Institutions seeking to not only attract younger members but also provide a broader suite of financial services are recruiting leaders from the millennial generation and younger to help meet the needs of underserved communities.
“One thing I learned while in business school is if you want to attract your target market, hire your target market and get out of their way … if you represent your target market, it's not difficult to attract and retain them,” said Monica Belz, president and chief executive of Kaua'i Federal Credit Union in Lihue, Hawaii.
Credit unions and banks alike are
As a millennial executive in her late 30s, Belz has recruited talent from her own generation and younger to help sculpt the $131 million-asset credit union’s practices and begin to organically think about DEI.
“I've hired a fleet of millennials who are incredibly diverse and inclusive … we are from all walks of life and speak different languages and have been exposed to so much more diversity than our parents and their generation,” which lends to decisions, products and an overall consumer culture all being more relevant to the target market, said Belz, who has been CEO of Kaua'i FCU since 2018.
When hiring, Belz places less emphasis on job candidates' financial experience and instead focuses on finding people with a passion to help their local communities.
“I don't want them to know too much about the financial services industry, because I don't want them to be limited in their thought, their innovation and their creativity, to what structures already exist … I want them to think so far outside of the box, that they come in with questions and ideas that we would never [have thought of],” Belz said.
Following the 2020 murder of George Floyd,
Some young credit union executives, despite having worked in the industry since as early as high school, still encounter concerns about their age and professional career.
Jared Freeman, the 33-year-old president and CEO of OnPath Federal Credit Union in Harahan, Louisiana, started as a part-time teller with Guardian Credit Union in Montgomery, Alabama, through his high school’s cooperative program.
“Growing up in a home where money was always a point of tension and frustration, [I wanted to] put myself in a position that I didn't have to be worried about money all the time," Freeman said. Through this job, "I fell in love with helping people or working with the public,” he said.
The $498 million-asset OnPath isn't even the first credit union Freeman has led. He was also the youngest-ever head of Alabama State Employees Federal Credit Union in Montgomery at 27, while the $434 million-asset institution's board of directors held members that were 40 to 50 years his senior. Freeman left that role in 2018.
Freeman is improving OnPath's efforts in diversity, equity and inclusion by training executives through the Credit Union Executives Society’s partnership with Cornell University and has begun to recruit for a DEI officer.
“I don't want our DEI journey to be window dressing, I want it to be real,” Freeman said. “For me, it's just not about having a certification to put on the website. It's about real change.”
Credit unions and banks need to ask themselves if they're finding ways to say "yes" to consumers who too often hear "no" from mainstream institutions. Otherwise, they perpetuate a system that excludes the poor and people of color and drive them toward nonbanks, said Pablo DeFilippi of Inclusiv Network and other experts.
Within the top 50 credit unions in the U.S., 94% of new credit union CEOs over the last five years have come from within the industry, according to research from the New York-based management consulting firm Russell Reynolds.
To address the lack of diversity, and to better represent the communities they serve, some credit unions are shifting the makeup of their boards of directors.
Hank Hubbard, the 61 year-old president and CEO of One Detroit Credit Union in Detroit, began to fill openings on the the $57 million-asset institution's board with more diverse talent as positions opened up.
“We did have a traditional credit union board [composed of a majority of] white people from the industry that we were serving,” but when the credit union’s field of membership shifted to its local community, the board remained the same, Hubbard said.
The majority of the board members are now people of color from the community, with two positions still held by white community members, Hubbard said. The average age of the board’s members now stands at around 40, down from an average of 60 five years ago, Hubbard said.
“I felt that a younger perspective would be more innovative and eager to try new ways to serve members…we have to figure out ways to be as efficient and appealing as possible,” Hubbard said.
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“Ninety percent of our decision power is white in a country that in a few years, will be majority people of color…that is a big issue, because we need the voices of people everywhere to be represented where decisions are being made,” Víctor Corro, chair of the CU DEI Collective and CEO of Coopera Consulting, said while addressing attendees at the Credit Union National Association’s Governmental Affairs Conference this month.
