UW Credit Union president drives growth beyond tough times

In the 20 years leading up to 2008, banking was unusually good and marked by comparatively little regulatory oversight, notes Paul Kundert, president and CEO of UW Credit Union. “A lot of people my age thought that was normal. That was our experience. Regulators eliminated regulations. They didn’t add new ones.”

That was then …

Since coming on board 10 years ago, Kundert, 50, has led the credit union through some tough recessionary years while meeting challenges to adhere to new federal regulatory directives. Still, under his watch, UW Credit Union’s assets have increased 154%, its loan portfolio has grown 112%, retained assets have risen 172%, and membership has surged by 90%. When he first arrived in Madison, the financial institution had 10 branches. Now, it has 22, and membership is quickly approaching the 200,000 mark (188,000 currently). 

“The recession was most transformative,” Kundert says, adding that it will lead to a more robust industry in the long term. “The process hasn’t been fun, but now our industry is returning to the competitiveness other industries have dealt with, and we’ll have a stronger financial services sector because of it.”

But economic uncertainty remains a challenge. “One of our main objectives is to make sure that we are successful if interest rates don’t change, or even if they do,” he notes. “That’s a significant challenge for anyone running a lending-based balance sheet like we are. If you can’t know, you have to be prepared for either.”

Another part of being competitive is feeding consumers’ insatiable hunger for technology, which Kundert says is changing the industry at an unprecedented pace. Case in point: Just six months after UW Credit Union first gave its members the option of depositing checks using their smartphones, 20% of its members were already doing so. 

Technology is also driving the industry to closely evaluate the future of brick-and-mortar branches. “When I started here, we were welcoming about 3,000 new members a year,” Kundert explains. “Now, that number is about 13,000, and it’s been consistent for the past three years. We see our branches as driving new account acquisition, but after they [become] customers, they may not use the branches as they once did.”

Kundert says it will take about 10,000 customers to support a new branch. “That’s what’s driving us.” The credit union will not be opening any other branches this year. “We don’t want to overbuild.”

From the rural Rochester, Minn., area, Kundert graduated from Winona State University with an accounting degree. He worked as a CPA for McGladrey in Minnesota before accepting a job with IBM Employees Credit Union, where he remained for 14 years.

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When he was 39, he married his wife, a nurse, and they agreed it would be nice to start their new life together in a new location. He interviewed for the UW Credit Union job while on their honeymoon in Maui. 

Now, in addition to his credit union duties, Kundert actively works to improve his industry. He chairs Filene Research Institute, a Madison-based American credit union and consumer-finance think tank, and he’s provided leadership to CUNA on emerging issues, such as those relating to Dodd-Frank and Fannie Mae. He also serves on a cabinet charged with raising $25 million in funding for the renovation of Memorial Union. 

But in the evenings, his favorite role is that of husband — and dad to two sons, ages 8 and 6. “I didn’t plan to be a father of young kids at age 50,” Kundert admits, “but I am so blessed.” He predicts one son might become a lawyer, the other, an entertainer. 

In fact, entertainers are not uncommon in the Kundert family and can be traced all the way back to Germany. In his pre-CPA days, Kundert played guitar and performed as a lead singer with The Barn Burners, a country band that made the community festival and wedding circuits in Minnesota. “I thought we were good, but I wouldn’t want to hear a tape of us now,” he laughs. 

And while he used to bike primarily for exercise, bike trips are slower but admittedly more enjoyable these days with the family in tow, and tent camping is also a favorite activity. But that’s where the practical CEO draws a line against “roughing it” too much. “I have to admit, I use an inflatable air mattress.”

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