By John San Filippo
Back-to-back credit union conferences were held in Nashville the week of May 5, 2024: The inaugural EDGE technology conference May 6-7, and THINK24, traditionally the annual conference of the former Co-op Solutions, May 7-9.
During his keynote address at EDGE, America’s Credit Unions CEO Jim Nussle spoke at length about the need for “relentless advocacy.” And while the big news at THINK24 was the unveiling of the new Velera brand that consolidates PSCU and Co-op Solutions, Velera CEO Chuck Fagan also touched on the need for technology providers like Velera to support the industry’s advocacy efforts. Finopotamus later spoke with Fagan at THINK24 about the intersection of technology and advocacy in the credit union industry.
A Growing Role
Asked whether there’s a discussion to be had about technology’s increasing role in the industry’s advocacy efforts, Fagan responded, “There is, and the reason I say that is the CFPB (Consumer Financial Protection Bureau), Congress, all the regulatory aspects of the industry are seeing the rapid adoption of technology. And as credit unions represented by America's Credit Unions, our role at Velera is to support what Jim (Nussle) and his team are doing.”
Fagan offered new payment methodologies as one area where Velera will play a supportive role in advocacy. “There's going to be regulation over these at some point, especially with consumers now a bit strained with inflation and all the things going on as they do buy now, pay later,” he said. “Consumers are stacking those and it brings up the potential for consumers to get in trouble from overextension. There is going to be oversight on that. The technology around payments that's developing plays directly into the advocacy that America's Credit Unions represents.”
Velera, he added, will do whatever is needed to support advocacy efforts across the industry. “Whether it's data information, whether it's financial resources, we have to do our part to support these efforts. If regulation comes down and hits credit unions because of the irresponsibility of what some other companies are doing to the consumer, it hurts our industry. There's a direct tie in the momentum of innovation around payments, around digital access, that ultimately could impact our space.”
Credit Union Technologists Need to Pay Attention
Trditionally, technology workers at credit unions have not focused much on issues such as advocacy. Finopotamus asked Fagan whether he thinks that’s something that needs to change.
“I do, and the reason I say that is, we grew up in this era where you walked into the branch, you called the call center and you dealt with people,” explained Fagan. “But service and the way you interact with your financial institution now is so different because of the smartphone and other technological devices that are being used. As [technology departments] are building new ways for members to access the credit union and building ways for members to borrow more on the electronic front, data is being used more and more. It all rolls up into an advocacy push that I don't think will ever stop. We've now entered such an expectation period around technology, there's always going to be some scrutiny from a ‘protect the consumer’ side.”
The discussion then turned to the relationship between advocacy and member experience.
“There's direct correlation from my perspective, and I think technology has driven a lot of that,” noted Fagan. “But I think also the advent of the CFPB’s direct involvement in trying to protect all aspects of the consumer has probably amplified that.”
Education Is Key
According to Fagan, advocacy methods are evolving due in no small part to evolving technology. “I think it's all wrapped into how we've attacked advocacy in the past. We have 140 million credit union members across the country. It's why we have the tiered system. We have America's Credit Unions advocacy in Washington, D.C,” he continued. “Then we have the state leagues supporting at a more local level where the credit unions can make the most impact in that local, statewide level. As the CFPB tries to provide this oversight function, it's going to get down to working with state senators, state representatives. I'm not putting them down in any way, but I don't think a lot of the folks in Washington understand the technology that's being used.”
A large part of advocacy needs to be focused on education, Fagan added. “There's a whole education process that has to occur ongoing,” he stated, “and the only people that can provide that are the technology folks. Again, using buy now, pay later as an example, as the CFPB evaluates what kind of regulatory oversight they can put on it, I think it's up to the technology folks working with the advocacy teams at a local level to educate those people who are representing them in Washington. That way, the representatives get an understanding of what credit unions are trying to do for their members.”
Fagan noted that legislators tend to see technology vendors simply as companies trying to make a profit. “They don’t always appreciate the impact that technology can have on consumers,” he said. “That's where credit unions need to be.”