Thursday, October 28, 2010

Suppose Credit Unions Had the First Say in Resolving Corporate Credit Union Failures

During a recent dinner conversation with a couple of fellow cooperators in Washington, D.C., the topic turned to corporate credit unions. There’s no denying it, corporate credit unions have to be one of the hottest topics within the credit union community.

Ever since March of 2009 when the National Credit Union Administration (NCUA) took U.S. Central and WesCorp into conservatorship, corporate credit unions have dominated the headlines like never before. NCUA’s actions prompted the entire credit union industry to take a much closer look at all the corporates, eventually leading to a deeper scrutiny of the management and composition of their investment portfolios. The exercise continued further to include review of their value in comparison to other providers, their structure, organization, and their role within the credit union system. Today, a number of leagues are hosting executive committees to evaluate the role of corporates and how they might be structured going forward, that is, if there can even be a future for them within the framework of the revised corporate rule.

However, in retrospect, suppose there was a different process in place for stepping in to rectify the failing organizations? Suppose the insurance fund resided in the hands of credit unions and credit unions themselves were authorized to remedy the situation before it was passed over to the regulator as a final backstop?

OK, I realize that to operate as a legitimate financial organization in the United States, there are federal and state rules governing how the organization is structured and allowed to operate. But just suppose with me that the equation was different.

Suppose NCUA only existed as the last resort and it was left to the credit union system to have the first crack at resolving the crisis. How would a course of action by the credit union community differ from that exercised by the NCUA? Would it differ or would we all be out of jobs at this point in history?

When one considers the cooperative business model and what it requires of those who are engaged in it as owners, one has to wonder how credit unions might handle such failures if the responsibility resided first in their hands.Is such a reality even possible?

Saturday, October 2, 2010

12 Ways to Observe National Co-op Month

October is National Cooperative Month. Since 1930, Cooperative Month has celebrated the fact that cooperatives are different and make a difference in the community because of their businesses model defined by seven cooperative principles:

Voluntary and Open Membership
Democratic Member Control
Member’s Economic Participation
Autonomy and Independence
Education, Training, and Information
Cooperation among Cooperatives
Commitment to Community

This year’s theme highlights trust and member service and characterizes the cooperative difference. 

As you look for ways to make your observance of Cooperative Month and International Credit Union Day (Oct. 21) a memorable success, here are 12 ideas that can help.

  1. Make your members feel like owners. Host an Owners’ Day Party.

  1. Review and closely examine the definition of a cooperative. Understand the meaning of the business model it describes. Ask yourself what makes your organization a co-op?

  1. Have a meeting with staff to identify the Seven Cooperative Principles and evaluate how your organization embraces each one. Are they posted publicly for all to see?

  1. Invite the local business reporter to the credit union to meet and greet the staff and your members. This is a great way to help the reporter develop a deeper understanding and appreciation for credit unions and the cooperative difference.

  1. Participate in the International Credit Union Day webcast, Celebrating Our Cooperative Heritage. It is scheduled for October 21 at 3 p.m. EDT. Encourage your board and executive staff to view the interactive discussion. Registration to participate opens soon at

  1. Develop special messaging to your members talking about co-ops, the cooperative difference, and what co-ops stand for in the community. Display the messages in your lobby, in electronic statements, in your mobile banking application, on your credit union’s website, and on your social media channels like Facebook and Twitter.

  1. Sponsor an art competition for youngsters of the credit union asking them to draw a picture of a cooperative. Publicly post the images in your lobby and your website. Offer awards to the best drawings.

  1. Leverage your relationships at the local chamber of commerce or rotary club to serve as a presenter during the month of October to talk about the cooperative business model and the values and principles on which it is built. As part of this community education effort, talk about your credit union as one of the many organizations built on that model.

  1. Sponsor an essay contest in collaboration with the local high school. Offer a grand prize of $1,000. Make the essay topic: How cooperatives and their distinct business model deliver better value to the American consumer.

  1. Host an open house of your credit union. Roll out the red carpet and invite folks from the community to stop in and have a coffee, have a donut and find out what a credit union is all about. Include a local radio station to broadcast LIVE from the credit union branch to further attract public participation in the open house. And don’t forget to invite the public to bring along cans of food for donation to the local food bank!

  1. Cooperate with other co-ops in your community to create an organized referral effort where each cooperative helps to promote awareness of one another.

  1. Organize a community day where the staff of your credit union goes into the community to help low-income and underserved families do repair work, painting and cleaning on their homes. Invite your members to join with staff, shoulder-to-shoulder in providing these services on Community Day as a way to mark National Cooperative Month—People Helping People.

Also be sure to plan your Co-op Month activities during the week of October 17 - 23 to help create a nationwide cooperative awareness week. And, don’t forget to make use of informational resources and prepared materials available from:

Credit Union National Association—CUNA

The National Cooperative Grocers Association—NCGA

The National Cooperative Business Association—NCBA

The International Cooperative AllianceICA