing mergers primarily as a growth strategy. When the focus becomes absorbing smaller credit unions simply to increase asset size, market share, or membership numbers, we risk losing sight of the cooperative principles the movement was founded upon.

That should concern all of us.

The credit union movement still has enormous growth potential without eliminating smaller institutions that are already serving their communities well. Nearly half of Americans still do not belong to a credit union. Instead of competing to absorb one another, we should be working cooperatively to reach those individuals and families who remain outside the credit union movement altogether.

There are still millions of working families who need affordable financial services, financial education, responsible lending, and trusted financial relationships.

That is where the opportunity is.

Historically, credit unions were created around a common bond – a single employer group, a profession, a union, a church, or a closely connected community. They were designed to serve working families and individuals who were often overlooked by traditional financial institutions.

That common bond created something powerful: understanding.

Credit unions knew the people they served because they lived and worked alongside them. They understood their struggles, their financial realities, and the challenges unique to their communities. They were built around relationships, not simply transactions.

I believe that still matters today.

Large financial institutions can provide scale and efficiency. But smaller credit unions provide something equally valuable – trust, accessibility, personal connection, and the ability to truly know their members.

A smaller credit union often understands when a member is going through a temporary hardship rather than a long-term financial collapse. They understand local economies, local industries, and local realities. They are often willing to look beyond a credit score and see the person sitting across from them.

That human element cannot be replaced by automation.

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And in many ways, that proximity to the member experience is the true strength of smaller credit unions.

For many families, a credit union may be the first institution that teaches them how to establish credit responsibly, purchase a reliable vehicle, buy a home, save for emergencies, or begin building long-term financial stability. Sometimes the most important thing a credit union provides is not just a loan – it is education, encouragement, and the belief that financial stability is possible.

That matters tremendously, especially when we talk about underserved communities and the continuing generational wealth gaps that still exist in our country.

At the same time, smaller credit unions cannot survive simply by relying on relationships and tradition. They must also be smart, disciplined, and adaptable.

At under $300 million in assets, every investment matters. Every employee matters. Every member relationship matters. Smaller credit unions have to think carefully about how they allocate resources, implement technology, manage risk, and prioritize services.

But one of the greatest advantages smaller credit unions still possess is something many larger institutions struggle to replicate: the cooperative spirit itself.

The cooperative nature of credit unions is their superpower.

Smaller credit unions can often move more quickly, listen more carefully, and respond more personally to the needs of their members. They are nimble enough to recognize problems early and creative enough to develop practical solutions that fit the lives of the people they serve.

And many of the best ideas come not from strategic planning sessions, but simply from listening.

For example, we recognized a need among many of our first responder members who struggled with the upfront costs associated with uniforms and equipment required for work. Traditional lenders often did not understand the urgency or importance of those expenses. So we created practical lending solutions specifically designed to help meet those needs.

We have learned similar lessons with technology.

Like many institutions, we invested in tap-to-pay card technology because we believed that was what members wanted. But what we are increasingly hearing from members is that many of them are perfectly comfortable simply loading their card into their digital wallet and using their smartphone or smart device for tap-to-pay functionality.

In hindsight, that feedback may have allowed us to approach the solution differently and avoid some of the expense associated with upgrading the physical cards themselves.

That is an important lesson for smaller credit unions.

Innovation is not always about implementing the newest or most expensive technology. Sometimes it is simply about understanding how members actually prefer to interact and finding the most practical, cost-effective way to meet that need.

That ability to listen, adapt, and respond quickly is one of the greatest strengths smaller credit unions still possess.

I also believe the future of smaller credit unions will depend heavily on collaboration rather than isolation.

Small credit unions cannot always afford to independently build every solution they need. But together, they can accomplish remarkable things. Shared services, strategic alliances, consortium models, management agreements, and cooperative operational partnerships may become increasingly important for long-term sustainability.

In many ways, this is exactly what credit unions were founded upon.

One of the best examples is shared branching. Credit unions found a way to cooperate with one another to expand member access and convenience without every institution having to independently build massive branch networks. That cooperative mindset remains one of the most unique and powerful aspects of our movement.

I believe the future belongs to smaller credit unions that are:

• mission-driven
• operationally disciplined
• collaborative
• technologically practical
• strategically focused
• deeply connected to the people they serve
• willing to rethink traditional structures when necessary

The cooperative model itself is still incredibly powerful.

But the operating model around it has to continue evolving if smaller credit unions are going to thrive for the next generation.

The future of the credit union movement should not be determined solely by asset size.

It should be determined by impact.

If we truly believe in the cooperative mission of credit unions, then we must continue supporting institutions that remain committed to serving people who are too often left behind by the traditional financial system.

Because at its core, that is what credit unions were originally created to do.