Brian Branch retires from the World Council of Credit Unions (Woccu) in June, after more than three decades in the movement. He has served as Woccu’s president and CEO since 2011 – one of the longest stints at the helm of the apex body.
His appreciation of credit unions started as a child, when his father secured a loan from a local credit union, after being denied credit by a number of banks. With this loan, the family was able to buy the farm he grew up on.
“I always had an appreciation that credit unions were more available to working people and that stayed with me while I was a student,” he says.
He took a Bachelor of Arts in government and Spanish from Bowdoin College, Maine, in 1979 and earned an MA in Latin American studies at the University of Texas-Austin in 1981. His studies continued with a Ph.D. in economics from UW-Madison in 1990. While working on his doctoral dissertation, he started working part-time as a financial analyst for the Credit Union National Association (Cuna). Through Cuna he got to work on various projects with Woccu, which he joined in 1990.
Back then there were significant differences across geographic regions, and between large and small, or basic and sophisticated, credit union systems. “The differences are not as substantial now,” he says, “because the challenges are very consistent. The challenges – regulation, technology and market competition – transcend borders and have driven credit unions to be much more aligned in terms of how they have to respond to member expectations.”
He says it is harder for credit unions to meet the cost of regulatory burdens and keep up with consumer expectations on tech. This has led to more co-operation among credit unions to share some costs, develop infrastructure, provide back office support, recruit and train personnel, and develop access to digital tech.
The regulatory burden on credit unions grew after the 2008 crash. Some changes introduced by national regulators follow the standards set by international organisations such as the Basel Committee or the Financial Action Task Force. To address this, Woccu has been engaging with international standard setters about the impact these standards have on credit unions. As a result, in 2019 the Basel Committee on Banking Supervision and the Basel Consultative Group (BCG) issued a joint statement supporting the use of proportionality when implementing Basel III — a set of guidelines to ensure internationally active banks meet minimum requirements on capital adequacy, stress testing and market-liquidity risk.
Credit unions and community-based depository institutions were also exempted from many aspects of Basel’s disclosure rules.
“We feel like we’ve made significant gains in terms of putting that attention to proportionality in the standards that come from the international bodies,” says Dr Branch. “Our work is also focused on supporting our member organisations around the world in a dialogue with their national regulators about what that proportionality language means when they apply it to their own national entities.”
Some of the fastest growth experienced by credit unions happens at times of crisis, he says. “What we heard from people was they felt that in a period of uncertainty, they wanted to go back to safety. Very often, they saw their community-based credit union institutions – that they felt were close to their community – as sacred places to put their savings.
“This is something that we’ve shared with the Basel Committee. We’ve shown them empirical data which showed that in periods of crisis when other institutions are running short of liquidity, when other institutions are dealing with small enterprises pulling money out of their accounts, credit union liquidity dramatically increases because people bring their savings to the credit unions, as a flight to safety.
“Where other financial institutions restrict borrowing and lending, credit unions actually respond to the needs of their members and maintain that lending. Word gets around that you can get a fairer deal, that credit unions treat their members more fairly. So we’ve seen tremendous purge of growth in response to those periods of stress.”
Woccu’s Vision 2020 goal to reach 260 million credit union members worldwide by 2020 was achieved three years ahead of its target. The apex found that credit unions experiencing the greatest growth were those that offering digital access. This prompted it to launch Challenge 2025, a campaign to advance the digitisation of the global credit union system.
Is there a danger that some people might get left behind by the digitisation of credit unions? Dr Branch thinks that on the contrary, digitisation can provide financial services to underserved rural areas.
“Technology reduces the costs of the credit unions that go out and provide services to remote communities,” he says. “Many people don’t have access to laptop technology but there’s a lot people can do with mobile phones.”
In Africa, credit unions – known as Savings And Credit Cooperative Organisations (SACCOs) – serve unbanked sections of the population via mobile transfer services, run in partnership with phone networks.
Another important project for Woccu has been working with credit unions around the world to expand financial services to women. The apex also tried to encourage more women to take up leadership roles within their credit unions. In 2009 Woccu set up the Global Women’s Leadership Network, which brings together women from credit unions to exchange experiences. GWLN also runs local chapters around the world. “The network is one of our proudest achievements,” said Dr Branch. Most meetings take place online, which meant that when Covid-19 struck the GWLN was quick to adapt to the remote working.
While at Woccu, Dr Branch travelled to 104 countries. “I have so many fond memories of being received as part of the family,” he says. He recalls working with credit unions in Poland in the early 1990s to help the credit union movement “rise from its ashes”. Poland had one of the largest credit unions systems in the world in 1939 before the Nazis destroyed it – and those that survived the war were nationalised by the Soviets.
Other fond memories include revisiting Mexico, where Dr Branch spent some of his youth, to help set up credit unions and update credit union law, and introducing credit union small-business lending for youth and refugee communities in Guatemala.
He thinks the sector will continue to grow in spite of the impact of the pandemic.
“One of the lessons of Covid-19 was that people will prefer digital services to face-to-face transactions for health reasons. We will see the economic impact of the crisis on the most vulnerable … We’re going to see the tremendous impact of that economic crisis on people’s household income, their wealth, their ability to employ and operate their businesses, and
it’s going to be credit unions that have that mission and that mandate to help people through that crisis.”
He adds: “That will be an opportunity for credit unions to make their difference in local economies, compared to stockholder, for-profit institutions.
“We have to remember that credit unions are highly regulated institutions, so they will have a lot of work to do to help their members while protecting their own financial condition. It won’t be easy. It’s that co-operative-driven ethos of credit unions to help their members and the passion that drives their employees that people take note of. That will lead to more loyalty to credit unions and it will be part of what helps drive and create growth in the future.”
As to what comes next for him, Dr Branch says he will remain supportive of the movement and stay in touch with friends he has made over the years but will be taking time off to meet family commitments. “You get the credit unions in your blood,” he says.