Too often, payday lenders are easier to find than a credit union. What if we flipped that script and brought financial services straight to the communities being exploited?
In this episode of Grow Your Credit Union, host Joshua Barclay is joined by co-host Becky Reed and guest Michael Crowl, President and CEO of University Federal Credit Union. Together they explore how UFCU is beating industry trends with explosive membership growth, how mobile branches are combatting predatory lenders, and what new legislation could mean for small business lending.
What’s Driving Explosive Member Growth at UFCU?
While more than half of U.S. credit unions are losing members, UFCU is adding them over 38,000 last year alone. Michael Crowl attributes this record-breaking growth to a company-wide mindset: growth equals impact. “We don’t want to just grow for growth’s sake,” he says. “We want to have a greater impact on more people’s lives.” From purpose-driven values to word-of-mouth buzz, UFCU is building a brand that people not only recognize, but love.
Becky Reed notes that the broader credit union industry is starting to recognize the need to double down on niche communities. “We can’t be all things to all people,” she says. “But if we focus on our roots, that’s where the real growth happens.”
Can Mobile Branches Fight Back Against Predatory Lending?
In some communities, payday lenders are easier to find than a bank. Michael Crowl and UFCU are flipping the script by rolling out mobile branches essentially full-service credit unions on wheels into underserved areas. “Why don’t we go where people are?” he says. Partnering with nonprofits and other service providers, UFCU is delivering access, education, and dignity directly to the people who need it most.
Becky backs the strategy. “Predatory lending is generational,” she says. “Unless we’re visible and understood in those communities, people won’t come looking for us.” Her advice? Show up, educate, and make credit union services top of mind.
Will Congress Raise the Cap on Small Business Lending?
A new bipartisan bill proposes raising the threshold for what counts toward a credit union’s member business lending cap from $50,000 to $100,000. Michael Crowl supports the move but says UFCU is focused on small business services regardless of cap changes. “We actually pulled out of commercial lending so we could serve small businesses better,” he says.
Becky is all for fewer regulatory hurdles but urges credit unions to get creative. “We can accomplish great things through CUSOs,” she says. “We don’t need to wait on Congress to serve our members better.” She also pushes back on bank industry objections. “Go do what you do well, let us do what we do well, and shut the F up.”
Top Takeaways from This Episode
- UFCU’s growth strategy is rooted in impact and authenticity, not just numbers.
- Mobile branches are proving to be powerful tools for reaching and educating underserved communities.
- New legislation could ease small business lending caps, but CUSOs offer an immediate path forward.
- Credit unions must embrace niche strategies and collaborate to expand their reach.
- Regulation may change, but member needs don’t. Meeting them means showing up literally.
Full Transcript
Joshua Barclay: Credit union community, here are your topics for today’s show. First up, credit union membership is growing slightly overall, but here’s the kicker. More than half of CUs are actually losing members, yet one credit union is breaking membership growth records. What’s driving their success? Next, predatory lenders. They rake in billions, trapping borrowers in debt, but mobile branches are flipping the script, bringing financial services straight to underserved communities. Could they be the antidote to predatory lending? And finally, a new bill could double the small business lending cap for credit unions, but is it enough to give CUs a real edge in business lending?
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Joshua Barclay: Welcome to Grow Your Credit Union. This is the place where credit union leaders gather, learn, and grow. I am your host, Joshua Barclay, and with me is my co-host, Becky Reed. Becky, hello.
Becky Reed: Howdy, y’all.
Joshua Barclay: Becky, before we start, we’d love for audience input. So, what that means, audience members, if you’re listening and there is a topic or story that you think would benefit our listeners and strengthen the credit union movement, let us know. Email me at joshua@growyourcreditunion.com or message me on LinkedIn if you have any topic ideas that you think we should be covering. Becky, I have seen you traveling a lot. I’m a little jealous, I’ll be honest, I’m not traveling as much as you are, but I never ask you, aside from Texas because I know if I ask you what your favorite state is, you’re just going to go to Texas, but let’s remove Texas from the equation. Of all of the states that you’ve been to, what is your favorite state that’s not Texas?
Becky Reed: Wow, that is interesting. I would say Colorado.
Joshua Barclay: Why Colorado?
Becky Reed: Well, in Texas, certainly, we have kind of sort of like mountains, maybe, a little bit. In West Texas, they’re more like mesas, kind of like what you have in New Mexico or Arizona, but we really don’t have the tall mountains and the plains and the climate, the trees. So, it’s just a very rugged and rural type of area outside of Denver, of course. I don’t know, I kind of love that rugged feel. So, yeah, Colorado would be my next choice, I think.
Joshua Barclay: I’d say Colorado too, quite a bit, actually. If I’m going to go with a favorite, I’m going to go with a controversial one because of the politics and things, but California is my favorite state if we can ignore a lot of things about California and just concentrate on the weather. Okay, Becky, we’ve got a good one today. We welcome the President and CEO of University Federal Credit Union, Michael Crowl. Michael, welcome to the show.
Michael Crowl: Well, Joshua and Becky, thank you both for this opportunity. I’m really excited to be here. And Becky, I love to hear you say “y’all” as a fellow Texan. And as you know, parts of Colorado were once part of Texas.
Becky Reed: Yeah.
Michael Crowl: So, it’s really like just going back to the same state. So, I love how you answered that question because I would 100% agree with you.
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Joshua Barclay: Between year-end 2023 and mid-2024, total US credit union membership grew by about 2.4%, topping 141 million members. But here’s the catch. Median membership actually declined slightly, meaning more than half of credit unions lost members. So, while the industry shows modest growth on the surface, many credit unions are quietly struggling to attract new members. But UFCU is bucking that trend, Michael, because under your leadership, over 38,000 new members joined last year, and that is the most in UFCU’s 89-year history. So, Michael, the obvious question I have to ask you is what’s driving this record-breaking membership growth at UFCU?
Michael Crowl: Well, obviously, super excited about it. I share the concerns, too, about that more than half the credit unions across the country are shrinking in membership. And here in the state of Texas, we’re a growing state, 8% population growth in the last five years, more than half the credit unions also experienced declines, right? So, again, said another way, they have fewer members today than they did, right? So, as, to me, a key indicator of relevance in the marketplace, is something that we’re focused on here. And you may say, “Well, why are we focused on it?” We don’t want to just grow for growth’s sake, right? For us, we think about growth and impact as synonymous terms, frankly, and the reason we grow and want to grow is so that we have a greater impact on more people’s lives. That is at the fundamental heart, kind of core who we are as a credit union. And so, for us, that’s what the growth is all about. And so, it’s been about aligning the organization from our very defined purpose, our values, our aspiration, but then thinking about the member experiences kind of holistically from product design to marketing, the engagement, delivery and service across all the channels and the kind of everything in between, right? And so, the organization has really rallied around this whole thing around growth equals impact for us because we know what we do is good and it has an impact. So, we want to do more of it.
Joshua Barclay: What do you think specifically is attracting members? Because I could ask you what are you doing, but let’s flip the script. What do you think these members are perceiving that makes them want to join? Like what is the marketplace perceiving about UFCU, you think, that is bringing all these new members in?
Michael Crowl: Yeah, I get this question a lot from folks. It’s kind of hard to point to any one thing. What I would say is I think we’ve done a great job in branding that predates my time as CEO and has continued, but there’s an authenticity to what we do, and I think people see that. And one of our biggest growth sources is word of mouth. So, referrals from one member to another member. And you can literally walk around Austin or other parts of Texas, and when people talk about UFCU, they say they love UFCU. And if I pull out my debit card or my credit card and it’s got the logo on it, people will tell you, or if I tell them I work at UFCU, they’ll start telling me all their business. Like, “Oh, you have my auto loan and my mortgage loan.” Like, “Oh, you don’t need to tell me those things. Like, it’s okay. Like, I love that you’re a member.” I always ask them how we can serve them better, of course, but it really is the authenticity, right? So, I think it is the branding, that we were branded in a way that, of course, externally, but when people experience us, they feel heard, they feel seen, they feel cared for. We’re here. We’re not perfect by any means, right? We make mistakes and we try to fix those things, and we’re always trying to get better. But I guess, yeah, if I had to distill it down to one thing, it’s authenticity.
Joshua Barclay: Becky, you’re talking to a lot of folks. You were CEO for many moons. You are the quintessential credit union leader in my mind, and you’re talking to a lot of them, not just on this podcast, but all over the country. What are you hearing about right now in terms of what is attracting new member growth? Or even if you want to touch on how a lot of people are not growing, what are you hearing out there in terms of member growth?
Becky Reed: Well, what’s interesting, I think, is that credit unions are starting to recognize, and I think Michael touched on this when he was talking about their reputation, right? And it’s doubling down on that niche specialty that the credit union needs to focus on. So, we can’t be all things to all people. And we all realize that, [Laughter] both in looking at our bottom lines, as well as looking in membership growth areas, we just can’t do everything. And there’s five generations right now we’re trying to serve. And so, credit unions are really starting to focus on the specific community they’re serving, the SEG base that they are serving, kind of going back to our roots. That’s really what I’m hearing in the industry right now, is people are focusing more tightly instead of looking to serve a more broad ecosystem, which we may have been focused on maybe too much in the past.
Joshua Barclay: And do you think credit unions are kind of getting this message, Becky? Do you think they’re understanding that they need to go back to their niche roots?
Becky Reed: [Laughter]
Joshua Barclay: Or do you feel like they’re feeling like, “Oh, I’m looking at all these fintechs, I’m looking at all this shiny objects,” like, do you think they’re getting the message to double down on the roots niche, or do you think they’re losing sight with kind of shiny object syndrome?
Becky Reed: Well, I think some are. They’re getting back to their roots. I think more need to. I think, though, that it really starts in a boardroom. And I have not seen, at least who I’ve been talking to, I have not seen that transition there yet. And in order to really revolutionize doubling down on a niche community or a niche group of people and just doing a small thing really, really well has to start with the board members. So, until we get there, we’re not going to see a dramatic shift in focus in the credit union space.
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Joshua Barclay: In 30 states, payday lenders raked in, get ready for this, over 2.4 billion in fees in a single year. And in 2022 alone, borrowers took out over 20 million payday loans, totaling nearly 8.6 billion. And that’s according to responsiblelending.org. Michael, what I love about UFCU is you’re taking a different approach in terms of bringing financial wellness to the community. You have these mobile banking branches, which are essentially like food trucks or think of like an ice cream truck that delivers financial services to the community. What I want to know is, do you see these mobile branches as helping underserved communities, to help them steer clear of predatory lenders?
Michael Crowl: Absolutely. Yeah. So, for us, this idea came up over probably 10 years ago at UFCU or more from one of our employees named Ben Carter, who, if you’re familiar with Austin at all, they call it the Eastern Crescent of Austin is typically underserved. It’s a financial desert. It’s a food desert in a lot of places too. And so, his idea was to put a lending center there as a test because we only do direct auto lending, we don’t do indirect, and how do we help people in Texas? Public transportation’s lacking. So, a car’s a job, right? You got to have a car to have a good job oftentimes. And so, rather than do that, we actually pivoted, and we went with the idea of a mobile branch because we felt like, why don’t we go where people are, right? Rather than making them come to us or having them come to us, let’s meet them where they are. So, as you enter new communities, right, you’ve got to build relationships and that trust is foundational. And so, we partner with local nonprofits as part of the outreach.
So, you talk about having other mobile services there, so when we go to a lot of the communities now, you’ll see where it’s almost a one-stop shop experience for folks, where there’s a healthcare provider, food services are provided. There’s other services. We’re just one of many trucks there. Our branch was designed in a way that’s literally a full-service branch on wheels. So, anything you can do in one of our other branches, you can do in this branch too. And so, I think we’ve found that folks have welcomed us with open arms. What I would say, too, if I give one last thing around this, just would be, or at least for now would be we’re all familiar with Louise Herring, right? Founded over 500 credit unions in her day, and one of the true pioneers of the credit union movement. There’s a great section she wrote of a book a while back that talks about interest rates at the time were…legal rates were up to 60%. Well, in the state of Texas, petty loan rates are as high as 664%. And then you talk about title loans where somebody owns their car, like they actually own the car, 250% interest. It’s unbelievable. So, we haven’t solved the problem that Louise was talking about almost a hundred years ago. So, credit unions have to lean into this, right, and have to have to solve this. This is why we exist.
Joshua Barclay: Becky, what is your take on mobile branches or just ways to serve the underserved in general to get away from some of this predatory lending? Because when I look at the numbers on it, really, I was under the assumption that there was way less of these loans out there than there are. I was kind of blown away. But what is your take on how to better serve these communities that are, let’s face it, being exploited by these predatory lending situations?
Becky Reed: Well, let’s talk about the communities in which the people who we’re trying to serve live, and payday lenders do a great job of making sure they have locations in the strip shopping centers that are in communities where people are most likely to use a payday lender. And payday lending, that cycle is a generational thing. People say, “Hey, I need $500 to pay my electric bill.” And so, they ask their family members, “What do you do? How do I get $500 to pay my electric bill?” And people go, “Well, go to X shop on the corner over there and just give them your paycheck and your driver’s license and you’re going to walk out with 500 bucks.” So, they don’t know necessarily a better way. And so, unless credit unions are there, unless we’re visible, unless people understand what services we can provide, then they’re not going to come seek us out. And they’re certainly not going to drive 25 miles to a completely different part of the city in order to get that service. And so, the word of mouth that Michael was talking about previously is so, so important because people look to their friends and family for advice and recommendations. And so, the credit union needs to be top of mind really in order to compete, and I think the mobile branch is a perfect way to do that.
Joshua Barclay: What I’m wondering, Michael, is I’m thinking about this, Becky, what you said is so spot on about the location, right? But let’s say you are in the right location, and I’m desperate for a loan, and I’m on a strip with a bunch of pawn shops, let’s say, right? And I see a payday lender and I see a credit union right next to it. Good chances are that my financial situation, my credit score, is so bad that I’m not sure that the credit union is going to touch me. So, what I’m wondering, Michael, is the real play here bringing these mobile branches into the community to educate? How important is education to get people to understand, “Hey, you don’t want to be in the position to need a $500 loan to pay your electric bill.” So, I guess what I’m asking is how much of the initiatives around the mobile branch are just going to a community to educate?
Michael Crowl: It’s actually, that’s where we started, frankly. So, while we have a long-term goal of greater engagement, we first, that’s exactly where we started, right, is just educating folks, again, what credit unions are. Because again, by the name credit union, people oftentimes think it’s restrictive, right, in those things too. And so, you’re absolutely right. I think it’s one of those things where if you can show people a better way. And I think the other thing is making sure that as a credit union, you have products designed for people in those situations too. So, doing subprime lending, having small dollar loans, other services again. And if you can’t serve them for whatever reason, you give them a path forward. Make it very clear. We call it kind of a decline with dignity or a no dignity but let me show you the clear path forward. And if you do these things, here’s the benefits of it. And we’ll side-by-side with you on that journey.
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Joshua Barclay: We all know small businesses are the backbone of the economy, but outdated lending caps make it hard for credit unions to support them. Right now, federal regulations require credit unions to count loans over 50,000 towards their member business lending cap. It constrains credit unions’ ability to do small business lending. But there’s a new bipartisan bill. It’s called the Increasing Credit Union Lending for Business Growth Act, and it aims to raise that threshold to 100,000, giving credit unions more room to fund small businesses. Now, Michael, in a recent episode with Mina Worthington, she’s the CEO of Solarity Credit Union, when I asked her about the big opportunities for credit unions, she mentioned small business lending, but she also pointed to some of the barriers that I’ve just suggested with the lending cap. So, what I’m wondering is with this new proposed bill, do you think it goes far enough to give credit unions a real foothold in small business lending?
Michael Crowl: Yeah, for me, I’d love to see a lot of the restrictions taken off of this, right, frankly, because again, what we do as credit unions, it’s good for people, right? And it’s good for small business. They still generate two-thirds of new jobs for folks. And so, for us, there’s an incredible opportunity, right, that again, we can lean into. I feel maybe a little bit provocative to say, but I think that small businesses sometimes find themselves in the same place that consumers did 100 years ago, right, and that they’re not being served well by others. And credit unions, again, can extend themselves into this area and help more people. So, anything that Congress can do to remove those barriers to be able to serve people, we’re 100% behind that.
Joshua Barclay: Becky, do you think this would really change the game, raising that to $100,000? Or is it just kind of it sounds nice, but in reality, it really ain’t changing much? What do you think? [Laughter]
Becky Reed: Well, we can accomplish even greater things by using CUSOs. So, I don’t think that we need an Act of Congress, literally, in order to be able to do a better job with helping members, regardless of if it is in business lending, or payday lending, small dollar loans, that kind of thing. Now, that being said, any limitation and restriction from a regulatory perspective that credit unions have to deal with adds complexity. Complying to the different caps and regulatory requirements for reporting doesn’t lend itself to a good member experience, regardless of whether it’s business lending or something else. So, I’m for anything that reduces regulatory burden. But there’s some really great things that we can do with CUSOs if we just work together and use our cooperative, collaborative superpowers to deliver those member services without having to be too encumbered by regulatory caps.
Joshua Barclay: That begs a good question, Michael. Are you utilizing a mechanism to do small business lending more aggressively, let’s say?
Michael Crowl: So, at UFCU, we’ve not found the need to at this point. We’re actually really building out our small business services so that we can cater kind of end-to-end experience for those members too. But for us, it’s not been an issue. But I know it is for others, right, who focus more heavily. And Becky, you mentioned earlier about focus. We really are focused on that consumer experience, and that extends to small businesses and serving less of the commercial lending. We actually pulled out of the commercial lending area last year, not because anything was wrong, we did it very, very well, it was so that we could actually serve small businesses better.
Joshua Barclay: That’s interesting. And I like that you doubled down, Michael, on your specificity and your niche-based services. I do like that you stand by your principles no matter where the market might be going, and that’s probably food for thought for everyone. Becky, I did read in this very same article that the banking community is up in arms about this proposed bill because they do not feel like credit unions should be issuing these types of loans for commercial purposes. What are your thoughts around that? And also, what are your thoughts around how little small business lending credit unions actually do?
Becky Reed: Well, to address the bank question, I think that similar to what University Federal is doing by taking a mobile branch into the community, Michael talked about there being bank deserts, and bank being the operative word. And I think from a small business lending perspective, look, banks do a great job with commercial lending. But if you need a half-million-dollar line of credit, they’re probably not going to talk to you. That’s not an area of business that they want to serve. And so, I would tell banks, “Go do what you do well, let us do what we do well, and shut the F up.” That’s what I would tell banks. So, go do it better than us, or shut up. So, that’s what I would tell them, first of all. And then your second part of your question was…
Joshua Barclay: Do you just feel like credit unions are not serving small businesses the way they should, in a sense? I mean, it’s wild to me that in a previous episode, Mina said a big opportunity is small business lending, and I’m like, “Opportunity? Aren’t you already doing that?”
Becky Reed: No, credit unions really don’t. But to Michael’s point, a lot of people have a sole proprietorship or an LLC or a side hustle. It might not be their primary business. We’re talking about businesses that are under $5 million in revenue. And again, that particular space is not well served by the banks, generally. Now, there are some small community banks that do a pretty good job there, but credit unions are well positioned to do that. And a lot of times, members don’t come to us asking for things, but they do come to us asking for small business services. That is something that we hear all the time. They’ll be like, “Oh, I just opened up my lemonade stand,” or whatever it is. I mean, people, this is the American dream, right? We want to be entrepreneurs. We want to have a startup. Even if it might not replace my day job, it’s still something that I want to do, and I want my credit union to be able to provide those services for me. So, we can do a better job with that. And yes, it is an opportunity.
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Joshua Barclay: That brings us to the end of the show. Michael, do you have any final thoughts or parting words based on anything that we touched on today?
Michael Crowl: Oh, I could go on and on, I think. But for purposes of this, I just say, again, thank you all for what you do. It’s important that our voices be heard and message get out there. And the more that we can partner together. I think, Becky, what you said around CUSOs, whether it’s CUSOs or otherwise, right? How do we partner together to really lean in to solve these issues, right? Because we matter. Credit unions matter. And so, living into that unique purpose that we serve. So, again, thank you for the opportunity to come hang out with you all and be part of this, Becky and Joshua. And hopefully, I’ll get a chance to come back and we can talk some more about some of these topics.
Joshua Barclay: “Credit unions matter,” is a great quote, Michael, a little different than Becky’s FU banks quote, for sure. So, my last question for you is if somebody wants to get in touch with you, what is the best way to get ahold of you?
Michael Crowl: LinkedIn is the best way. Yeah, just connect with me on LinkedIn and then feel free to message me as well.
Joshua Barclay: Becky, final thoughts.
Becky Reed: Well, I love what University Federal is doing, and I can tell you that I know about University Federal by their reputation. And so, it gets to people inside of the credit union community as well, and I know that they do a great job in the Austin area. So, he’s absolutely right with word of mouth, focusing on your reputation and your brand recognition and helping communities, I think, is just so great. And he is absolutely right. Credit unions do matter, and we need to do a better job of getting that message out. Credit union is kind of an antiquated word, guys, and it’s a little bit of an exclusive word, right? People think there’s exclusivity in a credit union. And so, we need to get the word out that we are an inclusive ecosystem, and we’re ready to help anyone and everyone. So, we can do a better job, guys, there. And it’s through cooperation that we win.
Joshua Barclay: Thank you, Becky Reed. Thank you, Michael. I want to give a special thanks to our listeners for continuing to support and listen to another episode of Grow Your Credit Union. If you like the show, please follow us on your podcast player of choice and share the episode with someone that you think would dig it. If you want to be a guest or you would like to be a sponsor on the show, head to growyourcreditunion.com to learn more. That’s growyourcreditunion.com. Thank you for listening and we will see you next time. Take care and buh-bye.
