A Game Changing Year

Credit union leaders must be involved and engaged for the credit union industry to seize new opportunities in 2010.

 
 

The general narrative of credit unions, particularly during this recession, is complex and profound, which is why it takes many individuals to craft and tell the credit union story. At times, the disconnection of these leaders hampers collaboration and collective action; however, this year provides the opportunity for a confluence of disparate elements to drive real and tangible change in the credit union industry.

First, there is a renewed government commitment to move the financial sector toward the practices and traditions that have guided credit unions through this recession. Directly addressing the arguments put forward by government leaders is crucial for progress.

President Obama, The State of the Union Address
It's time to get serious about fixing the problems that are hampering our growth. One place to start is serious financial reform. Look, I am not interested in punishing banks, I'm interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes. But that can only happen if we guard against the same recklessness that nearly brought down our entire economy.

Barney Frank, Chairman of the House Financial Services Committee
I wish banks had fewer ways to make money than lending. One of our problems today is that lending does not appear to be a high priority for money-making activities for a lot of banks. There's trading, overdraft fees, et cetera. To the extent that those are curtailed and people can be driven to lending, that's a healthy thing.

Jim Blaine, State Employees Credit Unions of North Carolina
Banks can do what we do, they just have to relearn the lending business.

The expectation for America's banking system, at least from those pushing regulatory change, is that depository banks' return their primary focus to the tradition of providing credit. In the meantime, the public policy need for credit unions is clearer today than ever before. State and federal governments are increasingly relying on credit unions' proven history as reliable lenders to fill niches, such as payday lending and small business loans. These are opportunities for credit unions to expand member services.

Tim Kaine, Former Governor of Virginia
While we should regulate payday lending and other forms of predatory lending, there is a strong need for people to have small-dollar loans in the marketplace. That's why Virginia pioneered a new strategy to offer more than 100,000 state employees a viable and cost-effective alternative to payday lending. In July, we established the Virginia State Employee Loan Program, a unique partnership between the Virginia State Employee Assistance Fund and the Virginia Credit Union.

Joe Lieberman, Senator (ID-CT)
The financing provided by America's credit unions can help boost job creation at no cost to the taxpayer. To promote a robust economic recovery, we need to think creatively about how to get credit flowing through our economy. By freeing credit unions to lend more to small businesses, we will provide an additional source of capital to help those businesses grow and thrive.

Ken Gardner, Capitol Credit Union
We are undoubtedly in an unprecedented time in our industry where government leaders, personal finance gurus, TV talking heads, and the general public are supportive of what makes credit unions different from banks. It's time we looked at this current crisis and its' inherent challenges not as a negative and overwhelming obstacle, but an opportunity to revitalize the credit union industry as we know it.

Callahan & Associates catalogues video content of these instances on Credit Unions Rising. Increased visibility in the media certainly has its benefits, but credit unions cannot rely on members and potential members to stumble upon these stories. As Ron Daly of DigitalMailer recommends, credit unions can put this image on their website and link the image to the appropriate credit union story, such as the popular CBS story "Banks vs. Credit Unions."

Ron Daly, DigitalMailer
Tell potential members what you have to offer over the banks today! I'm certain someone will say that's not a good idea, but why? Just do it. Don't waste this opportunity to get people interested in joining YOUR credit union… Put this on your website, and challenge five others to do the same. Maybe we can get some people to pay attention.

As Chip echoes below, the effects of this media attention are cumulative.

Chip Filson, Callahan & Associates
For decades credit unions lamented that the public didn't seem to know who they are. Now the news is out. The notion that there are financial services organizations whose Number One goal is serving the interests of regular people is going to flourish, possibly hitting its tipping point.

Paul Stull, Arizona State Credit Union
I agree this crisis will end, but finding a new business model is the solution, not empowering people to go out and try harder. It is very clear that the same old methods will not work going forward. The challenge is to find new ways to make the credit union value proposition relevant in this brave new post collapse world.

The challenge to convert the passive benefits of greater public and media attention into active results demands targeted change. This will make the tipping point for credit unions a tangible event. For example, driving awareness of credit unions as mortgage lenders is a critical step to generating new mortgage business.

Colleen Daly, Northwest Federal Credit Union
Nationally, much of the public is not aware that credit unions offer mortgages. To correct this shortcoming we need a national campaign—not fragmented local initiatives—stressing our real estate lending programs. We've gotten good press and some good coverage in consumer media, but we as an industry have a long way to go and only a large national campaign is going to get the job done.

Where is all of this going? What will make 2010 a "game-changing year" for credit unions is the potential victories for the industry. Your credit union must be the agent of change, and your ideas will be the impetus for that change.

Ultimately, the member is the reason why credit unions exist, why regulators regulate, why trades facilitate, and why vendors supply. The needs of American consumers are evolving, and credit unions must actively push for change that allows them to continue to meet these needs.

Vincent Rose, Credit Union Member
I belong to a credit union; I get better rates, no fees and my money is insured… My credit union has always been there for me.

 

 

 

Feb. 1, 2010


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