Membership is diversifying. Our institutions should follow suit
“[Diversity and inclusion] must be everywhere from the grassroots of our communities to the top of our credit unions or we will not fully serve our purpose.” – Maurice Smith, CEO of the Local Credit Government Federal Credit Union in Raleigh, N.C. and immediate past chairman of the board for the Credit Union National Association.
There is a palpable energy around diversity, equity and inclusion (DEI) within the credit union movement. Leadership has put a stake in the ground, voicing a commitment to advancing this issue.
It’s significant that Maurice Smith, CEO of Local Government Federal Credit Union and immediate past board chairman of the Credit Union National Association, recently challenged the movement to expand the cooperative principles — which have stood since the mid-nineteenth century — by adding diversity and inclusion as the eighth cooperative principle.
Building on the momentum around DEI, CUNA has committed to leveraging its role as a thought-leader to advance these principles across the movement.
Together, CUNA, state credit union leagues and associations, credit union service organizations, individual CUs and other strategic partners are working to deepen DEI throughout the industry at both the organizational and member levels.
No one factor accounts for this growing energy around this subject. Instead, a confluence of issues has come together at this moment to elevate the push and make the time right for credit unions to lead the movement.
Mounting evidence suggests that advancing diversity, equity and inclusion among staff and boards makes good business sense. Research finds that more diverse organizations tend to perform better, are more innovative, more collaborative and more responsive to customer needs while also attracting and retaining top talent.
More broadly, we know that the U.S. is becoming increasingly multicultural; by 2044, people of color will constitute the majority of the U.S. population. To stay relevant and competitive in this rapidly changing marketplace, credit unions must be intentional about reaching and better serving this increasingly diverse population.
Furthermore, newly elected congressional leaders and regulators have also made it clear DEI is a priority at the policy level, raising the likelihood of more scrutiny of credit unions and other financial institutions when it comes to becoming more diverse, equitable, and inclusive in both makeup and service.
There is also a strong values case for DEI at the movement level. To start, credit unions’ unique genesis story is about inclusion. It’s evident that DEI is deeply aligned with our’ principles of “democracy and voluntary membership without discrimination,” and in CUs’ unique structure — credit unions are member-owned, democratically controlled, and not-for profit, which ensures that their success is bound up in the success of their members and communities.
We have a history of serving underserved and diverse communities. But we can and must do better, further ensconcing DEI in the credit union mission and structure so that we can better serve the changing face of our world and our members.
To advance DEI, we need to know where we stand as a movement, identifying those areas where we are doing well and others where we can grow. In this vein, CUNA has initiated research that looks at how credit unions are faring when it comes to DEI.
CUNA’s own research has found credit unions are leading the way when it comes to female leadership. More than 50 percent (52%) of credit union CEOs are women compared to the 5% of banks captained by women. Diving beneath the surface, however, we see that, while impressive, this statistic creates a bottom-heavy narrative, since women account for just 14% of CEOs at credit unions over $1 billion in assets.
What’s more, CUNA also finds that when it comes to credit union CEOs, there is a relatively low level of racial and ethnic diversity, with an overwhelming rate of white CEOs. These results challenge us to figure out how we can do a better job of advancing racial and ethnic diversity within credit union leadership.
In terms of membership, credit unions lead in some areas while lagging in others. Three times more credit unions than banks are designated as minority depository institutions (536 CUs compared to 149 banks). And despite field-of-membership restrictions, our industry serves a higher percentage of African-American households than banks. However, the competition serves a relatively higher percentage of Hispanic/Latinx and other households of color than credit unions. Clearly, there is an opportunity for credit unions to serve a more diverse, reflective swath of our nation.
There are some bright spots that we can celebrate, but there are is also a lot of room for growth. Expanding DEI in the credit union movement is a journey, and CUNA and the leagues are committed to equipping credit unions for that journey in order to lead the movement and the industry in better serving the changing face of our workforce and membership. It goes beyond relevancy and competitive advantage — it’s about fulfilling our movement’s mission and structure, what it means to be a credit union.