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The CU2.0 Podcast
This podcast explores contemporary, critical thinking and issues impacting the nation's credit unions. What do they need to be doing to not just survive but prosper?
The CU2.0 Podcast
CU 2.0 Podcast Episode 362 Shared Services Are The Credit Union Lifeline
Could shared services be the cure that puts a halt to the epidemic of mergers among credit unions?
Could shared services help credit unions increase their efficiencies and dramatically lower their costs so that they can better compete against big banks and fintechs?
On the show today are Vin Anand, CEO of Member Support Services (MSS), and an evangelist for shared support services at credit unions.
To spread this word Anand has brought in Gene Foley, former CEO of Harvard University Employees Credit Union, Kirk Kordeleski, former CEO of Bethpage Federal Credit Union, and Erin Coleman, SVP of Industry Impact at Callahan & Associates. They are the new MSS Advisory Board with the mission of providing strategic guidance,
Today Foley joins Anand on the show and they are here to explain how shared services can in fact enable credit union independence. That may sound per se self contradictory but it isn’t and on the show you’ll hear how shared services just may be the lifeline a lot of credit unions are looking to grasp.
For more on shared services and credit union independence there’s another show in the library with Anand.
To hear the show with Jim Blaine that Foley discusses, click here.
Listen up.
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Welcome to the CU2.0 podcast.
SPEAKER_01:Hi, and welcome to the CU2.0 podcast with big new ideas about credit unions and conversations about innovative technology with credit union and fintech leaders. This podcast is brought to you by Quillo, the real-time loan syndication network for credit unions, and by your host, longtime credit union and financial technology journalist, Robert McGarvey. And now, the CU2.0 podcast with Robert McGarvey.
SPEAKER_04:Could shared services be the cure that puts a halt to the epidemic of mergers among credit unions? Could shared services, back office shared services, help credit unions increase the efficiencies and dramatically lower their costs so that they can better compete against big banks and fintechs? Two big questions, and on the show today are Vin Anand, CEO of Member Support Services, and he's an evangelist for shared support services on credit unions. Also on the show is Gene Foley, former CEO of Harvard University Employees Credit Union. And along with Foley, Kurt Korteleski, former CEO of Bethpage Federal Credit Union, and Aaron Coleman, an SVP at Callaghan. are now the new MSS Advisory Board with a mission of providing strategic guidance. On today's show, Foley and Anand offer a detailed presentation about why shared services can work magic for credit unions. It may sound per se self-contradictory that shared services can create more independence, but it isn't, and on the show you'll hear how shared services just may be the lifeline for a lot of credit unions. For more on shared services and credit unions, There's another show in the library with a link is in the show notes. And to hear the show with Jim Blaine that Foley discusses in the beginning of this podcast, there's a link in the show notes to that show. Listen up. A very, very old friend of mine who has a doctorate from Harvard spoke at great length the other day with me about how much he loved the Harvard Credit Union. And it funded his crappy used cars through graduate school.
SPEAKER_03:I'm glad to hear that. And
SPEAKER_04:he actually was a big fan. Now, this was before your time there, but I assume the same ethos prevailed. I
SPEAKER_03:don't think so. I spent 40 years at the credit union.
SPEAKER_04:Well, he was in graduate school in the 70s.
SPEAKER_03:Okay. It was before my time then.
SPEAKER_04:And you have 25 years as the CEO.
SPEAKER_03:Right, exactly. But I was there for 15 before that.
SPEAKER_04:How are we going to see that kind of tenure in CEOs going forward? Or will that be anomalous?
SPEAKER_03:No. There was a
SPEAKER_04:time when that was fairly normal. I mean, Jim Blaine has that much time, et cetera, et cetera.
SPEAKER_03:Yeah. So my theory is that the industry has had Three generations of CEOs. The first generation were the Blaine generation, who kind of took it from infancy up until maybe just about the preteen years as an industry, if you will. Well, Blaine did the whole ride. But the second generation was my generation, which took the industry from maybe grade school up until adulthood. And now the third generation is this generation of CEOs that are managing the industry in adulthood. I know that Jim Blaine, I listened to his golden twilight of credit unions. I wouldn't use that same analogy. I think of it more of a life cycle. I think the industry is now all grown up. And he was talking about the school days.
SPEAKER_04:Well, the thing I like about Jim is... People can disagree with him, and he thrives on that.
SPEAKER_03:I know.
SPEAKER_04:I mean, if you send him an email saying that to him, he'd write an email back disagreeing with you.
SPEAKER_03:That's true.
SPEAKER_04:Jim's a wonderful guy. I don't always agree with him, but I always enjoy talking with him. Yeah. He's a true believer in the credit union model. He is. As am I. Obviously, you are, yes. Now, In the email that got me interested in talking about this topic, one of the bullet points that said you can discuss is how the advisory board will help strengthen credit unit independence in today's environment. And I think that's a good jump off from what Blaine was talking about. So because he sees independence disappearing a lot of ways. So how will the advisory board strengthen credit union independence?
SPEAKER_03:It's really, really difficult. to compete as a credit union in this age. It was easier back in the days that Jim Blaine was talking about because there weren't that many competitors in the space. There wasn't as much access to consumer credit. And now, no matter what size the credit union is, it has to have the same product set and the same sophistication as Bank of America does in order to compete. And the The advantage that the shared service model gives is allowing the credit union to achieve scale and to achieve standardization without giving up control. And in the money that it's saving on the back office side, which is just, I want to say commodity, but it's not nearly as important as the member facing side of what the credit union is offering. It allows those limited resources to be redeployed. into the member facing activities that the credit union has. And this model really started with credit unions that were trying to achieve scale and knew that they had to achieve scale in order to compete. And this was one way that they could try to do that. And for me, I know that that There's some interest in why a long-term credit union CEO would be interested in this model. It's reminiscent of the Desjardins model in Canada, where you've got 200 credit unions, all with their own identity, all with their own fields of membership, but they've consolidated and they've used the power of cooperation on the back office side of things so that they could be more effective with the membership. And I think that that's what the goal is. that the advisory board has. I'm really looking forward to working with Kirk Koroleski and Aaron Coleman. All of us are long in the tooth in the credit union world of really trying to leverage that cooperation to the advantage and to keep the independence of the individual credit unions.
SPEAKER_04:How realistic do you think that is? I mean, I think I totally agree. To me, that is the way to keep credit unions alive and healthy going forward. It's that essentially shared services.
SPEAKER_02:Yeah, let me weigh in a little bit on that one, Robert. Build up on the conversation you and I and John Bissell had when you did that podcast last fall with us when Greylock joined us. I think that's the key motivation for us to set up this advisory board and have really trusted leaders from the movement get associated with us to really provide that assurance in many ways that this is something that is real. Well, it's been done. We're the second model in the country which has done it. And there is a fair amount of empirical evidence that the credit unions have retained their independence. They have achieved those savings, and they have been able to deploy that into more deeper relationships with their members. And, you know, with Gene and Aaron and Kirk, there comes that trust factor as well, which I think will resonate with a lot of credit unions who have been looking at this for years now, to my knowledge, but are hesitant to make that next step. because they have concerns about loss of control, et cetera. So I think that that really is going to help us really boost that level of confidence in this model.
SPEAKER_04:Now, CUSOs obviously are a shared service model. Where do CUSOs fit into what you're talking about?
SPEAKER_02:Well, we are a CUSO.
SPEAKER_04:Yeah, I know that, but more broadly.
SPEAKER_02:I think if you look at the vast majority of CUSOs in this country, there are well over a thousand of them now. The vast majority of them are largely what I would call single point solutions or a discrete set of services and solutions pointed towards making money. We are very, very unique. A, if you look at our footprint, it's very, very wide and quite deep. And there are very, very few models of those around. And secondly, we're not set up to make profits. We are a straight cost pass through. So whatever, it's a partnership, whatever we are able to collectively save, that flows entirely directly back into the earnings of each one of the respective owner members. That's what makes us different.
SPEAKER_03:Robert, I was a 13 years tenure on the PSCU Valera Board, which is the largest credit union in CUSO. in the country and I can tell you that having that CUSO structure is a major competitive advantage in the credit union space. I believe in the CUSO model and as Vim is saying it's really going to I think have traction within the credit union space that this is a CUSO and not a not a for-profit vendor. that we've set up. The question was, is it doable? I think, yes, is it doable? Is it gonna be easy? No, it's probably not gonna be easy. But even in the time that I was the CEO at Harvard, I had multiple conversations with other credit unions about trying to consolidate back office lending and to try to do some cooperative processing with other credit unions. So I think that the desire has been there for a long time. It's the solution that was lacking.
SPEAKER_04:Now, Maine, the Maine Credit Union League has some shared back office.
SPEAKER_03:Right, core processing.
SPEAKER_04:Can that model be extended? Not necessarily using the exact Maine technology, but that idea. I mean, why can't all the institutions in Massachusetts be on the same core processor?
SPEAKER_03:You know, I believe that part of it is really comes down to governance and control, which is one of the competitive advantages that we have with this model is that I think that the. Unlike the Canadian counterparts, the American CEOs are probably much more concerned about control. But with this model, they're going to maintain that control. They're going to maintain their own separate field of memberships, their own positioning strategically, their own identity. It's really just consolidating the back office, which I do think that there is desire out there. to do that. I do think it takes the right combination of credit unions and the right credit union CEOs to agree to this, though.
SPEAKER_02:Yeah. The other aspect to the contrast with something like what the main has is if you're on a card platform today and you're probably in a long-term contract, it's going to take a while for you to get out of that contract and or pay a heavy... withdrawal penalty, et cetera. So that may kind of curtail things. But the other bigger aspect about it, that is sharing in some technology processing. Our model is totally application agnostic. Our model is really what we're doing is providing shared employees. And that's where the labor savings are the key piece that's really generating the success of our model. We're operating on a multitude of different applications and systems today, and we're pretty agnostic as long as what we're doing is exactly the same thing for every credit union. That's the real big difference. You have a lot of models out there where everybody's subscribing to one set of technologies. They may not be totally happy with it because it's not doing exactly what it wants with them. And our model is, as long as it's the same kind of functionality of the software you're using, we'll work in all of those software.
SPEAKER_04:Now, let's say Harvard Credit Union says we want to be part of this. It's a billion-dollar credit union. What would change for them?
SPEAKER_03:Well, the only thing that would really change is that with the savings that I have going into the shared solution, I would be able to redeploy that into other member-focused activities that I could concentrate on rather than the back office. In this particular Boston job market, in particular to VIMS Point, hiring is really a very difficult, very, very competitive marketplace. You've got a lot of universities here. It would take a big headache away from me in terms of my staffing resources, I would still have a direct contact to the shared service company and regular insight into the processing so that the Largest, I think, change that would be for Harvard or would be for other credit unions would be there is this ability to save in terms of overhead, in terms of jobs that you actually have. I think that most credit unions would probably initially be somewhat reluctant to actually cut staff. although it's going to allow them to do that long-term. But in the short term, I think that staff would be redeployed into other areas of the credit union that are more service-oriented.
SPEAKER_04:Yeah. And that's actually a sticking point for many credit unions is they deploy AI. I say, well, how are you going to cut staff? And they say, oh, no, we're not going to cut staff. And then one very smart guy said to me, look, what's going to happen is that there will be staff attrition. It'll occur at this rate. He gave me a number. And he said, you know, other people will decide to move on, go to different jobs in other institutions. In five years, it'll all be handled. And he was a patient man and didn't want to fire staff. And he was willing to put five years into it.
SPEAKER_03:I'll tell you another direct example from the credit union at my time there is that my deposit operations people used to come in in the morning and they had 11 systems that they were signing on to. They had 11 disparate systems that they needed to be expert in. And even though that was a billion dollar credit union, you don't have the really depth of bench where you've got six or seven people who know everything each of those 11 systems. You've really got a lot of risk because when Sally's on vacation, Joni's the only other one who knows how to use that system. And if her child is sick and she's not in that day, you're scrambling to try to get your deposit operations to be done. It takes a huge headache out of the picture in terms of most credit unions are running multiple, multiple standalone systems that they're no longer having to support.
SPEAKER_02:I think the other point, Robert, to your point about staff shortages is at some stage, given all the headwinds and all the challenges retail financial services generally is having today, but credit unions in particular, particularly the smaller ones, is to really ask yourself the question, what is your mission? Is your mission to really drive as much value and intimacy and be the financial institution of choice for your members, or is it to provide jobs in your local community? And somewhere along the lines, credit unions today, we know today, the ones we're talking to, they're facing that very, very tough choice today in this fair face. So this is where we think our solution can really, really help them to, continue to make their independence and their relevance to their membership that special a special source which separates the credit union and its relationship with its members than does say a regular bank
SPEAKER_04:what kind of time frame are you thinking about them
SPEAKER_02:in terms of
SPEAKER_04:when this really takes root, starts to change the way the credit union industry operates?
SPEAKER_02:Yeah, great question. So we have targeted, and it's not a secret because we'd be pretty open about it, is that we want to grow this CUSO to$10 billion of assets under service. And we think with that kind of scale, That is really going to move the needle significantly for our owner members in terms of their operating expenses and their efficiency ratios. And I think that will get a lot of attention when credit unions start seeing their results. We put ourselves to the horizon of three to five years to get there. And I think by the time we get there, we'll probably be knocking on the door of getting to$20 billion.
SPEAKER_04:Gene, did you do any mergers when you were at Harvard? You probably did some shotgun weddings at the behest of NCOA, but did you do any meaningful mergers?
SPEAKER_03:No, we actually didn't. I very much stayed true to the common bond, which was the university. So we were not doing mergers. Certainly now, I've started this consulting practice. That's all that anybody is doing is mergers, but no direct experience as a credit union CEO.
SPEAKER_04:Well, Kornileski is in the same boat. I mean, he is very proud that the growth at Bethpage was entirely organic. Now, he did do a few shotgun marriages with failing
SPEAKER_02:credit unions. Yeah, very few. One they did was with Montauk. That was because of the medallion loan. So, yeah. So this model is actually the one I worked with Kirk on what he set up for Bethpage and his other two partners. This is exactly the same replica model.
SPEAKER_04:Interesting. It certainly worked at Bethpage. He drew that thing fantastic, great. He painted within the lines. He wasn't doing screwy stuff.
SPEAKER_02:Their efficiency ratio is around the 66-67%. Their operating expenses are below 2%. That was exactly the goal of that model. That's, in my humble opinion, one of the key enablers to enable them to fuel that growth.
SPEAKER_04:Now, Vim, when you talk to a big credit union, do they say, we don't need this? This is, you talk about little credit unions. What do they say?
SPEAKER_02:No, actually, it's interesting. You know, when you and I and John Bissell talked last, John Bissell, 1.6 billion was four times the size of our current credit unions. And this whole conversation about big and small, really did not materially surface because look at the mergers that are going on right now, Robert. I mean, we got one, which I think is going to get to 19 billion of assets under management. And there's another one, I think, which is going to get to about 13 billion out of the...
SPEAKER_04:Well, there's First Tech DCU, which... There's First Tech DCU. So all the calculators that we
SPEAKER_02:have. Yeah, yeah, yeah, yeah. So... I think there is universal recognition that the name of the game is scale. And how do you get to scale? I mean, you have two options to get to scale. You merge or you do something like what we've got.
SPEAKER_03:You don't reach it organically. I can say that. Even having grown a credit union from some 70 million to a billion, I can tell you that the pressure really does not decrease at that level.
SPEAKER_04:Oh, I would agree. And it's funny, when I first started writing about credit unions, a billion dollar credit union was big. Now the benchmark of big is 10 billion. It's really, it's weird. And there are only a handful of those. So what about the other 4,000 plus? I don't know. Still credit unions.
SPEAKER_02:That's why we feel, obviously we're biased, right? We feel our model is such a salvation because if you can get into this sort of setting where you are building scale in back office and utilitarian activities, et cetera, bringing up some very, very valuable dollars, which enables you to do deeper things around products, enables you to invest in technologies, although we're also now expanding our model to have shared investments in new technologies, All of that enables you to just keep that intimacy with your members and keep relevant to them.
SPEAKER_04:So are you starting something that will be similar to the Circle Fund?
SPEAKER_02:No, no, we're not an investment vehicle. We are a straight, pass-through servicing organization. Simple and straightforward. Takes a lot of effort to make it happen. It doesn't happen overnight. You know, you're bringing in a single organization's processes and functions and culture, which has grown over a period of 40, 50 years into something new. That doesn't happen overnight. Well, we've got a good playbook on that, a well-established, proven methodology to do that. That's all we are. Pure, straight, simple servicing organization.
SPEAKER_04:And yeah, as we've discussed, to me, it's obvious that To a member, a credit union's back office is neither here nor there. As I've said to credit union CEOs, no prospective member has ever come in, knocked on your door and said, tell me what your core system is. I need to know before I become a member. No one has ever done that. And if it was, it was the president of Scimitar who wanted to make a sale. And really, the truth is, I happen to know the core system of the credit union I use, but I don't care. It's perfectly adequate. It's fine. I don't care what it is.
SPEAKER_03:Even in core conversions now, the core system is no longer what drives the core conversion. It's the mobile application and the online banking application and the member-facing applications or the applications that more than the core are the competitive advantage that credit unions are converting for.
SPEAKER_04:I've seen data, I think, from Cornerstone where about the time you became CEO at Harvard, probably 90% of your tech budget went to core. And now institutions that size, it's more like 40% of the tech budget goes to core. Yeah,
SPEAKER_03:that's the case for sure. I
SPEAKER_04:do think an issue that you touched on here is difficulty in staffing and that this solution will make that easier or solve that staffing problem. And Gene, you're suggesting you had staffing difficulties in Boston, Massachusetts and Cambridge, Massachusetts, which is astounding given the number of college graduates who get spat out by the system every year. I'm not saying what you're saying isn't true, but I find it fascinating that you did have that problem.
SPEAKER_03:Yeah, it was a problem. Luckily, I had the university market to tap into as well. But as you know, Boston is a financial hub and you're competing against a lot of other players out there for talent.
SPEAKER_04:Oh, you can go work at Fidelity and make a whole boatload of money if you're any good. There's a lot of options.
SPEAKER_03:And I think even... I think especially for the credit unions that are under a billion dollars, I think that war for talent is for the small credit union. That's probably the largest competitive disadvantage that they have is being able to attract and keep good talent and folks that they can provide some sort of a career path for. I think that that's probably the biggest challenge for small credit unions now.
SPEAKER_04:I think you're right. Now, Vim, does your solution help solve the, and Gina mentioned this, the bench strength issue where many credit unions have limited bench strength. And I remember talking with a top 10 credit union, a big credit union. I asked, why are you doing a core conversion? Well, apparently the guy who kept that thing running for 45 years was retiring. And it was too hard. It just didn't seem profitable to train other people. to fix the big problems that it just seems smarter to do a core conversion. And this was a huge,
SPEAKER_02:this is a huge credit unit. So that's the other beauty of our model because we're creating sufficient scale in each area. whether it's in underwriting and lending, whether it's in processing, whether it's in servicing, on the payment side and deposit operations, et cetera, we're keeping enough because we're consolidating and scaling. That allows us to create enough bench strength in each one of those areas so we're not just one key person dependent. The other thing, which I think you're aware of, Robert, is that half our work is done offshore in India. where we have a labor force, where it's a country of 1.4 billion people, 60% of whom are under the age of 40. So it's a very young country, highly educated. They've been in this business of providing offshore business processing services and IT services for a very, very long time. And that enables us by leveraging that to ensure that, A, we've got some labor arbitrage advantages, but we are also not in this funk all the time that somebody leaves us and then we're stuck for replacing them, whatever, because we have access to such a vast labor market here in the United States. And it enables us to also have a variable model where if volumes go down, we're not facing this issue of, oh my God, I got to lay off staff, and then all of a sudden we do an exciting home equity product, and all of a sudden all the home equity applications are through the roof, and how do we staff for it, et cetera. So we've got a variable model as well built into our service delivery here.
SPEAKER_04:Do the large technology companies in the U.S., the service credit unions, things like Jack Henry and Pfizer, do they offshore work to India too?
SPEAKER_02:All of them.
SPEAKER_04:Yeah, that's what I would assume.
SPEAKER_02:All of them, Robert. All of them are, every one of them have got their software being written and developed, not just in India. India takes the lion's share, but there is a burgeoning market now in certain parts of Eastern Europe At one stage before all this war started, Ukraine had a very deep IT bench. That, of course, is now gone.
SPEAKER_04:That's been dispersed, and some of that's come to the
SPEAKER_02:U.S. In U.S. and in neighboring countries as well. A lot of that's in neighboring countries.
SPEAKER_04:I imagine Germany's gotten a ton of it.
SPEAKER_02:Actually, Germany hasn't popped on my radar. I see more coming out of Poland, interestingly. I've seen a lot more come out of Hungary. Romania has been the other place.
SPEAKER_04:Interesting.
SPEAKER_02:I think the key thing for us really is to get like-minded CEOs who are really, really interested in the long-term independent survival and growth of their credit unions and embrace the notion of collaboration and partnership as a part to do that. That's what's key for us.
SPEAKER_04:And that's where Gene and Kirk come in since they can talk CEO to CEO.
SPEAKER_00:Right.
SPEAKER_04:And have credibility since they both have distinguished histories in that job. Exactly right. That's your
SPEAKER_03:job, Gene? It is, you know, and I struggle with just in terms of the industry. We're offering the lowest cost products out there and yet our customers processing costs are the highest out there. We're competing with the large players out there. You always cite Chase Robert as one of our competitors and the fintechs that are out there. They're processing transactions for a fraction of what credit unions are processing transactions for, and yet their products are more expensive. I think that this model really addresses what one of the fundamental issues that we have as credit unions is keeping our products as cheaply and greatest value that we can possibly provide for our members when the model of having so many disparate systems that we're operating is driving those transaction costs so high. Explain that. Our dependent upon third-party providers to do our processing. And typically, there's not just one third-party provider that we can negotiate with any kind of scale pricing. So credit unions as an industry, I think, are probably paying top dollar to the vendors that we're using. To my knowledge, there are no significant credit unions that have got proprietary systems that are much less expensive to operate than having a third-party provider out there. And this particular model with membership member support services, you're gaining that efficiency in the back office so that you can be more competitive with your product pricing because it's not costing you as much to process that transaction.
SPEAKER_04:Right. I totally agree that no credit union can compete in terms of expense against Chase, but Chase just has massive scale.
SPEAKER_02:Yeah. It's a double-edged sword because you're a smaller institution. You are already disabled from negotiating the best deal you can from these vendors. And then you've got to compete at a price point which makes you competitive. So, I mean, that's what really– you've got so many headwinds as a smaller institution company. I forget comparing to the Chase's. I mean, just in terms of the regional banks here, all the fintechs, as Gene was saying, I mean, you look at SoFi and for our credit unions in New Jersey, I mean, SoFi is eating our lunch right now in the consumer and now in the home equity market.
SPEAKER_04:SoFi would probably be feasting too in greater Boston.
SPEAKER_02:Yeah.
SPEAKER_04:Because kids and young people are a wonderful market for SoFi.
SPEAKER_03:Yeah, they are. I'm doing a lot of work in the student loan area. And needless to say, SoFi is the number one competitor for student loans for credit unions that are offering student loan programs to their members.
SPEAKER_04:And do many Massachusetts credit unions offer student loans?
SPEAKER_03:Yeah, I would say probably almost half are offering student loans. They're small portfolios, but they're offering them. It's folded into financial literacy and life cycle of the financial life cycle of the member, trying to attract younger members into the credit union membership.
SPEAKER_02:I know they have a much higher risk tolerance than any credit union would be able to do. So that's the other disadvantage that credit unions face.
SPEAKER_04:I've often thought that credit unions have too much risk phobia. A Chase, if it chooses to, can take a risk on a home loan. Because if it all goes bad, it makes no difference. No one cares. Whereas a credit union will obsess about this approving or declining a loan.
SPEAKER_02:Well, the regulator, I would submit a gene. I'll let you weigh in, but I think the regulator has a
SPEAKER_04:fair amount of... I think you're right. I think you're absolutely
SPEAKER_03:right. Well, there's nothing worse than going to your board at a board meeting and disclosing a large charge-off. I would have to say, as a CEO, that's an experience that you really don't enjoy at all. So it's also, I think, that having volunteer boards who are not lenders by trade, they don't understand the risk-reward trade-off sometimes.
SPEAKER_04:So,
SPEAKER_03:Viv, are you out
SPEAKER_04:pounding on doors of credit unions? to interest in this.
SPEAKER_02:I have, and that's why I'm going to be leaning on Gene and Kirk and Aaron to facilitate and introduce me to people they know who would be interested, like-minded. This is very much a relationship play. It's not as if, you know, we're out there providing transactional services. I mean... what we're all about is a pretty significant change for a credit union, which will have long-lasting positive results. But it is a significant change. So having that sort of warm touch, that warm introduction, that reassurance would be so, so critical for our go-to-market strategy.
SPEAKER_03:Something that just has cropped up in my consulting practice over the past month or so is really a new focus on efficiency. When the specter of taxation raised its head, I think a lot of credit unions that weren't paying attention to their efficiency suddenly started modeling what if they were having to pay taxes, and they realized that 80% efficiency ratio is not going to get them where they need to go. So I think that Just that, and hopefully we've dodged the bullet here, but just that specter of taxation has raised a new awareness of how critical it is for the credit union to run as efficiently as it possibly can.
SPEAKER_04:If taxation had been, tax exemption had been taken away, would that have impacted you severely, Gene, at Harvard?
SPEAKER_03:No, we would be able to... handle the tax burden itself, I don't think it would have impacted us a lot. We would not have been happy about it. I don't think that it would, it certainly wouldn't have changed our mission or our structure, member owned and democratically controlled. So we wouldn't have been happy about it, but we would have been able to pay taxes if we needed to. Would have hoped that there was something else that would have been on the plus side if taxation was the takeaway. What else could we get that would have been given to us to help us?
SPEAKER_04:Yeah, I think what you're saying would have been true for most credit unions. I think the biggest impact on your credit union would have been you would have had a monstrous accounting bill.
SPEAKER_03:Exactly.
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