There’s a difficult conversation that needs to happen more often in credit union boardrooms—and it starts with this simple question: What do you do when the group that helped form your credit union no longer wants to be associated with it?
The U.S. credit union system was built on sponsor groups—employers and associations that believed in the power of cooperative finance enough to fundraise, organize volunteers, and make personal investments to help launch a credit union. These sponsors saw credit unions as a vital benefit for their members or employees, providing access to affordable credit and personalized service when no one else would.
But over time, many of these foundational relationships have faded—or worse, turned cold. Some sponsors have downsized or moved operations. Others have been acquired or absorbed by new ownership, bringing different priorities and less interest in credit union partnerships. In some unfortunate cases, credit unions have been asked to cease using the sponsor’s name, denied access to employees for marketing purposes, or even evicted from long-standing, low-rent office space.
In my travels facilitating strategic planning sessions, I’ve worked with credit union leaders who continue to cling to sponsor relationships that—by all appearances—no longer exist in any meaningful way. These leaders are often loyal to the history and legacy. They may be former employees themselves. They remember when the relationship was strong, and they hope it will return. But at some point, hope becomes a costly business strategy.
Let’s call it what it is: when a sponsor demands you change your name, limits your ability to reach their workforce, and cuts off physical access, they’ve essentially kicked you to the curb.
The red flags are clear
These red flags are not subtle. They include:
- Being forced to drop the sponsor’s name from your own.
- Losing access to communicate or meet with sponsor employees.
- No longer being the exclusive financial provider for the sponsor group.
- Seeing stagnant or declining membership growth within the original sponsor base.
When you see these signs, it’s time for a serious strategic conversation. These are not small issues to work around—they are symptoms of a foundational relationship that no longer serves your credit union’s mission or future.
A painful—but necessary—divorce
I understand this is hard. Severing ties with a long-standing sponsor can feel like a betrayal. It’s emotional. It’s personal. For many board members, particularly those with long histories in the sponsor organization, it can feel like giving up a part of their identity.
But it’s also necessary. Credit unions—especially small and mid-sized ones—have limited resources. Every dollar, hour, and initiative must be directed toward serving a group of members that represents a viable path to future growth and relevance.
If the sponsor no longer offers access, interest, or engagement—and especially if they view you as a liability rather than an asset—it’s time to move on. Leaders must have the courage to face this reality and make strategic decisions based not on nostalgia, but on future opportunity.
From familiarity to future
Divesting from a non-committal sponsor often requires starting fresh. That might mean:
- Changing your name and brand identity.
- Recruiting new board members who better reflect your desired future membership.
- Revisiting your product mix to align with new member needs.
- Applying for a broader field of membership (FOM) that opens up new communities to serve. We have worked with many credit union leaders to expand to underserved and rural communities with a lot of success.
This isn’t easy. It takes work. It requires an honest assessment of your relevance and value proposition. It means setting aside the old narrative and writing a new one. But consider the alternative: sticking with a cold partner and hoping things will improve . . . while your growth stalls, your resources shrink, and your mission fades.
The truth is, many credit unions have gone through this transformation and come out stronger on the other side. Yes, there are cautionary tales of credit unions that lost their way after losing their sponsor. But there are far more examples of credit unions that took bold steps, redefined their purpose, and successfully rebuilt around a new and vibrant member base.
Growth requires focus
If your goal is long-term relevance, then your strategy must prioritize relationships that offer access, alignment, and opportunity. That means asking:
- Is this group growing?
- Can we reach and serve them effectively?
- Are we offering something they value and need?
If the answer is no, then that group can no longer be the foundation of your credit union’s future.
The best opportunities come from communities—whether defined by geography, employer, or identity—that want you there. Look for groups that are underserved, overlooked, and in need of fair, affordable financial services. Look for opportunities where your credit union can make a real difference. These are the partnerships worth investing in.
Making the strategic break
Here’s the hard truth: this is a “make or break” moment. When you see the signs that your sponsor relationship is no longer serving your mission, you must choose—stay tied to a fading past, or chart a course toward a more promising future.
The decision is not just about growth. It’s about survival. Credit unions that fail to evolve, to adapt, to align with changing realities—they disappear. We’ve seen it time and time again.
If your sponsor no longer supports your success, the worst thing you can do is nothing. The best thing you can do is get to work: engage your board, talk to your regulator, revisit your field of membership, and start imagining what’s next.
Your next partner, your next community, your next chapter—it’s out there. But you’ll never find it if you’re still waiting on a sponsor that left the relationship long ago.
What do you have to lose?
If your membership is stagnant, your relevance is fading, and your sponsor wants nothing to do with you—what exactly are you holding on to?
You have nothing to lose and everything to gain by moving forward. Seek out communities that will embrace your mission. Invest in the people and partners who see your value. Don’t settle for being tolerated when you could be celebrated.
Credit unions were created to serve people. The people you serve today—and the people you could serve tomorrow—are depending on your leadership.
Don’t let them down.
