Historically, the credit union was one of the few employers where a candidate could—at least in theory—progress all the way from the teller line to the corner office.
But those days are largely gone, and as more and more baby boomers leave the job market, many top-level positions at credit unions are being filled by what might have once seemed unthinkable: former bankers.
What's behind that shift? For the bankers, said Deedee Myers, founder and CEO at executive recruitment firm DDJ Myers, it's a desire to move to a potentially more relaxed work environment, combined with being "tired of the focus on the larger bank mentality of profits at the expense of people."
"These candidates seek a better quality of life and might be at the stage where the allure of stock options is outweighed by the quality of relationship and service of membership," she told Credit Union Journal, adding that the potential for more time with family is also a draw for some.
According to Chuck Fagan, president and CEO at Credit Union Executive Society, the bankers-to-CUs trend really began in 2013 and is likely to continue until approximately 2017.
"There was pent-up demand coming out of the recession where some people had to pull back retirement plans because of the downturn," he said, adding that CU trade publications are filled each week with news of more executives stepping aside.
Volume is Driving Trend
"I think the volume itself probably has created the need to go outside [the credit union movement] just because there are so many opportunities," said Fagan, who is also preparing for a career change, as he departs CUES to return to PSCU to become CEO of the CUSO. "If a CEO goes, you may have a CFO go. You may have that trickle effect, so there's more opportunity in those C-suites available, and with that volume it's natural to have to look outside." He added that the changing nature of the credit union business demands more than ever that the best people be at the helm, regardless of where they come from.
Myers noted that even though many longtime bankers have a deep understanding of product profitability, branches, service and more, "we hear from many credit union board members that culture is key and that many bankers will not be able to adjust to it."
According to Fagan, CU boards play a crucial gatekeeper role in the process. When executives leave the organization, he said, "the board really has to decide 'This is where we want to take the credit union and these are the skills in the individual that we think can move the organization to that level.' The board really has to outline what they want, provide that to the recruiter, and those recruiters have databases of candidates."
Fagan added that it's just as much up to the bankers whether or not they can make the switch. "You'd expect as they research and evaluate whether nor not to get into a search that they have a pretty good understanding of [the difference between bank and CU cultures] coming in."
Many longtime credit union CEOs — including some with experience in the traditional banking sector — said there's no reason the transition can't be a successful one, but emphasized that a successful transition is as much about a candidate's philosophy as it is a particular skill set.
"I guess it depends on the organization and the people," noted John Holt, CEO at Nutmeg State Financial CU in Rocky Hill, Conn. "We have people that work in our executive management team, myself included, that have worked for both. I worked for a large commercial bank in Albany, N.Y., and then went to a credit union and I've been at a credit union ever since. I'm very passionate for credit unions and I wouldn't trade it for the world. I think there's a good cause there. There's a very large population of people missing out on this particular type of financial institution."
Joe Brancucci, CEO at Tampa-based GTE Financial, is a former banker himself, having left the for-profit banking industry more than 25 years ago. GTE has made a name for itself in recent years by being innovative and ignoring the traditional CU playbook, but Brancucci said that bringing in outsiders isn't always a slam dunk.
"There are some people we've brought to our executive team with great ideas, great passion, but they can't get into the credit union mindset," he said. Brancucci added that while some former bankers may know a lot about how to run a profitable business, sometimes the shift to a people-helping-people philosophy is too big a gap to bridge.
"Sometimes we make decisions, and if you look at them on the surface you might say 'Why the heck did they make that decision? It doesn't make business sense.' If you make decisions based on what's right for the members and the membership, that's a different decisioning process. And the higher up they go in the organization, the worse that becomes if they're not able to make that transition."
But Brancucci was also quick to point out that a traditional banking background can bring in new perspectives CUs wouldn't otherwise be exposed to.
"There are some incredible CEOs in the credit union industry doing some innovative credit union-like things who came from the banking sector, so you can't use a broad brush," he said.
One CEO, however, noted that for as much as bringing in bankers can give an outside perspective, bankers and CU execs have a lot more in common than they are given credit for.
"I don't think whether or not you were at a bank defines the way you do business," said Alan Prindle, CEO at Power Financial CU in Pembroke Pines, Fla. "I don't sign on to this theory that if you come in from a bank to a credit union you're going to change the way things are done. Quite honestly, as a banker many years ago, we faced the exact same problems and management issues the credit unions did, and we didn't sit around thinking of how can we hurt the consumer or make more money or be greedy. We were fighting the same issues the credit unions did: how do we maintain customer loyalty, grow the organization [and] deal with regulatory challenges."
But PSCU and CUES's Fagan noted that there is also a very specific CU learning curve for bankers that longtime credit union executives don't face.
"You really have a harder job where those people come in from the outside, because they don't have the experience of 'What's CUES? What's CO-OP? What's PSCU?' So their allegiance to some of those credit union organizations may not be as strong as somebody who came up in the credit union industry, and the staff at the credit union has to be able to adapt to that shift as well."
Myers noted that while culture is pivotal to CUs, "I also believe that we, as an industry, are at a time where a paradigm shift is needed in how we think. My hope is that the industry becomes more open minded, rather than just saying no without exploration of alternatives. The answer may still be no, yet the open-minded process enhances critical thinking and problem solving skills. Bottom line, if we open up our mindset to consider the very best candidate, regardless of bank or credit union, then we will have a more informed decision-making process."