The Business Breakdown

Rewards, home prices and NFC? They all mean something for credit unions during the week of March 28.


The news this week was full of hidden opportunity for cooperatives. As the economy wobbles along, consumers are looking for a combination of stability and innovation; each of the stories included here highlights a chance to yield both.

  • No More Rewards: Major banks are discontinuing debit card rewards for new customers. They’re a casualty of the interchange debate that will come to the fore next month. The Breakdown: Credit unions can offer distinct value-adds for members. One way? Free checking. I wrote about the benefits of it here. In light of the moves of other FIs, keeping free checking might actually be seen as innovative too. One day, it could be a commodity.
  • Down They Go: Home prices are falling in big markets. The S&P/Case-Shiller home price index is leading experts to predict a double-dip housing recession. The Breakdown: Getting people into homes they can afford and enjoy should be the objective for any credit union’s mortgage department. Credit unions have been lending throughout the downturn ($69B in loans originated during 4Q10), and the commitment to doing so exhibits both a dependability and a willingness to help when others see things as too risky. Keep up the good work.
  • My Phone Is a Wallet: Near-field communication (NFC) technology will soon let you pay with your cellphone. Guess which debaters are weighing in on the new tech? Interchange folks. Why? Because every swipe equals money. The Breakdown: Credit unions must get on the forefront of this technology if possible. The smartphone is only gaining popularity; eventually, the market will calibrate, and smartphones will become the norm. If every member has one, wouldn’t you want them to be able to access this technology? Use a discussion of NFC to examine your credit union’s mobile footprint. You can be the voice of financial reason and also maximize member convenience.

March 29, 2011



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