Championing the Credit Union Cause: A Deep Dive with Dan Berger

August 29, 2023

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Episode Summary

In this inaugural episode of 22 Minutes in Lending, Dan Berger, President and CEO of the National Association of Federally-Insured Credit Unions (NAFCU), provides an in-depth look into the ever-evolving landscape of the credit union industry and its partnerships.

Dan discusses the transformational journey of NAFCU, emphasizing its cultural significance and impact on the broader financial services sector. The progression from an endorsement model to a business development relationship stands as a testament to the changing paradigms of the industry.

The significance of advocacy and lobbying in today’s regulatory environment is also discussed. Dan underscores that lobbying extends beyond the confines of digital communication, and highlights the importance of genuine, personal relationships in this space.

In this episode

Episode Transcript

[00:00:00] Dan: Technology is the key. If you want to survive going forward in this the headwinds that are coming, you have to have partners with various fintechs and technology companies. You have to have them.

[00:00:38] Vince: Welcome everyone to our inaugural episode of 22 Minutes in Lending. I am your host, Vince Passione, and we’re here with a very special two part series part series with someone you all know, Dan Berger, President and CEO of the National Association of Federal credit unions.

[00:00:50] Vince: In our first episode, you guessed it, we’re going to be talking about that big topic, the NAFCU CUNA merger into America’s credit unions.

[00:00:57] Vince: Second episode, we’ll be discussing with Dan the state of the credit union industry. Without further delay, let’s start our first 22 Minutes in Lending. Dan, welcome, and thank you for coming on the podcast. I realize you are super busy right now.

[00:01:10] Dan: No, that’s great. Anything for you, Vince. Glad to be here.

[00:01:13] Vince: Awesome. Listen, August 1st was a big historic day in the credit union industry. When you announced the CUNA NAFTA merger, forming 1Trade Association, right? credit unions. Did I get that right?

[00:01:25] Dan: Yep. You’re absolutely correct. It was something that was in the works for about a year. Discussion was happening at the last GAC CUNY’s Governmental Affairs Conference. And it was just, we were talking about ways we can coordinate and collaborate. And then you start looking at landscape.

[00:01:40] Dan: There’s 4700 credit unions left. it’s just not a sustainable business model to have two national trade associations representing what’s going to become even smaller industry. And so both boards came and listen, let’s create a new trade association called America’s credit unions, and create the best of the best from both organizations, and Jim will be leading it and starting January one of next year.

[00:02:05] Dan: Thank you. And so right now we’re just finishing up the due diligence process. And we expect vote to start the end of this month in August and probably complete in the beginning of November, probably November 1st or 2nd. And then all the votes will be released from escrow and an announcement made on whether the merger passed.

[00:02:22] Dan: The CUNA membership has to vote for it, as well as the NAFCU membership has to vote for it.

[00:02:28] Vince: Dan, remind me, when I got into the system, there were a bunch of state leagues, And then the last sort of, it feels like, in the last half a dozen years, those state leagues have been merging into some very, very large leads like the, we see the Florida league now is what it’s Florida, Alabama. And Georgia and that’s leverage.

[00:02:46] Vince: know you don’t get involved in the state pieces as much, but how does that change the choices that credit unions have when they’re picking sort of their state league and their national association? Does it change things much?

[00:02:57] Dan: Well, a few years ago, CUNA decoupled from the league. So it used to be a requirement to join CUNA, you had to be a member of the league and vice versa.

[00:03:03] Dan: So that would be When America’s Credit Union is formed January 1 moving forward you can be a member of America’s pretty or the league, but the consolidation, the leagues the state associations are feeling the same pressures that national trades are feeling the consolidation is having an effect out there.

[00:03:24] Dan: And so those are the kinds of things you’ll see them continue to merge, I believe, just for the economies of scale that’s needed to operate in this current economic environment.

[00:03:34] Vince: Dan, you talk a lot about the regulatory burden that’s out there today and the fact that we’ve got this interesting sort of stalemate going on in DC, which. Allows regulators some wiggle room, and it’s the time regulation starts to grow. And you’ve always been really clear about that and how being an advocate for your credit unions is really important, especially times like now.

[00:03:53] Vince: So now you’ve got this transition period between now and the end of the year. Aren’t you members a little bit concerned about? Wow, going through transition. Did people take their eye off the ball? What happens in the short term? And you’ve been fighting the fight against junk fees and things like that.

[00:04:08] Vince: So how do you assure people that that’s you’re going to stay on point

[00:04:12] Dan: Yeah, I still have my day job as do all the lobbyists on staff. And actually Jim and I talked about this and we talked about it. We were together at the D. C. U. C. Event in Colorado. We talked exactly about this talking about the C. F. B. B. Talking about the fight against interchange the next Durbin amendment and things like that.

[00:04:30] Dan: Yeah, you gotta keep your eye on the ball. I talked to my colleagues about it all the time. Jim is talking to his colleagues about it all the time. We still have our day job, even though we’re going through a merger and integration and everything else with this merger, we have to do our day jobs and continue to advocate and protect the credit union industry.

[00:04:48] Dan: And we’ll continue to do that. My colleagues they can walk and chew gum at the same time and they do a great job. And so we’re keeping our eye on the ball.

[00:04:56] Vince: Now, Dan, we’ve talked about liquidity in the past.

[00:04:59] Vince:  And as we think about what’s happening right now, right? The number of interest rate increases that have occurred and the impact it’s had on the members on the credit unions and the options have been opened up for credit unions recently, right? To enhance the liquidity as you think about this merger and you think about some of the legislative issues that are out there regulatory issues.

[00:05:18] Vince: Do you see other options for quickly access that is now merged organization? Americans credit unions will be able to attack.

[00:05:26] Dan: Yeah, but I think a lot of it comes more from the business side than the legislative and regulatory side. Quite frankly, think that there’s are, we talked about it before, but the liquidity side, there are other funding sources to go to, whether it’s federal home loan banks and things like that, private markets, is something that they can look at.

[00:05:46] Dan: But they definitely have to review their A. L. M. make sure that they have efficiencies within their lending platforms and use folks and partners ships like Linkey and others to get those efficiencies and make sure you’re digital you’re effective throughout the entire lending process. so there are efficiencies out there.

[00:06:03] Dan: Some of them have legacy and antiquated systems, as you very well know, and so there’s efficiencies that they can do with partners like yourself and others. But, it’s more from the business operational side than from a legislative regulatory side at this point.

[00:06:17] Vince: Understood. So, As a partner of NAFCU and a former partner of CUNA, there are 2 very different models that I’ve experienced, right? The CUNA model, which when we started, we renewed the credit union industry was more of an endorsement model, which was really valuable to us. We renewed and that endorsement meant a lot.

[00:06:33] Vince: The relationship meant exposure, right? And we used to talk about it as the good housekeeping seal approval, right? As credit unions didn’t know who link he was in our current partnership with NAFQ as we’ve evolved and we’ve grown. It’s more of a business development relationship, right? The staff at NAFQ does a great job of helping us develop education, distributing that education, and then creating opportunities to expand our market.

[00:06:57] Vince: How do you see that evolving? I know it’s early and I know there’s a transition going on. But clearly from the perspective, you spent a lot of time on this.

[00:07:05] Dan: Yeah, brought up Randy Salser from Florida to head up NAFCU services, and he completely revamped our program here, our partner program, to exactly what you said became basically, a marketing arm of the partners and creating robust education, as well as the distribution of the education and making the partners the thought leader for that solution.

[00:07:28] Dan: and his team did a fantastic job and do a fantastic job. And so when the two boards talked about merging. They genuinely want the best of the best. And so if they want the best of the best, Randy and the program of NAFU services, I think is the best in financial services, even better than some of the other financial services trades that are out there.

[00:07:48] Dan: And so I’m hoping that they can continue with that process have it because it’s shown value. Yeah, sometimes the sales process and pipeline might be a little longer, but being that thought leader in that space and with that solution, the longevity is huge. days of, the trade shows and passion out trinkets and stuff like that are gone.

[00:08:09] dan: No one’s gonna buy a technology platform or or partner with the fintech. ’cause you gave me a squeezy ball, at a trade show. It’s just not gonna happen. But if you’re a thought leader and you’re being promoted as a thought leader, whether it’s on LinkedIn and emails and webinars and webcasts.

[00:08:24] Dan: those are the ways that you really become that thought leader and that expert out there and that knowledgeable and you, they’re go to you for that knowledge and for that expertise and that business model is the future. And Randy and NQ services, that’s what they do. it has worked.

[00:08:39] Dan: we can sit there and go, okay. Vince, give me 50, 000 and I’ll give you our logo and you get our seal of approval. There’s no added value there. want you to be successful because when you’re successful, we’re successful. And then we have a long term relationship where if you just get a stamp of approval, a one time thing.

[00:08:56] Dan: And if you get introduced to folks and people get to know you, but you don’t have that longevity from relationship standpoint with the client base, if you’re trying to Yeah. Get into in that marketplace.

[00:09:07] Vince: Well, Certainly, if Jim’s listening, I put a plug in, right? I think the model worked very well. I also think it’s very reciprocal. think from a partnership perspective, there’s a a lot that organizations like mine and others have to offer our credit union partners and you’ve made it very easy for it to be reciprocal.

[00:09:24] Vince: So thank you for that.

[00:09:25] Dan: Absolutely. And education is key. That’s the whole part. want to learn more. And technology is the key. If you want to survive going forward in this the headwinds that are coming, you have to have partners with various fintechs and technology companies. You have to have them.

[00:09:40] Vince: Now, and as a technology provider, we also need to get more business acumen and that’s what the staff has provided us with, right? Our ability to call into to NAFCU and to find out things about what’s going on with loan participations, or to really understand what’s happening with investments and to see where we can take our products.

[00:09:56] Vince: So absolutely helpful. Really helpful. So, Dan, you spend quite a bit of time in the credit industry. And I’m curious, as you sort of built out and ask you, talk us all about your legacy. Talk about what those accomplishments and some of the challenges you face and the things that you leave behind that you’re most proud of.

[00:10:14] Dan: Wow. have not thought about legacy, but I think what I’m most proud of is the culture that we built at NAFQ. Yeah, are nonprofit, which is the differences are tax I. D. Number is different. We still have to, have revenue in order to keep the lights on and pay salaries and benefits and to provide the advocacy that our members want and demand.

[00:10:37] Dan: But we really created a culture with a growth mindset. And we talked about it internally. It’s called extreme member service. We do everything through the filter. What’s in the best interest of napkin members? What’s in the best interest of the credit union industry? That’s our filter. And we were responsive.

[00:10:54] Dan: We’re relentless with our advocacy. God forbid to get lost in our phone tree. The young man in the mail room can help you as much as I can as CEO. And that permeates the entire organization. And I think that culture of being helpful to our members and responsive to our members, passionate about the credit union industry.

[00:11:13] Dan: That’s what I’m most proud of. it was a lot of work. I mean, I had executive coach when I first got appointed CEO. Which is really helpful in learning how to communicate better with folks and communicate your vision and what you’re expecting. And it was really helpful, but it took several years.

[00:11:31] Dan: It wasn’t an overnight process. It wasn’t just me. There was an entire management team my colleagues that did a wonderful job to execute and implement that vision and that plan. so I’m hoping Some of that continues with America’s credit unions. In fact, I know it will because Jim is committed to it.

[00:11:49] Dan: The two boards talked about it. They don’t want a NAF few 2. 0. They don’t want to CUNA 2. 0. They want the best of the best and under the umbrella of America’s credit. So I’m excited about it. I’m 110% in support of this merger. In support of Jim’s leadership, it’s the right thing for the industry.

[00:12:06] Dan: One voice, but we’re gonna get the best of the best under this new umbrella.

[00:12:10] Vince: Fantastic.

[00:12:12] Vince: So there’s got to be a lot of work on the hill. You’ve got relationships on the hill. Obviously, Jim has relationships on the hill. How does that work? What’s going on behind the scenes? They’re hiking the hill and having conversations about this and describing what you’re doing.

[00:12:24] Dan: I have a stable of terrific colleagues that are lobbyists, both on the legislative and regulatory side. occasion, they’ll dust me off and drag me up to the Capitol Hill. And I love it. really enjoy talking to the members of Congress and, seeing former staffers, some of them are members of Congress.

[00:12:41] Dan: Congress now, former chiefs of staff that I worked with that are now members of Congress. of course, dealing with the various prudential regulators that we talked to, I really do that aspect of the job. but Jim does the same thing. We both have robust advocates on both sides of the ledger.

[00:12:58] Dan: but it’s something that it’s a necessity. You have to do The only way to to be an effective lobbyist and an effective advocate is to be up there visiting the agencies visiting the members of Congress and wearing out that shoe leather. just can’t do it via email and text, you have to be up there and actually develop a relationship with these folks to be ultimately successful.

[00:13:18] Vince: Absolutely amazing. Well, Listen, Dan, it is always a pleasure chatting with you and really thank you for coming to podcast. I realize you’ve got an awful lot going on and you were kind enough to come back on again. So I do appreciate it. I look forward to continue working with you to the balance of the year.

[00:13:33] Vince: Can’t wait to see what the next chapter holds for you. If you’d like to maybe foreshadow it here. We’d love to hear it.

[00:13:40] Dan: No, I appreciate it.

[00:13:41] Dan: Anything for you, Vince. I’ll chat with you anytime you want.

[00:13:45] Vince: Well, Thanks to our listeners, please make sure to tune into the 2nd part of this series and listen to Dan talk about credit union industry. I thank you for tuning in and remember to subscribe. So you don’t miss a single episode and I’ll meet you all the next 22 minutes and letting Dan. Thanks so much.

[00:13:58] Dan: See you Vince.