The Democratic majority in Washington, D.C. has made clear that enhancing diversity, equity and inclusion (DEI) in the financial services sector is a priority. We’ve witnessed this in hearings on this very issue, in proposed legislation and by the nominees who have been chosen to lead federal agencies. Their mandate to financial institutions is to ensure that everyone has access to safe and affordable services.
Samira Salem, vice president of diversity, equity, and inclusion for the Credit Union National Association
As not-for-profit financial cooperatives with a statutory mission to promote thrift and provide access to credit for provident purposes, credit unions are better positioned than other financial services providers to advance DEI. It’s at the heart of what we do, from our founding to our latest cooperative principle. It’s why financial well-being for all is so vital to everything that we do.
The work to advance DEI and fulfill our mission must evolve with the world around us. We’re in the midst of a global pandemic that has left many financially vulnerable. Political conversations have shifted to focus on those left behind or left out entirely. It’s certainly time to be intentional about opening our doors, assessing what more we can do to remove barriers to serve the underserved within our fields of membership and offer them equitable financial services.
Credit unions face legislative barriers to deepening financial equity and inclusion — namely the field of membership requirements which limit who credit unions can serve. When it comes down to it, it’s a modern-day form of federally sanctioned exclusion. Relaxing or eliminating these restrictions aligns our advocacy goals with those of policymakers on both sides of the aisle who want to ensure their communities have expanded access to affordable and equitable financial services.
Ultimately, we must be ready to show policymakers what credit unions are doing with the powers they currently have to fulfill their mission to deepen financial equity and inclusion, and advance financial well-being for all.
DEI is one of the biggest tools credit unions can leverage for growth in an increasingly diverse market.
Recent research by CUNA evaluating credit union DEI efforts supports this. The study shows that credit unions which invested more in reaching out to and serving Latino communities saw higher membership, asset and loan growth than those that did not. Furthermore, portfolio quality either improved slightly or remained unchanged for those credit unions that invested in reaching and serving Latino communities. We believe these findings are not unique to Latinos but hold true for efforts to reach and better serve diverse members more generally.
Countless studies find that diverse and inclusive organizations outperform homogenous organizations. For example, research from McKinsey & Company notes that organizations with higher levels of diversity and inclusion experience improved financial performance, while research from Deloitte shows that DEI increases team performance, decision-making quality and collaboration. Another study by Deloitte illustrates that diverse and inclusive organizations are more successful at attracting and retaining top talent.
Point West Credit Union in Portland, Ore., a $100 million-asset institution with 25 employees, shows that even small a credit union in an overwhelmingly white community can benefit from deepening its DEI efforts. Point West was at the brink of closure during the Great Recession but is now thriving because the credit union’s leadership saw that it could grow and become more relevant to its community by deepening its focus on providing equitable and affordable access to credit to underserved communities, including the Black and Latino communities who otherwise might not have access to financial services.
Amy Nelson, Point West’s president and CEO, recounted how in the wake of the Great Recession, “We…found that our lending portfolio was strongest with our diverse community members who were part of our credit union.” As part of their DEI journey, Point West diversified the organization and have consistently used the National Credit Union Administration’s Voluntary Credit Union Diversity Self-Assessment to measure their progress against their DEI goals. They’ve learned that providing access to credit and listening to members is key to providing a path to financial well-being, remaining relevant and ensuring continued growth.
Credit unions are doing great work to advance financial well-being for members, and by deepening our commitment to and becoming more intentional about DEI, we strengthen our advocacy, our institutions become stronger, and we come closer to fulfilling our mission to provide financial well-being for all.