California recalled its governor. They replaced him with a body builder turned
Is there a message here for credit unions? I think so.
People are at least tardily vigilant, and they are willing to change horses
in midstream if they think it will suit their long-term purposes. In California,
they voted by going into the voting booths. With credit unions, they can vote
by taking their money somewhere else.
Daylight on the Best Kept Secret
The last issue of this newsletter published a chart showing performance
statistics for credit unions by asset size. The smallest credit unions had the
worst performance data, and, in fact, were losing members. You might say these
credit unions are being “recalled.” Members are leaving, whether
for banks or other credit unions is unknown.
How can all credit unions avoid “being recalled?”
One way is to stop being “the nation’s best kept secret.”
For decades we have lived as a kind of shadow branch of the nation’s financial
services industry. We had the best rates, the best service and the best customer
satisfaction and yet we were not on the public’s radar screen. Look at
any of the major daily newspapers, or the smaller community newspapers as well.
They generally list – for free – the lending and savings rates of
the local banks. They do not list the same rates for local credit unions.
Say you lived in the Tampa Bay area of Florida. If all you did was look at
the St. Petersburg Times, you would see that the best auto rate from a bank
was 6.25, the best money market rate (for over $100,000) 1.00, and the best
passbook rate 0.25. GTE FCU’s rates for these are: auto loan, 3.9; money
market rate 1.82; and passbook rate, 1.35. The credit union beats the best bank
rates by a mile in every category. What consumer in the Tampa Bay area would
not want to rush over to GTE and get those rates?
But they don’t know about them. It’s time to change that, as well
as informing the public that just about anybody can join a credit union.
Breaking Mental Barriers
What’s holding us back? The leagues and the corporates could
do a lot more in getting the word out about our rates. Credit union leaders
should abandon their notion that it’s better to be “the nation’s
best kept secret,” that it’s better to be a kind of exclusive club
for “the favored few” and “those in the know.”
There’s also an “institutional myopia.” Most of us grew up
in a credit union world in which marketing meant marketing to members, or to
persons in a FOM who were eligible to become members. All this time we have
been “too close” to the movement. We lived in its universe and still
don’t see well past its borders. We still don’t readily think in
terms of going beyond FOM-eligible persons to the broader public. But the old
FOM world is gone, replaced by one with FOMs that have flexible walls.
Side by Side with Banks
And there is something else holding lots of credit union leaders back:
Fear, fear that if our outstanding rates are published alongside those of banks
for all to see then the banks will complain and that will lead to the imposition
of taxation by Congress.
Gray Davis was not recalled because he did something wrong after his re-election.
He was recalled because reports of the problems in his first term surfaced after
the re-election. When the facts were uncovered to the light of day, when Californians
read and understood them, then they wanted someone new at the controls.
If credit union advantages in rates and convenience are brought out of the
shadows and into the sunshine, if shown side-by-side with those of banks, then
the public will understand where the best deals are for them. Then they won’t
“recall” credit unions, they will “recall” banks.