Credit unions have long been risk-averse by design, but today’s environment is pushing the industry to think less about what’s safe and more about what’s best for the member. That shift, from compliance-first to consumer-centric, is reshaping everything from governance to payments to technology strategy.
In this episode of Grow Your Credit Union, host Joshua Barclay is joined by guest co-host Stacy Armijo, Chief Experience Officer at Amplify Credit Union. They welcome back James McBride, CEO of Connects Federal Credit Union. Together, they discuss how governance reform, digital payments, and regulatory pressure are reshaping credit union strategy.
Should Boards Still Meet Monthly?
The Credit Union Board Modernization Act is once again under consideration in Congress. James and Stacy agree that the frequency of board meetings is not the real issue. What matters most is the level of engagement and competency among board members.
James highlights that many boards are made up of retirees who may not stay actively involved between meetings. Reducing the required frequency could make it easier to bring in younger professionals with busy schedules. However, if a board is already disengaged, less frequent meetings will only make things worse.
Stacy echoes that sentiment. She says if a regulation doesn’t improve outcomes, it’s better not to have it. At Amplify, they’ve made a deliberate effort to recruit board members who are still in the workforce. Flexibility, she says, can be a tool to build stronger, more diverse boards.
The Gap Between Real-Time Payments
By 2028, most credit unions will be able to receive real-time payments, but far fewer will be able to send them. That imbalance creates a risk to competitiveness and member expectations.
James emphasizes that receiving payments is only part of the equation. He views real-time payments as a key part of member engagement and a requirement for deposit growth. Consumer expectations are set by large tech companies, and credit unions need to keep pace.
Stacy shares that Amplify will go live with receiving functionality in the next two months, with sending scheduled by year-end. She challenges the industry’s “fast follower” mindset, arguing that waiting too long is the biggest mistake credit unions make. Even if members aren’t asking for it today, they will be soon.
Thanks to our sponsor, InvestiFi
Open Banking: Regulation or Competitive Mandate?
The CFPB’s new Open Banking Rule won’t apply to all credit unions based on asset size, but that’s not the point. Both guests argue that the real pressure is competitive, not regulatory.
James says credit unions report to regulators, but they serve the American consumer first. He sees open banking as a natural extension of the credit union mission and a call to improve service and technology. The Shared Branch Network was an early example of this kind of collaboration, and now the industry has a chance to take it further.
Stacy agrees. She compares open banking to the days before mobile number portability, when phone companies made it hard to switch providers. Consumers eventually won that battle, and they will here too. She encourages credit unions to stop relying on member loyalty and instead earn their business every day by acting like their members are customers.
Top Takeaways from This Episode
- Strong governance comes from engaged, competent board members, not meeting frequency.
- Credit unions must prioritize both sending and receiving real-time payments to stay competitive.
- Waiting to adopt new technologies is a bigger risk than moving too soon.
- Open banking is an opportunity to meet rising consumer expectations, not just a compliance issue.
- Treat members like customers. Build products and services that make them want to stay.
Full Transcript
[Joshua Barclay] Hello, credit union community. Big changes could be on the horizon. How will they impact you? First up, the Credit Union Board Modernization Act. It promises more flexibility, but does it strengthen governance or weaken oversight? Next up, real-time payments. They are quickly becoming the standard, but there’s a major gap.
Most credit unions will be able to receive them, but far fewer can send them. Is that a competitive risk? And finally, the CFPB’s Open Banking Rule is set to shake up financial services. Will it fuel innovation for credit unions, or will it introduce more challenges than opportunities?
[Music]
[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 today is a very special guest co-host. We welcome back to the show the chief experience officer at Amplify Credit Union, Stacy Armijo.
Stacy, great to have you back on the show.
[Stacy Armijo] Thrilled to be here. Thank you.
[Joshua Barclay] Stacy, before we start, I just want to give our listeners a heads up. If there’s a topic or story that you think we should cover on the podcast, please let me know. You can email your topic suggestions to me at joshua@growyourcreditunion.com or message me on LinkedIn. Stacy, I always like to ask my guest co-host about something in their life before we kick the show off, and I asked this very question to Becky, and I’m going to ask it to you.
What is the first concert you attended with your own money?
[Stacy Armijo] Ooh, with your own money. Okay. I was ready with the answer and now it’s a different answer because the actual first concert that I ever attended was Moody Blues, which was amazing, and I was very young, and I did not appreciate what an amazing [Laughter] concert that was, but it was awesome.
Ooh, what’s the first one that I attended with my own money? I think it was Brooks and Dunn. Now, I cheat a little bit. This was the Houston Rodeo. So, I grew up in the Houston area. The Houston Rodeo has a lot of really great shows. So, it sort of depends on how you count. There was also a George Strait situation in there at one point.
I actually am not today much of a country music fan, but I sure was back in the ’90s, and there’s no better place to see George Strait just stand on the stage and strum his guitar than on a rotating stage in the middle of the Astrodome. That was mine.
[Joshua Barclay] That’s the ultimate country show. And you know, you said something that made me laugh a little bit, which was you said that you didn’t recognize how good you had it with that first concert that somebody took you to, and my grandmother did that for me. When I was like nine, she took me to Neil Diamond, and everybody was going crazy around me singing and I didn’t know him or like his songs.
I grew up kind of a big alternative grunge rap fan, and I just wasn’t into it. And just recollecting on it, it’s insane the seats that we had, and I know people would have killed to have been in that spot. So, Grandma, thank you for the Neil Diamond. I didn’t appreciate it, but I promise whenever I hear Neil Diamond on the radio or Spotify, I’m like, “Oh yeah, I remember that one.” Okay.
Let’s kick off the show. Our guest today, he’s no stranger. He’s the CEO of Connects Federal Credit Union, James McBride. James, long time no see, man.
[James McBride] Man, it is good to be here. I’m ready to have great conversation. By the way, for me, the answer would be White Zombie.
[Stacy Armijo] Oh.
[Joshua Barclay] Nice.
[Stacy Armijo] Okay.
[Joshua Barclay] Nice. A little more rocking than Stacy and I.
[James McBride] I had no business being in that building, but I was there.
[Laughter]
[Music]
[Joshua Barclay] Regulatory requirements shape how financial institutions operate, but some argue that certain mandates like the requirement for credit union boards to meet every month are outdated and create unnecessary burdens. So, there’s this newly reintroduced Credit Union Board Modernization Act, and it’s seeking to grant credit unions more flexibility in how they manage governance.
Supporters say this will allow credit unions to better serve their members, while others question whether reducing oversight could lead to unintended consequences. James, do you think this shift will genuinely help credit unions focus more on their members or could loosening board meeting requirements actually lead to just challenges with oversight and accountability?
What’s your take?
[James McBride] I actually think the answer is both and let me explain why I say that. So, the issue is not in the structure of the board meetings or how frequently they are. The issue is in with the quality and the competency of the people that are actually serving on the board. Right? So, if you say to yourself, “Well, it’s going to reduce oversight, it’s going to reduce board competency and participation.” Well, if you look at the board composition across the country, most of our board members are retired individuals, right?
Oftentimes you see people coming into the meeting and they haven’t paid attention to what’s going on in their organization in between. Well-run boards are actually more proactive. They’re more attentive. They’re paying attention to what’s happening on a more regular basis. So, if that stays in place, then you’re not going to see a reduction in competency because you don’t have scheduled meetings as frequently.
However, if you have credit unions who already have poor governance, already have poor board competency, that will make it worse.
So, it’s not a matter of a good or a bad. It doesn’t really change a lot except for the possibility of credit unions who really want to have strong boards, it gives them the chance to get younger professionals brought into their board, right? So, if I don’t have as much obligation as a volunteer to come in and participate, right, I can come in, I don’t have to be there in person, but once every two months, great.
Now I can do that. It makes it more flexible for me. There’s people working from home these days. There’s been a shift in that thinking as well, but there’s still that group of people out there that are like, “I would love to volunteer. I would love to be a part of a community financial institution.
I just need it to be more conducive to my schedule.” That’s where it’s going to benefit. That’s where it’s going to lift up the talent that’s out there in our communities to be able to participate more regularly with our credit unions. It’s not going to help with a competency issue. If there’s already a competency issue in your credit union, here’s the spoiler alert, it’s still going to be a problem.
[Joshua Barclay] Wow. I love this question because it opened up the doors to criticize [Laughter] credit union boards.
[Stacy Armijo] [Laughter]
[Joshua Barclay] Great take. I do agree with you on the composition of the board, James, and sort of the flexibility around the meetings. Stacy, what is your take on this modernization of the board?
[Stacy Armijo] I completely agree with everything that James just said, and how I would characterize that in addition is if regulation doesn’t make us better, it’s better not to have it. So, as I think about where would I land on this issue, I completely agree. If you’re in a good place, you’re still going to be in a good place.
If you’re not in a good place, you’re still going to not be in a good place, regardless of what is required from a frequency of meetings point of view. So, why not lean into the fact that it could be an advantage in certain ways when it really doesn’t even help in the more challenged circumstances? So, that’s where I land on that, and I do think keyed into exactly the bigger issue and opportunity is how can we make being a member of the board of directors of a credit union something that is exciting and compelling and practical for people of a wide variety of lifestyles and backgrounds?
So, we’re lucky at Amplify that we actually have a fair number of board members who aren’t retired, but we know that that is unusual, and that has been an intentional choice. So, we have worked hard to say we want a wide variety of perspectives represented on the board, but it absolutely is a challenge.
So, the ways that our board members navigate interacting with us is very different based on what their life stage is and what they’re doing. And so, if we can have more flexibility in being able to do that, then that just makes us better and stronger.
[Joshua Barclay] So, it sounds, Stacy, like the modernization of the board is not an act of Congress. It’s an internal act of just an organizational framework. James, do you kind of piggyback on what Stacy said in that are you operating within that type of structure with your board today?
[James McBride] So, in the last 60 days, independent of this legislation that might pass, might not pass, it’s the second time through, I’ve been talking to our board about we’ve got to find ways to expand the way that we think about board member acquisition, right? How are we thinking about that? Where are we acquiring those people?
And back to what we were saying, you said, hey, it opened up the door to criticize credit union boards. It can also be a problem with the person sitting at the top, right? The CEO. Because here’s the thing, if I don’t have a board that’s engaged, a board that’s challenging me, boy, that makes my life a little bit easier, right?
So, I can just skate on through. And guess what? A lot of those credit unions that operate that way, let’s be real, folks, they’re going away.
[Joshua Barclay] Stacy, I feel like he just slammed the gavel down. Is there anything you would like to add to that comment?
[Stacy Armijo] Can I bedazzle the gavel and slam it down right alongside him? That is what I would want to do to everything that he just said because that is absolutely true. So, we sometimes think about boards and oversight as if it is compliance. We think of it as like, “Oh, let’s make sure we’re following all the rules,” when the reality is it’s strategic.
And if we aren’t thinking about strategic governance, then we are missing the boat and we’re going to become irrelevant.
[Music]
[Joshua Barclay] By 2028, an estimated 70 to 80 percent of US financial institutions will be able to receive instant payments, but here is the kicker, folks. Only 30 to 40 percent will have the capability to send instant payments, and that gap raises a big question about member expectations and competitive positioning.
James, with real-time payments, they’re becoming the norm. More people are wanting them. They’re seeking them out. My question for you is, do you think credit unions should make sending instant payments a top priority right now, or is there a case to be made for waiting and seeing how adoption unfolds?
[James McBride] I would characterize it slightly differently, and I would characterize it as member engagement. Real-time payments is a big portion of member engagement. We don’t get to choose consumer expectation. That’s not something that we have the luxury of demanding of our consumers, of our members, or our community.
They demand it of us. And oftentimes that is influenced by large tech companies in this decade and moving forward and how they set expectations for our consumers. Our consumers then set those expectations for us. That’s just reality. So, when you think about, oh, gosh, we can receive real-time payments, we’re going to go live with that at our credit union in about two weeks, maybe three or four.
But in the next month or so, we’re going to be able to offer that service here. When we first started talking about that, my answer was, “That’s not good enough.” We don’t need to engage in this just so that we can receive. We’ve got to be able to send. And it’s because of what you just said. We’ve got to have a competitive advantage against the rest of the marketplace so that we can get in front of people before lagging behind.
So, are real-time payments critical? Yes. Should they be a priority? Absolutely. The thing is, like I was telling a friend of mine earlier this morning, my job primarily as the CEO of this credit union is to make sure that for our membership, we are making our credit union profitable, that we are putting our members in a position that they can have more money off of their money and we can put more loans into the community, right?
Our North Star’s loans to the community. So, we’re not going to forget that. But along the way, we’ve got to acquire deposits. And if we’re trying to acquire deposits and we don’t have services that people expect, such as real-time payments, well, guess what? It’s going to be harder for us to get deposits.
We’re going to have to go buy non-member deposits at plus Fed rate.
So, from a standpoint of what are you doing, think to yourself, how do I get the people that are not coming in my door to come in my door? And whether that’s virtually, electronic, it doesn’t matter. But how do they come see us? Because they’re not now. What do you need? And real-time payments is a key element to what consumers are going to be expecting, not just now, but for a while to come and cross border as well.
Cross-border payments are going to become a thing too. As you start thinking about people who want to have autonomy in how they control their finances, they really want more and more of autonomy in life, that’s something that younger generations are looking for. And I think that that’s something that you’re going to see become more and more important.
And if you’re not doing it now, you’re already behind. I know core solutions that are having forums for people to talk about, “How do you think we should approach this?” Now, I’m thinking to myself, “Guys, it’s not that hard. It’s sending money and it’s receiving money. What do you mean we need to have a conference about this?
Let’s just do it.”
[Joshua Barclay] Stacy, what is your take on the instant payments? Obviously, most financial institutions, credit unions in particular, they don’t have that capability right now. What are your thoughts on where you’re at with it, adopting it, how fast you can move concerns, all of that?
[Stacy Armijo] So, it is the most important project on our 2025 project list is implementing real-time payments. We aren’t where James is yet, but we’re only like two months behind. So, we are doing receive first within the next two months or so. We will be live with receive, and we are scheduled to be live with send by the end of the year for exactly the reasons that you’re describing.
So, I consider myself still relatively new to banking and credit unioning. So, I will hit seven years at Amplify this summer, and before that, I was not in banking. So, this notion that I suddenly started hearing in this industry when I joined was a new phrase to me, and it was “fast follower.” We all want to be fast followers on doing whatever the new thing is.
And I came from a world where I was working with a lot of tech companies and healthcare and real estate and all these other areas where the word was, we want to be innovative. We want to be first to market. That was all of the language. And I was like, “This is the first time I’ve heard aspirations for fast follower.
No one wants to be first. Everybody wants to be second.”
And I understand this is banking, right? And so, things can go awry. And when they go awry, really bad things happen. Yeah. And so, I understand why that is an instinct in this industry, but at some point, somebody’s got to stand up and say, “I’m ready. I’m ready to dive in. I’m going to do the thing.
I’m going to make the mistakes.” Because the biggest mistake we make as an industry is waiting too long. That has been my biggest lesson in being in banking is in particular with payments, how long it takes and how complicated payments can be because you’re weaving together a hundred different vendors and contracts and timelines and whatnot.
So, if you aren’t working on it today, you are five years behind, even though, like, do I believe there is crazy consumer demand for this right this second? No, we don’t have people walking into our branches asking for this. We don’t get online chats that say, “When are you going to have real-time payments?” We aren’t seeing that evidence in our membership base, but if we wait until they’re asking, we are way behind.
So, we have to be ahead of our customer and have the capabilities that we believe they’re going to need, and then we will certainly not get left behind by them and then have a value proposition to the people we don’t serve today.
[Music]
[Joshua Barclay] The CFPB’s new Open Banking Rule, it’s been in the news for the last few months, I think since the fall, since around October. It’s going to give consumers more control over their data and it’s going to push institutions to innovate, so they say. Now for credit unions, James, the mandate is interesting because institutions, credit unions in particular, under a certain asset class, they will not be required to comply to this particular ruling.
But, and here is the big but, it probably will put pressure on credit unions from a competitive standpoint, but I could be wrong. That’s why I’m the host and not the guest. So, James, tell me, do you think this Open Banking Rule will impact credit unions like yours or is this a bunch of nothing?
[James McBride] Well, I’ve been talking about open banking for a long time. And so, I don’t need the CFPB to tell me that this is something that we need to be doing for our consumers. And to answer your question, just about CFPB rulings and oversight, my opinion on that is while we do report to regulators, we report to the American consumer first, and when the American consumer is told, “Oh, it’s okay now for me to own my data,” when they go to a financial institution who says, “Nah, we’re not doing that,” guess what?
They’re probably not going to do business with you. So, to that end, we cannot arbitrarily say, “Well, we’re not going to do it because we’re afraid that we’re going to lose accounts.” That in essence eliminates accounts on our books. It eliminates potential accounts on our books.
So, where I think this provides great opportunity for credit unions of all asset sizes, by the way, is that you become part of a collective, right? So, the Shared Branch Network was introduced a long time ago and it’s far from innovative today, but it was really one of the first open banking type things that credit unions did probably, I think in the mid-’80s.
I can’t remember exactly when it came to life, but this is not really that different. It’s just evolved. Now you have people that can digitize their footprint, right? And again, I talked about autonomy a little bit earlier. It gives more autonomy to the consumer. So, the consumer gets to choose. And the pressure that it puts on the credit union, and by the way, to our providers, is let’s stop giving poor service, poor solutions, old tech, because you know what?
Here’s the reality. Chime today, a digital player, has more active users than all but one credit union in the United States. So, if we’re thinking to ourselves, “Oh, gosh, we don’t have to go this way.” It’s already here. It’s already here. People already expect this. And getting in on the game allows us to say, “You know what?
Now we’re going to be competitive. Now we’re going to target market to our consumer. We’re going to find the people who believe what we believe.” And it puts the onus on us to deliver on that. That is where we’re going to start making hay as an organization, but also as an industry. Right?
Credit unions have the most collaborative financial layout in the entire world. American credit unions are one of the most collaborative financial groups that there are. I don’t think that’s going to go away. I think it’s going to be strengthened as a result of this, and it’s going to make us be able to compete in ways that, frankly, some of the major players aren’t going to be interested in.
And I think that’s where the real innovation’s going to come from is when we start working together to make this even better for the consumer. That’s what I think is on the table that’s coming next.
[Joshua Barclay] So, more collaboration, less about competitive pressures. And I want to comment on what you said, James, I think you’re right. If this is putting competitive pressure on you, then you’re not competing already. So, [Laughter] if you’re being proactive, this should not put competitive pressure on you.
Stacy, what is your take on this whole CFPB open banking thing?
[Stacy Armijo] I’m going to start right where James did at the top. If we’re waiting for the CFPB to tell us how to serve our customer best, we’re doing it wrong. So, as it relates to sort of the regulatory requirements around this, that’s the wrong conversation. The right conversation is open banking is going to create for consumers what we once didn’t have for our cell phone numbers.
Remember when you couldn’t carry your cell phone number from one provider to another, and then all of a sudden that became portable? Because the cell phone companies didn’t want you to be able to do that. Customers wanted it, cell phone companies didn’t. And they didn’t want it because they wanted to make it really hard for you to leave.
Ultimately, the customer’s always going to win. And so, if as institutions, we wait until we are forced by regulation to do the thing that we know the customer wants, then we’re behind the eight-ball yet again. And as I think about, like, we should have a little more confidence in our products and our services.
If your value proposition is I’d like it to be really hard for you to leave.
[James McBride] [Laughter]
[Stacy Armijo] Come on, y’all, we can do better. So, be ready to win is what I would say. Don’t be afraid of all of this from a regulatory point of view. Be ready to win your customer every day. So, one thing, you hear me say customer and not member, right? And I know that is not credit union-y. And it’s not because I don’t know a member of difference and a customer and all those things.
I do it on purpose. Because when we say member, I realize from a governance point of view, these are our members. But when we say member, I feel like that implies a level of loyalty that I don’t think actually exists in today’s consumer. It’s easy to take a member for granted, as if they have invested philosophically in you, not as if you had the best home loan rate at the time that they were getting a home loan, and that is how they became your customer.
If you treat them like customers, you have to earn a customer every day, and they can leave you every minute. And if strategically, you adopt that mindset, you’re going to think differently about your services and your products and all the things that you have. So, our industry tends to be bad at, let me convince my member to want what I have, instead of let me understand what my customer wants and needs and create product services and delivery channels that match what they need.
And so open banking, to me, just gives us positive pressure to do that, and if we do it well, we’re going to win.
[Music]
[Joshua Barclay] That brings us to the end of the show. James, give us your final thoughts, plugs, anything you want to put it out there.
[James McBride] I would just say follow me on LinkedIn. If you want to hear more of what I’m thinking and what I’m saying, I talk about it almost every day. But the reality for us here is these were great topics. This is a great conversation. And for our listeners, if you’re not part of this conversation, if you’re sitting on the sideline and you’re wondering, when should I get in?
The answer is yesterday. So, don’t wait. We’ve got to move our industry away from being risk averse to consumer-centric. And if we can do that, we have a chance to thrive. If we fail to do that, it’s just going to die. You’re going to die. So, let’s not do that. Let’s have more credit unions winning, less credit unions failing, stop being risk averse, become consumer-centric for the win.
Let’s go.
[Joshua Barclay] Stacy, final thoughts, plugs, anything you want to put out there into the world, go ahead.
[Stacy Armijo] I wrote down what James just said. Let’s have our industry go from being risk averse to consumer-centric. That is such a concise and effective way to speak about what feels to me like our biggest obstacle, but also our biggest opportunity. I am a firm believer there is no better time to actually live the value proposition that is a credit union.
Today’s youngest consumers, they make commodity choices based on things that are important to them beyond dollars and cents. And credit unions have a story to tell around that, but it’s got to be a story that is relevant to today’s consumer. It’s got to be something we can stand behind in a way that I feel like we have some ground to make up on that.
And they aren’t going to listen if we don’t have great products and services.
I mean, it is table stakes, what they’re looking for in terms of digital products and services, about personalization, about all the things that we’ve been talking about here. That’s really hard work for credit unions to actually deliver on that promise. We can do it if we’re willing to do it. I feel like we absolutely can take market share from other institutions, but we have to put the work in, and we have to change our mindsets.
And so, it makes me excited to know that there are other thinkers like James in the industry that are seeing this way, working this way, doing these things, putting pressure on our vendors that we’re relying on to help us go in this direction, all of those things that are important to make us successful.
If we’re willing to do the work, the opportunity’s there for us.
[Joshua Barclay] Well said, Stacy. If somebody wants to get ahold of you, let’s say someone’s listening and they love what you’re putting down, what is the best way to get in touch with you?
[Stacy Armijo] LinkedIn as well. And nobody can ever spell my last name, so I’m just going to tell you what my actual handle is. It is Stacy, S-T-A-C-Y dash A-R-M-I-J-O. That’s me on LinkedIn. I’d love to hear from you.
[Joshua Barclay] Thank you so much, Stacy, for being my guest co-host today. And thank you, James. I love talking about this stuff. I’m so passionate about it. And I’m so thankful for guests like you. So, I just want to let you both know I nerd out about credit union leadership, and I love having these conversations.
So, thank you both. Thank you to the listeners who are out there. Thank you for supporting the show. If you like the show, remember, please follow us on your podcast player of choice. And if you want to be a guest, or you would like to talk about sponsorship opportunities, head to growyourcreditunion.com to learn more.
Thank you for listening, and we will catch you next time. Bye-bye.
