Laskos on Credit Unions

MAKING THE REGULATOR THE SCALPEL OF LAST RESORT

2012-02-14T14:42:00.000-08:00

I often wonder how the role of independence and autonomy, one of the seven principles of cooperation, applies to the credit union business model. I’m of the belief that any sacrificing of autonomy and independence would mean that credit unions cannot truly be “cooperatives” in the strictest sense of the definition, well, at least perhaps in the way the Rochdale cooperators envisioned. Maybe that explains the continuous struggle between credit unions and any outside agency vying to regulate its “cooperative” model.

Now, don’t get me wrong, if credit unions are to participate fully and legally in the U.S. financial services system and offer their members the protection of the federal government, then, of course, I see no other way than to expect that credit unions play by the rules of the game.

But, here’s the challenging observation I have. Should credit unions be doing more for one another—cooperatively—to protect the independent and autonomous nature of all credit unions?

Here’s what I mean.

Given our cooperative nature, does the credit union system have to rely solely on NCUA to take prompt corrective action or conserve a failing credit union? Why should a credit union be forced to stand face-to-face with a government entity responsible for overseeing and rating its performance without first having the benefit of review by a resource that let’s just say, is less threatening; a resource that could point out compliance deficiencies and help set a corrective course of action? Is it really possible for credit unions to exercise a greater role in overseeing the performance of one another, stepping in to offer guidance, resolve problems or shore up inadequacies before it becomes necessary to have the regulator step in and place a shop into conservatorship?

I say make the regulator’s scalpel the last resort by designing innovative ways to first rely on one another for guidance in staying compliant with all those endless regulations.

Well, there may be such programs already in place. If so, are they affordable to all? Let’s hear about them. Or, can it be that working with one another to resolve performance shortcomings on a balance sheet is more dreadful and painful than having the regulator come walking through the door and us facing the consequences of their judgments and decisions? There has to be a better way.

What do you think? Share your thoughts and hopefully we’ll hear from leagues and associations as well; including some CEOs whose shops are about to go under the regulator’s magnifying glass.

The strength of credit unions is in their collective numbers. I say apply that strength to find ways to preserve any degree of independence and autonomy credit unions can muster.

UNUS PRO OMNIBUS, OMNES PRO UNO

2012-01-24T11:20:00.000-08:00

Once again, credit unions, through no effort of their own, are finding themselves in a position of strength. We’ve seen it happen recently with the Move Your Money campaign, which as I just saw in the trades, continues to make a dramatic contribution to credit union membership levels, particularly at BECU.

This time around, credit unions are being given another great opportunity to steal the show. The United Nation’s observance of the International Year of Cooperatives is providing credit unions with an ideal opportunity to educate the masses on the fundamental difference between their cooperative business model and that of their banking counterparts who observe a shareholder-based, for-profit model.

Even more important with this observance comes the opportunity for credit unions to dramatically influence the public’s perception of who they are as financial cooperatives. I see it as an opportunity to grow and nurture the credit union brand to a level never experienced before.

But, are credit unions willing and ready to support an effort that promotes a collective identity rather than one that focuses exclusively on their own image and business? Putting all politics and egos aside, such an effort will require all credit unions to speak with a unified voice in a common language the masses can easily understand.

Yes, you’re correct! We’re back to the topic of a national branding campaign. Well, this time around, let’s not kid ourselves.

We all know it’s more important to gaze at one’s own navel and focus on the distinctions of one’s own individual credit union rather than on the values and principles all credit unions collectively share. Since members always come first, it’s obvious that we shouldn’t expect a sudden move away from local campaigns to support a national agenda. Or, can we?

Guess we’ll have to turn to CUNA, NAFCU or the Association of Credit Union Leagues to develop some common message points that can be consistently used by all credit unions in the way they present themselves in the marketplace during 2012, no matter what words precede “Credit Union” in their name.

On second thought, I’m not sure we all may even agree on message points. Perhaps we can limit it further.

Maybe we can collectively come up with a simple list of credit union-friendly words and phrases that can be used to build a more common and consistent public perception and understanding of coops. That’s it! And if we’re lucky, maybe we’ll hit a 45 percent participation rate.

To get us started, here are a few thoughts that readily come to my mind.

Since credit unions are cooperatives owned by their members, doesn’t that make a credit union a People's Bank? The concept certainly distinguishes the credit union image from banks that are more aligned with big business, profits and shareholders. I don’t think anyone in this day and age would consider them to be a “people’s” bank.

Of course, I’m of the opinion we keep “bank” and “banking” in the credit union lexicon. Why waste energy trying to get the public to use a different word that encompasses writing checks, depositing money into a savings account, or securing an auto loan? I say use language everyone understands and put the energy where it’s better spent, associating the concepts of bank and banking with adjectives and phrases like Banking You Can Trust from the New Jersey League, ownership, understanding, the Little Guy, and the People’s Bank.

We ought to be finding ways right now to use these words and phrases in member newsletters, presentations, news interviews, and yes, even ad campaigns. By using them consistently and at all credit unions, we influence perceptions and build common brand recognition.

And let’s not forget, "financial cooperative." Now, some may say that there is a lack of understanding among the public of what a cooperative is. Well, isn't that also true of "credit union" in many ways? While I’ve seen reports that suggest the public’s understanding of a cooperative is not as far off track as you may think (and even more accurate than their understanding of a credit union), the observance of the International Year of Cooperatives is the perfect opportunity for all credit unions and coops alike to ensure the accuracy of such an understanding and perception.

It is expected that the International Year of Cooperatives will generate tons of exposure opportunities, from news interviews to public discussions, focusing attention on the credit union/cooperative brand and the distinct way credit unions conduct business. With that opportunity before us, will the thousands of credit unions throughout America, both small and large alike, finally work together cooperatively to discover their common voice and speak a language that builds brand recognition?

Our time has come! The train is at the station and the silver platter is being offered. If credit unions get onboard now and take advantage of the opportunity, I believe they can build a common perception, a national brand experience that will foster growth and success not only for the industry at large but for the individual credit union cooperative as well, and for many years to come.

So what do you say, Unus Pro Omnibus, Omnes Pro Uno—One For All, All For One?

(Originally published on CUinsight.com)

THE PROPHETIC MESSAGE OF 2012

2011-12-26T12:05:00.000-08:00

Alas, we are standing at the front door of the New Year, 2012. Ready to cross over the threshold to greet all that will come our way this year?

Considering everything we’ve been through these last several years, what more can come as a surprise? My hope is that 2012—The International Year of Cooperatives—will turn the tide and see credit unions once again take charge of their own destiny in ways that offer more aggregation, more safety, more cooperation, and more prosperity.

Having seen the news last week about U.S. Central Bridge and NCUA’s plan to shutter its operation, I can’t help but think back a decade to a time when all the talk about the corporate network consisted of who would replace Gigi Hyland upon her departure as CEO of the Association of Corporate Credit Unions; which corporate is in merger talks and who will offer me the most yield today on my investments.

Of course, all eyes were on the big guys like WesCorp, the largest of the retail corporates. Remember Empire and Southwest? They, too, were among the movers and shakers, as well as U.S. Central.

News about the corporates, their services and activities seemed to be unending, warranting a fulltime effort by journalists like Paul Gentile, who covered the beat for Mike Welch and the Credit Union Times. Over at the Credit Union Journal, Frank Diekmann held the post, keeping an ever-vigilant eye.

And certainly, when we think back to the corporates of a decade ago, we can’t forget the exceptional conferences and workshops that each sponsored for its membership. The speakers and educational value provided at these gatherings was by far, top tier, rivaling CUNA and NAFCU in scope and quality. And, remember the shrimp? I had a hard time distinguishing them from lobster tail!

There’s no question, corporates were at the top of their game at the turn of the millennium and everyone profited. Not only were investors earning an average of 12 basis points above LIBOR but corporates were also pouring tens of thousands into the National Credit Union Foundation and other credit union charities. The bounty and generosity of the corporates was simply overwhelming.

As organizations espousing the cooperative business model and its principles and values, one could say that the corporates may have been bending the rule about profitability and its place in a cooperative business, but with everyone reaping the benefits from the way in which corporates were investing, no one dared to rock the boat.

Then suddenly, after 40 years of corporate credit union history, it all got ugly—and fast. Could anyone ever have thought it would all end up like this: NCUA walking into two corporates on a typical Friday afternoon in March of ’09 and placing them into conservatorship, the creation of bridge corporates, the formation of Catalyst and Alloya, the burial of WesCorp, the closure of U.S. Central, hundreds of pink slips, and the loss of billions. We were all shaken to the very core of our being.

Yes, there are those who say we paid heavily for the 12 basis points, the shrimp, the first class speakers, and all the other services that corporates provided. They simply point to the loss of capital and the NCUSIF assessments. But back in the day, without a crystal ball and before OTTI and The Great Recession, our coffers were healthy, our bellies were full and the only complaint seemed to hinge on yield and the need for more.

God willing I should live another score or two of years so that I might not only read how this whole era in America’s credit union history has been recorded but to see how the next generation of corporates will have evolved, how many will exist, how they will be living the cooperative principles, if at all, and how far the pendulum had swung back toward the glory days of old.

With a New Year comes a new beginning and a future that is now ours to reshape—and it is happening as the United Nations turns the world’s eyes towards the principles and values that define cooperatives. A coincidence in timing, I might ask, or a prophetic message to guide us toward our true destiny?

Some Things Are Better Left Unsaid

2011-11-29T23:51:00.000-08:00

I am puzzled. What would prompt The Credit Union Times to publish an article spotlighting one person's political views on the “Occupy” movement, as well as their judgmental way of generalizing a certain group as being “spoiled, selfish, dopey, left-wing idiots?” Outside of an opinion column, how does such unsavory characterizations warrant news coverage? Come on, was it really that slow of a news day?

The truth is I am appalled to hear a credit union CEO speak so negatively and carelessly in the public forum. Yes, I'm speaking about a November 28th Credit Union Times article about Tina Mooney, CEO/manager at RAH Federal Credit Union.

If I lived in the community and heard Mooney, the CEO of my credit union, denigrate the neighborhoods in which I live, saying Randolph and Brockton are becoming less than desirable parts of Boston, I’d have to wonder what gives. Is this an appropriate statement for a credit union CEO to make in a public forum or is she planning to run for office? After hearing how readily she spoke of the neighborhoods and those participating in the Occupy movement, I prefer to think she may have become so negative about everything around her that it’s beginning to cloud her better judgment.

Yes, I am appalled because after all, what is a credit union and what is its role in the community? Is it not a financial cooperative organized around a set of operational principles and values? And, who owns that cooperative? And, what should one expect from a credit union CEO, one who is the public face, the public brand of those cooperative principles and values?

Let’s also not forget what should be expected from a trade news publication that’s governed as well by journalistic principles.

Still, I find it difficult to understand why Mooney would go on record about the Occupy movement about which she readily confesses little knowledge, and say, “If they want to protest the state of the country right now, why don’t they protest the White House or [Mass. Rep.] Barney Frank’s house, as his housing crisis was brought on [by] Democratic policies run amuck.” OK, let me guess which side of the aisle Mooney sits.

Has the CU Times now become the new tabloid for such partisan diatribes? While Mooney is certainly free to express her opinion, she, as CEO, is also a public person, a public representative of the credit union system. Expressing her partisan opinions and characterizations of those engaged in the Occupy movement (whether we agree with Occupy or not) so pointedly in a public forum (CU Times articles are available to all throughout the world by search engines) can mislead anyone into thinking that Mooney’s mindset is representative of the movement.

In today's world, when such uninformed opinions are coupled with partisan extremism and bickering, we will only see a further alienation of one group of Americans from another. Is this what credit unions really represent?

In the Year of Cooperatives, we should tolerate nothing less than a commanding spirit of integrity and inspiration from those holding the sacred reigns of America’s credit unions, and let’s not forget, the wisdom to know when some things are better left unsaid.

The Legacy—The Age of Cooperatives

2011-10-31T17:52:00.000-07:00

The International Year of Cooperatives is finally underway, fueling a myriad of global opportunities served up on a silver platter for all cooperatives in all sectors; opportunities that can be creatively harnessed to educate all peoples on the inherent value of the cooperative business model.

If there ever was a time when the world needed a business model rooted in values and principles, now is the perfect time for us to step forward. Now is the time for all cooperative leaders to take to the airwaves. Now is the time for member/owners to tell their neighbors why they belong to a food co-op, a housing co-op or a credit union. And, now is especially the time for cooperative evangelists to herald the tidings of hope, equity and dignity that come with membership in a co-op.

In early October while attending the National Cooperative Business Association’s annual conference in Minneapolis, Minnesota, I decided to grab my flip cam and document what cooperators hope will be the legacy of the International Year of Cooperatives. The video that follows documents their responses. My thanks and appreciation to those who contributed to this effort:

Martin Lowery

Executive Vice President

National Rural Electric Cooperative Association

Arlington, VA

Sue Douglas

Senior Vice President/COO

North Carolina State Employees Credit Union

Raleigh, NC

Paul Hazen

President/CEO

National Cooperative Business Association

Washington, DC

Sarah Pike

Executive Administrator

Association of Cooperative Educators

Hanover, MN

Michael Spink

Innovation Strategist

Local Government Federal Credit Union

Raleigh, NC

Tom Webb

Adjunct Professor

Sobey School of Business

St. Mary’s University

Halifax, Nova Scotia

Jim Jones

Senior Director of Development & Asset Management

North American Students of Cooperation

Chicago, IL

Charles Gould

Director General

International Cooperative Alliance

Geneva, Switzerland

No doubt, we all have our own hopes and dreams for the International Year of Cooperatives, but there will be no hope and no dreams to come true unless we all unite as one movement in a spirit of cooperation. If all sectors join together on this occasion, we can light a fire that will truly transform our world, and through the United Nations that opportunity is being offered to all of us on a silver platter. The legacy begins today.

What are your hopes and dreams for the International Year of Cooperatives and what will you do to make those hopes and dreams come true?

Opportunities On A Silver Platter

2011-10-19T00:21:00.000-07:00

First there was TARP in 2008 and the bailout of the banks using taxpayer money. Then came the return of hugeprofits and executive bonuses. Now, we're seeing the addition of new fees, such as those announced by B of A for users of its ATM card.

Needless to say, such events have fueled an ever increasing frustration among American consumers, elevating their mistrust of bankers and Wall Street investors like never before. It's most apparent in the recent "Occupy Wall Street" demonstrations that are now spreading throughout the world.

If there was ever a time for someone with an alternative to the for-profit shareholder business model, now would be the time to step forward.

But wait! Don't financial cooperatives already have the market cornered as a viable alternative? Don't we offer the most reasonable alternative to using a bank? Are we not engaged in a service industry that is contingent on having trusting relationships?

This week the world observes International Credit Union Day. Less than two weeks later, on Oct 31, the United Nations launches the International Year of Cooperatives.

Yes, I hear and read stories of credit unions and coops planning ways to mark these wonderful observances. The Disclosures will be setting the rhythm as the National Cooperative Business Association eyes a series of events throughout 2012. CUNA and many of our leagues will be doing the same. The National Federation of Community Development Credit Unions hopes to be first out of the box by hosting an event, Building a Cooperative City in New York City on Nov 1^st that promises to result in greater collaboration between credit unions and coops.

What do you think; will these all be one-time events or a prelude to a much larger and ongoing series of enrichments that will shape our movement for years to come?

After it's all said and done, after 2012 has come and gone, will cooperatives and credit unions be better known than they currently are? Will we be any larger, more successful and more influential in making a difference for millions than we are now?

All these golden opportunities are being served up to us on one big silver platter, one after another. Wouldn’t you agree? And, they are ours for the taking.

For me, however, a larger question looms. Are all these things happening just by coincidence or are we being presented with the big silver platter because the world needs us now more than ever before?

Are Credit Unions Missing the Boat?

2011-09-06T16:01:00.000-07:00

Recently, I took a tour of the San Diego Maritime Museum and while I walked the decks of a frigate and schooner and crawled through the belly of a Soviet era Foxtrot-class attack submarine, I found myself imagining what it must have been like to those who actually sailed the high seas in these astonishing vessels.

First of all, there’s not a lot of room for comfort. Unless you were the captain or high ranking officer, you practically lived the entire day rubbing elbows with all those around you. Second, when you put out to sea, you were confined to that vessel for months. And third, I could only imagine how these conditions bonded everyone on board, giving them plenty of reasons to get to know one another, to communicate with each other (remember, there was no TV or Internet connectivity) and most especially, to depend on one another to safely and successfully reach the port of their destination. I took some photos aboard the Star of India, the HMS Surprise and the Foxtrot B-39, and you can see them all at Shutterfly.

Today, however, such voyages have taken to the open sky and the comfort of airships flying at 550 mph and offering frills like reclining seats, XM Satellite Radio and Direct TV. Albeit, passengers are still crammed into a very confining space, but the tendency to bond with others making the journey has given way for the most part to where we now exchange only a brief glance and possibly only a few words, like, “Excuse me, but that’s my seat.”

It’s no wonder then, that when we hear someone say, “We’re all in the same boat,” we have difficulty truly appreciating all that it might imply.

Yet, wouldn’t you agree that all of us associated with credit unions are in fact, all in the same boat, together?

At this precise moment in time and history, you and I and thousands of others find ourselves bound together by a set of cooperative principles and values, whether we are cognizant of it or not. We celebrate our triumphs each year in the ritualistic ways we do, dinners and conferences, and we acclaim those whose inspiration and contributions have guided us so well. We face the same challenges and obstacles; attacks from the banking lobby, regulatory requirements and a stubbornly sluggish economy. And, in times of adversity, we turn to one another to tap our own wellspring of generosity, talents and skills. When we bond with one another and work together cooperatively in these many ways, isn’t it true that we gain an inner strength, just like those aboard the sailing vessels of old? And, in doing so, isn't it true that somehow we find ourselves having the profound ability to navigate our way to success?

As a movement, it’s clear that we depend on each other in so many ways for survival. Yet, there are many times where we continue to find reason to erect walls that separate and divide; to point fingers in frustration; to compete with the wrong competitors—each other; and, to fuel egos that in many cases masquerade a humble and gentle spirit that is in most need of expression today.

As I walked those decks, I wondered if credit unions are missing the boat.

What If . . . You Banked at a Co-op?

2011-07-14T20:14:00.000-07:00

In the May/June issue of The Cooperative Business Journal, Seattle Metropolitan Credit Union finds itself in the spotlight once again for another trendsetting approach it has embraced in an effort to further cultivate its sterling image in the community. The full-page article, Banking on the Co-op Brand: How Seattle Metropolitan Credit Union Boosted Membership by Celebrating its Co-op Roots, is also laid-out around a print advertisement the credit union is currently running to make its point. The ad asks, “What if . . . you banked at a co-op?”

Seattle Metropolitan’s campaign also includes a specially designed website, www.7principles.coop, which further engages the consumer to consider the value that a cooperative banking model offers.

While such an effort by a credit union to tout its cooperative heritage should no doubt be lauded and emulated by all of us throughout the movement, I think it’s important that we also be particularly attentive to the factual data that Seattle Metropolitan is acquiring as a result of this branding venture. It is generating a rise in new membership!

Surprised? I’m not.

The seven cooperative principles are the unique value proposition of a credit union. They imbue the credit union brand with a life that is absolutely unique. No other banking or financial institution outside of a credit union can claim that distinction.

A little more than a year ago in my blog, I discussed a national branding campaign and what is needed to provide a consistent credit union brand experience from Maine to Alaska and Hawaii (The Key to Consistency in the Brand Experience of Credit Unions, June 2, 2010).

If you recall, I pointed to the brand as being the total comprehensive experience one has of an organization. This is an experience that’s influenced by the organization’s history, reputation and the caliber of its staff; its products and services, how they are packaged, priced and named; its style of communication and advertising.

A national branding campaign would, of course, need to encompass all those attributes, everything contributing to the way a person would experience a credit union. However, for a national brand to be successful, I believe it needs to be consistent from one end of the country to the other. And, the key to maintaining that consistency across a national landscape, one exhibiting all sorts of credit union names, logos, appearances, and membership segs, is the seven cooperative principles. They represent a common brand we can all put our arms around!

The seven principles are a common story we all should be proudly telling our communities. It’s a story that certainly captures our unique value proposition, will attract media attention and can engage consumers like never before. It’s a story perfectly fitting to tell the world during the United Nation’s upcoming celebration of the International Year of Cooperatives. And, most important, it’s a story that delivers value to the balance sheet; proven by Seattle Metropolitan Credit Union.

Suppose your credit union asked the community, “What if . . . you banked at a co-op?”

(Special thanks to Andrew McLeod at the National Cooperative Business Association for providing me with a PDF copy of the article as it appears in the May/June issue of Cooperative Business Journal. Access the full article at Banking on the Co-op Brand)

Improve Ways to Tell Your Story to Offset Shrinking CDRLF and CDFI Allocations

2011-06-29T09:56:00.000-07:00

If you are an executive at a Community Development Credit Union or at a designated Community Development Financial Institution and dependent on grants to sustain your programs, you already know that how you complete the grant application process determines your chances for securing the funds on which your program relies. Well, stand by because the application process is about to get even more challenging!

Last week, the House Appropriations Committee approved a spending bill that includes cuts in funding for NCUA’s Community Development Revolving Loan Fund as well as the Treasury Department’s Community Development Financial Institutions Fund. The measure allocates $500,000 for the CDRLF (this year, the fund received $1.25 million) and $183 million for the CDFI, a reduction from the requested amount of $227.2 million.

With all the attention being given these days to reduce the national deficit, we should not be surprised by these cutbacks in funding, which unfortunately may be on the horizon for some time to come! However, for those prepared to tackle this new wave of austerity, the impact can be managed quite successfully. Here’s one way to make it happen.

As a public relations professional and from my work in institutional development and capital campaigns, I’ve learned the importance of brand perception and the role it plays in building success, whether it be for a funding campaign, a program or an organization. While it’s easy to get caught up in the details of the application process, many times we tend to forget how branding and the communications we share about our programs over the course of time can influence our chances of attracting the funding we seek.

Success breeds success. If you already are engaged in community development and have the stories to tell that demonstrate your abilities to truly make a difference among the underserved, then you have half the battle won. A list of success stories not only proves your skills in good stewardship, it also points to your abilities to develop and manage projects and programs that are truly making a difference in the community. Remember, potential donors and foundations want to associate themselves with success. They want to back a winner.

Now, if a track record of success is half the battle and one that makes for quite a persuasive appeal when you go to solicit funds, you must be wondering what the other half of the battle can be. Well hold on, I see it as a “must do” to securing a donor’s commitment.

You have to tell your story—but in ways that garner more attention than others vying for the same funding. Yes, I caution here against following your innate credit union instincts that tell you you’re boasting if you promote the good work you are doing. When it comes to soliciting funds there’s no alternative if you want your program to survive. I see it as a “must do” to influence perceptions and nourish your brand. Simply relying on the written word to describe your activities in the grant proposal form just won’t cut it in today’s highly-competitive race for dollars. You have to stand out and one way to do that is to improve and increase the ways you tell your story.

How? Document the successes of your involvement in community development using a variety of media, and constantly and consistently push the images and stories out into the limelight. This might involve creating a series of video testimonies from those who benefited most from your program or perhaps launching a Facebook page where folks can follow the work you’re doing and become more engaged in supporting your good cause. Reserve a small portion of the funds you receive for communication purposes, specifically to document the results achieved by the funding. Consider it an investment for securing future funding.

Pursuing an organized communications strategy like this not only influences how others perceive and experience what you and your program are all about—your brand—it also helps to further establish your credibility as a respectable community development organization. It contributes to your position as a winner!

Today, we may be seeing allocations to the CDRLF and CDFI funds shrinking and intensifying applicant competition, but community development organizers that implement strategies to document and share their compelling stories of success using electronic and social media will find themselves ahead of the competition. While doing so may not ease all the requirements associated with the grant application process, it will contribute significantly. It’s an investment in your community development program that I believe, you cannot afford to overlook.

ROADMAP TO PROSPERITY

2011-05-23T12:08:00.000-07:00

Do you believe that in a cooperative society, the needs of the many outweigh the needs of the few?

I couldn’t help but consider the concept after reading an article last week in the Credit Union Times. Submitted by Natasha Chilingerian, it was titled, Credit Unions Lag for First Time in Annual Online Banking Survey

The survey found that consumers are less satisfied with the online banking services of credit unions than they are with those of banks. The author of the report, Larry Freed, explained the rationale in an interview with Credit Union Times, where he emphasized the growing pressure credit unions face in competing with large banks in the area of online banking.

“Overall when you look at the score, it’s still a strong score,” Freed told Credit Union Times. “But at the end of the day, credit unions are facing some challenges. Because of the consolidations that have taken place, large banks have become more focused on the customer than they were before. And as they deploy new channels, such as mobile channels, the bar is being raised for credit unions to keep up.”

(Access the full report at ForeSee Results)

Sporting a sudden interest in customer service, big banks are now forcing credit unions to work even harder to compete in the financial services marketplace. At first glance, one might evaluate this new challenge as insurmountable considering all the other challenges credit unions face today, from stagnant lending portfolios to an ever-expanding list of regulatory requirements. Yet, when faced with such challenges, credit unions should not despair. Unlike banks, credit unions have an inherent ability (always did) to reach out to one another and in unity generate the strength needed to overcome and persevere.

This is why I believe credit unions can compete when it comes to mobile banking platforms. I believe our movement has the ability to take banking technology to a whole new level by providing members with scores of new convenient services. We just need to provide the right services at the right prices and most important, back it up with genuine service quality, and I mean a level of quality that can only be experienced at credit unions. All we need to do is summon the courage to think and do things a little differently, and most of all trust in that which should be making us profoundly different from our banker counterparts—our cooperative nature.

The way I see it, the essence of our cooperative nature can inspire and drive credit unions to a level of performance and self-understanding never thought possible. It can open the door to new opportunities and a new generation of prosperity.

One example; cooperation can make a profound difference in the way credit unions do research and development. While many would say competing with the banks on a technical level requires millions in funding for R&D, I say there’s more than one way to win. If funding is the only requirement to compete than how is it that we still exist today? With somewhere from a six-to-10 percent market share, the credit union movement should have ended a long time ago. But it hasn’t because there’s just something more about the way credit unions do business.

So how can cooperation make a difference in R&D? Rather than watching a host of CUSOs, corporates, credit unions, and affiliate organizations compete with one another, spending valuable time and dollars designing and developing their own versions of, let’s say, a mobile banking or a payment settlement solution suppose they all combine their resources and talents into one cooperative venture? Imagine each one contributing its share toward a united credit union effort to develop world-class solutions that would ensure the competitive advantage we all desperately seek.

I’m not suggesting these organizations dissolve their businesses or merge with one another. What I am suggesting however, is a shift in understanding how each organization is to get to the finish line; not by squashing the competition as is the custom with shareholder-owned companies but as a winner among winners by placing the needs of the many before the needs of the few—by cooperating with others for the good of all credit unions.

Could such a reality be possible within the credit union system? Look around. I see plenty of evidence indicating we have the potential. Joining hands and resources in cooperation to ensure the prosperity of the movement is in the best interests of all—all credit unions, CUSOs, corporates, and affiliate organizations. Working together not only ensures prosperity for the movement but also ensures the longevity of each individual service provider and organization engaged for the one and only purpose of serving credit unions—serving the needs of the many.

Such a future of prosperity for credit unions could be a reality. Learning how to place the needs of the many before the needs of the few is one roadmap to prosperity.

Twelve Ideas to Mark the Observance of the International Year of Co-operatives

2011-03-21T13:09:00.000-07:00

The United Nations 2012 International Year of Co-operatives is only several months away. This year-long observance promises a wealth of opportunities for credit unions, delivered on a silver platter. All we have to do is capitalize on them, whether they are opportunities to herald our cooperative brand distinction in the marketplace, gain increased exposure through the news media, or because of a heightened understanding of what credit unions are, grow our membership to levels never seen before.

Charles Gould is the Director-General of the Geneva based International Co-operative Alliance (ICA).

In this video, he talks about plans to exploit the opportunities which the international year brings to the movement. As well as revealing the slogan for the year, "Co-operative enterprises build a better world", he discusses the three key messages which will be embedded in the year-long campaign spearheaded by the ICA.

In addition to the background information Charles supplies, I have developed a list of 12 ideas to help credit unions begin to form their own ways to mark the observance. Each of these ideas not only presents an opportunity to teach and inform but to promote your credit union/cooperative brand as well. Hopefully, one of these ideas can find a home at your shop.

12 Ideas to Mark the United Nations 2012 International Year of Co-operatives

1. — Invite local co-ops to set up an info table in the lobby of your credit union.

2. — Include coupons to local co-ops in your statement mailings.

3. — Post promotional videos, photos or call-out boxes on your website providing info on the cooperative business model.

4. — Invite local cooperators to write a column for your member newsletter, discussing cooperative values and principles.

5. — Join with local cooperators to participate in giving talks and making presentations about the cooperative distinction to groups within the local community (ie: Rotary, Chamber of Commerce, schools, retirement homes, library, etc).

6. — Join with local cooperators to sponsor a kiosk at the mall, airport or library to serve as an educational tool discussing cooperatives.

7. — Organize a neighborhood volunteer cleanup and repair taskforce involving other local cooperators. Mission is to help improve properties of the elderly and less fortunate as a way to give back to the community. Solicit local Ace Hardware to provide tools and assist in PR and sponsorship generation.

8. — Each month, hold a drawing among your members. The winning name is awarded a membership in a local food co-op.

9. — Earmark a sum of money for loans reserved for promoting “green” initiatives or “social justice”-related services within the community. Promote the availability of these funds through the local news media.

10. — Present a “Cooperator Award” to a person in the community who embodies the cooperative values. You may invite members to vote for the candidate of their choice. Hold an awards dinner or reception with proceeds going to the Children’s Miracle Network or the local Red Cross.

11. — Launch your own Credit Union Angel program. Credit Union Angels are volunteers who make it a point to look in on an elderly couple or a military family whose spouse is deployed, to ensure that their needs are being met.

12. — In the spirit of cooperation, the 12^th idea is reserved for your creative contribution. Tell us what it is (using the comments section below) so we all can benefit.

For more information on The United Nations 2012 International Year of Co-operatives, visit http://www.2012.coop/

CREDIT UNIONS HAVE THE POWER!

2011-02-24T22:59:00.000-08:00

When Filene and Bergengren sowed the seeds of cooperation as a guiding principle to a nascent movement of credit unions back in the 1930s and 40s, they engendered within our system a distinct power and ability to grapple with change, to adapt and to survive.

Although there are some who I’m sure will argue that such a power does not exist, given ongoing mergers and all the recent failures, I contend that it is quite alive and in fact even thriving.

If we focus our perspective solely on the members and what is best for them, then mergers should prove to be opportunities for enhanced service; and failures, opportunities to learn how we might better retool the many complex processes that make up today’s modern-day credit union. Although a failure at a natural person credit union often times brings a stigma to that credit union and its brand identity, the members survive, typically receiving a continuation of service from another credit union, and for the most part, accomplished in a very transparent and caring manner. It’s just the way credit unions do business. I’d bet members of the former WaMu wish they could experience the same!

And when credit unions come together in a spirit of cooperation, reflecting the principles and values they share in common, they seem to always work miracles.

HR 1151 proved to be such a significant event. I might also point to the National Credit Union Foundation and many of the state leagues for the miracles they have worked in times of adversity and natural disasters. Such profound acts of charity—such miracles—occurred because of our cooperative nature; joining our hands and hearts together—cooperatively—for a common goal.

Our cooperative strength is in numbers and the more of us that come together, the greater our voice is heard and our actions noticed.

As credit union executives gather this week in Washington, D.C. for The GAC, perhaps there is no better a time to herald that which makes credit unions strong and distinct within the financial services marketplace.

More important, it’s a time to recommit ourselves once again to the vision set forth for us by our founders.

Online Video: The Gateway to Building & Sustaining Customer Loyalty

2011-02-09T21:06:00.000-08:00

SUMMARY

Mia Saini, a reporter with the Forbes Video Network, brings word from Ben Verwaayen at the World Economic Forum in Davos, Switzerland, that video will lead innovation in the years to come. My message to credit unions and cooperatives after reading Mia’s blog and reviewing the findings of several Internet marketing research groups — NOW is the time to creatively harness video for your shop. Waiting for more data on R-O-I only gives your competitors that much more time to get out in front of you, transacting new business, solidifying member relationships and even attracting new members—NEW members and NEW business that could be YOURS!

SOURCES

Davos: Explosion Of Video Is Next Technological Innovation

MONEY WITH MIA by Mia Saini (Jan. 26, 2011)

YouTube — Davos 2011: The Video Innovation

Mia Saini's flip cam interview with Ben Verwaayen

Alcatel-Lucent Bio: Ben Verwaayen, CEO, Alcatel-Lucent

The Laskos Group

Online Marketing Research Organizations

ReelSEO Forrester Research Internet Retailer comScore

VIDEO KILLED THE RADIO STAR

2011-01-13T00:12:00.000-08:00

Ever do a search on YouTube using the key words, credit union? If you haven’t, you might want to get a feel for the countless videos posted to this popular site by credit unions, leagues, associations, and those of us like me who have an affinity for the movement.

When you do your search, you’ll come across campaign videos like those recently completed for the Nebraska Credit Union League. Those were the latest salvo in the credit union vs. bank series of videos I found. Other leagues and associations had their videos posted as well. Even the Ghana Cooperative Credit Union Association had a presence. And yes, the NCUA was also among the mix, making sure that our friend Suzie was up front and center.

All of these video contributions by credit unions should come as no surprise since more video is uploaded to YouTube in 60 days than all TV networks created in 60 years. YouTube is by far the dominant video platform today. Every single minute, 24 hours of new video material are published on YouTube (sources: ReelSEO, YouTube).

What’s driving this seemingly insatiable thirst for video? Could it be e-commerce?

While doing some research on the explosive growth of video, I found it reported by ReelSEO that e-commerce sites that use product videos sell up to 45% more! For instance, Onlineshoes.com says it sees a 45% higher conversion rate for customers who watch videos on its web site. Online shopping king Zappos.com says it sells up to 30% more for products that it shows in videos instead of just static pictures.

And now, according to Marketing Sherpa, “Online video is second only to word-of-mouth for its ability to influence decision makers in every stage of the purchase lifecycle . . . No marketing effort is complete without incorporating online video to drive awareness, leads, customer acquisition, and loyalty.”

So it’s no wonder we’re seeing all those credit union-affiliated videos on YouTube. Perhaps credit unions have finally come to appreciate the value and power of video in communicating with their members and various publics. But, have they really done so?

The average U.S. Internet user watches 186 videos per month. How many of those 186 videos are produced by credit unions?

If member communications are essential to building brand loyalty, disseminating important information, providing education, retaining members, and maintaining the cooperative enterprise, then why do we not see more use of on-demand, streaming video as a way to compliment the credit union’s monthly print or electronic newsletter?

Why has no one produced a monthly comedic series featuring the antics of “The Little Guy” that is accessible only through smart phones and the mobile banking platforms used by credit unions?

Perhaps an explanatory video might be more accommodating to directors in helping them prepare for board meetings, rather than the typical board packages they receive today. I’m sure you have some great ideas as well, yet instead, all it seems we are willing to do is continue the “credit union versus bank” series of videos.

Remember the debut of MTV and Video Killed the Radio Star? There should be no doubt that we have access to a very powerful and influential medium. All the data I found online about video clearly supports this thesis.

And, in looking to the future, our appetite for video will only grow more intense. Cisco Systems is predicting that it would take more than two years to watch the amount of video that will cross global IP networks every second in 2014.

What’s your strategy for video going to be?

LET’S DO IT RIGHT

2011-01-04T12:19:00.000-08:00

Happy New Year to all who embrace the cooperative principles!

We are now less than one year away from the start of the United Nation’s International Year of Cooperatives and one way I believe that credit unions (as financial cooperatives) can prepare to celebrate this once-in-lifetime event, should be in association with the new financial literacy rule on federal credit unions.

The details of the rule (recently outlined by CUNA) state that the NCUA wants to ensure that federal credit union directors have a sufficient working knowledge of their credit union’s financials going forward. The mandatory level of financial literacy expected among the directors will depend upon the complexity of each individual credit union’s balance sheet.

The regulation requires that directors:

· Have at least a working familiarity with basic finance and accounting practices

· Have the ability to read and understand their credit union’s balance sheet and income statement

· Be able to ask, as appropriate, substantive questions of management and the internal and external auditors

The regulation will become effective Jan. 27, 2011, and compliance with the financial literacy portion of the rule will be required by July, 27 2011.

So you guessed it. The mad rush is now on to provide training to credit unions that will help them be in compliance with the ruling. CUNA, NAFCU and the leagues are all lining up to help. But in doing so, I wonder if the providers might also be missing a great opportunity?

What good is it if credit union directors have the ability to make sense of the balance sheet if they don’t understand the philosophy that governs it?

If it’s true (as I’ve been told by many CEOs themselves) that a majority of those who serve on credit union boards don’t have a clue about the principles defining a cooperative business model, then all I can conclude is that providing balance sheet training without including a study of cooperative philosophy will make credit union directors no different from their counterparts sitting on the boards of local community banks or quite possibly the boards of Wells Fargo, Citibank and Chase as well.

As you can see, I believe that with this new ruling by NCUA comes a great opportunity for the movement to also educate directors on what it means to be a credit union and what defines the credit union business model. By providing such education along with training on balance sheet mechanics, we will not only strengthen our cooperative ethos but also create a more conducive environment for celebrating the International Year of Cooperatives in 2012. We have a great opportunity to do it right!

Strategic Plan #1 – Increase Member Loyalty

2010-12-08T02:11:00.000-08:00

CUNA News Now carried a story yesterday titled, Report: Increased loyalty leads to higher loan volume.

The article reported findings supporting the fact that member loyalty is directly associated with lending volume. The December 7th article reads, “Credit unions that want to improve their lending volume should look to increasing their member loyalty levels.” It points out that members classified as truly loyal fulfill three characteristics:

“1. They definitely would recommend their credit union to others;

2. They definitely would contact their credit union the next time

they need a financial product or service; and

3. They choose the credit union as their primary financial institution.”

That third characteristic caught my eye the most; choosing the credit union as the primary financial institution. I’m wondering, what does it take to make the credit union the primary choice?

Suppose you were to survey your members today, what percentage of them would be using your credit union as their primary financial institution? After reading the article, (can’t afford the cost of the full report) it seems to me that including an initiative in one’s strategic business plans for 2011 to increase member loyalty might make good sense.

As for tactical applications, let’s be serious and not fool ourselves. Increasing loyalty requires much more than making donations to local charities or serving cake on member appreciation day. I’m of the opinion that it involves taking the credit union to a whole new level; a whole new experience for both member and staff.

This means that the credit union must not only be on parity with its chief competitors when it comes to products, services, ease of use and access, low fees and high yield, it also must provide the member with an experience that excels beyond his or her experience of other similar institutions. Let me explain.

When I worked at The Ritz-Carlton, I learned what it means to create an experience, one that, "enlivens the senses, instills well-being and fulfills even the unexpressed wishes and needs of our guests." For The Ritz-Carlton, guest loyalty was built on guest satisfaction and that satisfaction was delivered, consistently, day in and day out, throughout all the hotels of its chain, worldwide. Satisfaction was not a tactic existing externally of the “Ladies and Gentlemen” forming The Ritz-Carlton team. No, the desire to provide satisfaction and anticipate guest needs existed deep within each of us. We were trained in it. We discussed it every day at line up. It defined our culture. It was our brand.

If credit unions are serious about increasing member loyalty, perhaps a simple lesson taken from The Ritz-Carlton might prove to be of value as a starting point. How we define our culture and how we express our brand will determine the quality of the experience we wish to give our members.

While I believe we already have all the ingredients to take credit unions to the next level, I wonder if we’re ready to let go so we might rediscover the common culture and brand we all share, the same one to which Filene himself was so impassioned.

Let’s not give consumers any good reasons to choose a bank over a credit union

2010-11-30T18:20:00.000-08:00

If there was ever a “KEY” message that should be included among all those promoting credit unions to consumers as the best choice for managing financial services, it’s this — Text "MYCOOP" to find a surcharge-free ATM near you.

All too often, I hear consumers say that one of the primary reasons they use a bank is to have convenient access to ATMs, particularly when they travel. They believe credit unions do not offer such widespread access.

So knowing what we know, what are credit unions doing to eradicate such misconceptions?

I recently came across this post on the home Web site of Xceed Financial Credit Union (Xceed Financial Credit Union). There it was, plain as day on the home page. Text "MYCOOP" to find a surcharge-free ATM near you. So I tried it out and it worked perfectly.

What a convenient tool I thought! So why is this message not plastered all over the place? Why aren’t other credit unions promoting it as well? Certainly we are cooperatives and in this particular case what is good for one is good for all.

Then I thought that perhaps it might be that we have forgotten one of the fundamentals of effective communication and brand marketing; you have to tell them again, and again, and again . . . and, not just on one channel, using one medium, but across all media and all channels.

Let’s not give consumers any good reasons to choose a bank over a credit union.

* * *

Text "MYCOOP" to find a surcharge-free ATM near you.

The next time you're out, about, and short on cash, you can now

use your cell phone to find any of 25,000+ surcharge-free CO-OP ATMs.

Simply send a text from your cell phone to "MYCOOP" (692667).

In the body of the text, enter your address (with city, state, and zip)

or intersection (with city and state).

In about 30 seconds, the service will reply with the nearest

CO-OP network surcharge-free ATM.

If you need to find additional ATM locations,

simply reply "MORE" to the message and another

listing of surcharge-free ATM locations will be sent to your cell phone.

The locator service is free but standard text messaging rates do apply.

* * *

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

2010-10-28T10:50:00.000-07:00

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?

12 Ways to Observe National Co-op Month

2010-10-02T10:55:00.000-07:00

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.

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

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?

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?

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.

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 www.woccu.org.

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.

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.

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.

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.

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!

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

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

http://www.cuna.org/finlit/icuday_index.html

The National Cooperative Grocers Association—NCGA

www.Go.coop

The National Cooperative Business Association—NCBA

http://www.coopmonth.coop

The International Cooperative Alliance—ICA

www.ICA.coop

Lip Service or Conviction

2010-09-05T12:08:00.000-07:00

I submitted a blog exclusive to the Credit Union Times last Friday. In this posting, I opine on what I see as an irony—two major issues are concurrently knocking at the doors of credit unions, seeking a response. One issue requires credit unions to decide whether to maintain settlement and investment services within the cooperative credit union system. The second is a global opportunity to promote the value proposition of credit unions (our cooperative business model and its values and principles) during the United Nations Year of Cooperatives in 2012.

The convergence of these two issues at the same point in time will undoubtedly require credit unions to re-examine their understanding and support of the cooperative business model. I just think it would be an embarrassment if a decision on one issue was contrary to the other.

When all is said and done on this pivotal point in time, I wonder if history will record credit unions as only paying lip service to the principles they so boldly profess? Or, will the decisions credit unions make on these two issues reflect the convictions they hold for the distinct value that can only come from a cooperative enterprise?

How do you see this scenario unfolding? Share your thoughts on the Credit Union Times website at Living the Credit Union Legacy.

What Kind of Professional Are You?

2010-09-01T15:25:00.000-07:00

I had a conversation with a dear cooperator friend of mine yesterday that focused on credit union philosophy. As we chatted, she shared an insight that made me suddenly pause and reflect on what credit unions really mean to me.

I’d like to share her insight with you as well, so you may also consider how you value credit unions.

She said, “Are you a communications and PR professional working with credit unions, or are you a credit union professional working in communications and PR?”

After a brief reflection, I had to admit that when I first started out in the credit union industry more than 10 years ago, I was the communications and PR professional. Today, however, there is no doubt. I am first and foremost a credit union professional practicing communications and PR.

A lot of factors contributed to that conversion, most especially my becoming a development educator and participating in the Emerging Co-op Leaders program sponsored by NASCO (North American Students of Cooperation).

However, I’d have to say the greatest influence came from befriending many individuals within the movement, national leaders and rank and file executives alike who believe wholeheartedly that the credit union/cooperative business model we espouse makes sense, delivers value and makes for a better world community.

If you believe you are first and foremost a credit union professional, don’t be shy about sharing your convictions. You never know how you might influence another person’s life’s journey or for that matter, the industry you have come to love.

A Question of Balance

2010-07-21T20:53:00.000-07:00

I recently participated in a meeting of credit union development educators in Las Vegas. “DEs,” as we are affectionately known, are at times referred to as those who drank the “Kool Aid.”

Well, I’m not sure if it was Kool Aid I drank, but one thing is certain. When it comes to DEs, never underestimate their passion for credit union philosophy and the cooperative values and principles that define our credit union business model. Such enthusiasm contributes to the ongoing vitality of the credit union system, helping us to maintain our roots in all that makes us distinct within the financial services marketplace.

Yet, passion alone for cooperative philosophy and values should not be seen as the summation of what makes credit unions tick. Let’s also remember that as co-ops, credit unions are first and foremost a business.

Without efficient business strategies, objectives and plans tailored to deliver services to the owners of the credit union as intended, our ability to care for the community, to help the underserved, and to exercise social and environmental responsibility would be curtailed, if not, disabled.

Both business operations and cooperative philosophy must go hand-in-hand. They must constantly influence and challenge each other if we are to produce the “credit union experience.” However, bridging the business aspects of a credit union with its distinct philosophy can be quite a task.

I see it as a balance.

Credit unions require a healthy balance of financial business principles and acumen with a philosophy defined by a set of seven cooperative principles and values. Tilt too far toward the business side and we become no different than a bank; too far to the other and, well, you get my point.

And just as it is in riding a bike, balance becomes a lot easier to achieve when moving forward than standing still.

This might explain why at times we experience a certain level of tension and uneasiness within the credit union community. (Could it be from trying to maintain a balance while standing still?)

For example, our movement has staunch co-operators, individuals who live and breathe credit union values and philosophy. We also have folks who at times appear like they belong more in a banking office than within the credit union environment. Stand still and the differences in philosophies between both groups may be startling, but move forward, together in cooperation, and something wonderful occurs—a natural balance of the philosophy and operations begins to take shape.

However, what happens should we find ourselves standing still, refusing to cooperate, focusing on the differences, and forgetting that credit unions are cooperatives? I am of the opinion that is where we as a credit union community are. We have fallen “out of balance.”

In recently talking with a variety of leaders from throughout the credit union community, along with reading news articles and letters to the editors as published in the trades, I feel that this “out of balance” impression I have is growing more prominent each day.

Many of the executives with whom I spoke said that trust among one another today is at an all-time low. Chapter gatherings, once an opportunity to network, share and learn from each other are far from what they used to be. A growing number of volunteers and executives alike are forgetting their cooperative roots and the principles defining the business model entrusted to their care. Cooperation with one another is being supplanted by walls of separation where one ego is pitted against another, one credit union business against that of another. This is not what credit unions were meant to be!

All anyone has to do is talk to some of the veterans in our movement and he or she will quickly hear them say how we have changed and lost our sense of direction as a movement, or as I maintain, our balance. I’m afraid that if left unchecked, this will all eventually fester, contributing to the demise of credit unions sooner than later.

Today, we find ourselves at a critical point in our history, unlike ever before. If we are to survive, I believe we desperately need leaders with the charisma of Filene and Bergengren. And, we need a rallying cry! We have to find a way to come together in cooperation so we can harness the strength one unified movement produces, for only this level of strength will help us overcome the challenges we are facing.

And, we ought to start moving forward right now because in less than two years, we, within the credit union sector, will join with our cousin cooperatives throughout the world to celebrate the United Nation’s Year of the Cooperative.

With 2012 right around the corner, will the testimony we bear for ourselves and our movement reflect a unity of strength and cooperation? I can only say for now that how we mark this occasion remains a question of balance.

“See the writing on the wall, hear the mirror's warning call . . . Time is now to spread your voice; Time's to come there'll be no choice.” (From the album, “A Question Of Balance” by The Moody Blues, 1970)

Make Members Feel Like Owners: 10 Ways to Get Started

2010-06-14T16:53:00.000-07:00

In a recent blog submission to the Credit Union Times, I discussed my thoughts on making ownership the credit union value proposition.

I related some personal experiences at credit unions I joined, recalling that none of them ever made me feel like an owner. Why owner? Well for me, being assigned member status is both overused and overdone in our culture. Everyone is offering membership of one kind or another; from hotels to grocery stores.

On the other hand, if the emphasis was placed on being an owner, a whole new sense of loyalty and allegiance would come into play.

I see ownership as a way to create a more profound and vibrant bond, albeit one that also requires me to relinquish a certain level of complacency, becoming more engaged in the enterprise. The dynamic ushers me to the front and center of the organization, creating for me a vested interest in seeing the organization succeed and prosper.

You can read the entire blog submission at Credit Union Exchange

In the meantime, since I’ve proposed discarding the term “member” in favor of “owner,” I’ve put together a list of 10 ways to help you get started in making your credit union users feel like owners. E-mail me for a PDF copy.

MAKE THEM FEEL LIKE AN OWNER

10 Ways to Get Started

I. Key to the Credit Union

At sign up, give the new owner the Key to the Credit Union. Like the Key to the City, the Key to the Credit Union is a symbol and gesture, representing a special bond of affinity between the recipient and the credit union.

II. Honorary Welcome By the CEO

Upon joining, extend the new member a personalized welcome by the CEO or another Chief Executive. As an example, at the start of orientation at The Ritz-Carlton, the entire leadership team of the hotel, the General Manager to Head Chef, personally greets all the new employees. They made the time to do it because they viewed the new employees as important, and what an impression it made!

III. Owners’ Meetings

Hold monthly meetings for the owners (not to be confused with Board Meetings) focusing on informational and educational topics pertinent to the owners, and use multiple channels to attract participation; in-person venue, podcast, webcast, video recordings, etc. In addition to hearing from the CEO and CFO, other presenters may include a board member, city council rep, police chief, local doctor, state senator, etc.

IV. Monthly President’s Summary

Include a summary of the month’s operations with the owner’s monthly statement

V. Referral Dividends

Provide some type of dividend to an owner when he or she gets a new owner to join the credit union. The dividend may take the form of money, a service, or a donation to their favorite charity.

VI. Recognize Owner Birthdays

Acknowledge an owner’s birthday by sending a card, or giving him or her two movie tickets or a discount coupon for groceries at a local food co-op, or a dinner at a local restaurant.

VII. Owner’s Lounge

Within each branch, create an owner’s lounge, a workplace away from home for the owners. This would be akin to Delta Airline’s Crown Room.

VIII. Concierge Service
Provide owners with a concierge service to handle routine services such as making dinner reservations, ordering flowers, etc.

IX. Owner’s Hotel Discount

By working together with other credit unions and co-ops (cooperation with other co-ops), establish an “owner’s rate” with a hotel chain. The rate is low and consistent at all of the hotel’s locations.

X. Ownership Card

In cooperation with other credit unions and co-ops, as cited in number IX, present the new owner with an Ownership ID Card. Upon presentation at other co-ops, the owners receive a discount for their role as owners of a credit union.

By Walt Laskos, CUDE waltlaskos@gmail.com

June 2010

The Key to Consistency in the Brand Experience of Credit Unions

2010-06-02T14:53:00.000-07:00

Most marketing and advertising execs would agree that a brand is the total experience one has of an organization. This includes its history, reputation and the caliber of its staff; its products and services, how they are packaged, priced and named; its style of communication and advertising.

Let’s now apply the same definition to credit unions.

If the very nature of a credit union’s brand is the experience we have of the credit union as previously defined, can we ever possibly hope to establish a national branding campaign for America’s credit unions? Such an effort would appear to remain forever evasive to our grasp simply because there could be no consistency. Credit unions are all over the map when it comes to providing one common, consistent experience of what they are and what they stand for within America’s financial services marketplace. Or, is the achievement of consistency much simpler and accessible than we think?

My personal experience of brand development and management came when I was employed by The Ritz-Carlton back in the late nineties, when the hotel company was seeking to capture its second Malcolm Baldrige Service Quality Award. As a member of the leadership team, we all worked very hard to earn that second award. By doing so, we proved the first Baldrige award was no fluke. We proved that The Ritz-Carlton was by far the best, par excellence, when it came to lodging accommodations and service.

One of the branding lessons I learned during my employment at The Ritz-Carlton was the importance of consistency. It was extremely important for a guest to receive the same, exact, five-star Ritz-Carlton experience whether the guest was staying at our Dubai property, the Marco Island resort or at our Marina del Rey, California, property where I worked. Consistency meant that a guest always knew what to expect and what to count on when walking into any Ritz-Carlton hotel, anywhere.

That consistent emotional feeling associated with pleasurable memories of the finest quality in accommodations coupled with attentive and personalized service, are at the foundation and strength of the Ritz-Carlton brand. Delivering that value proposition was drilled into us, over and over again as “Ladies and Gentlemen serving Ladies and Gentlemen.” We all lived by the Ritz Credo, “The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. . .” Such efforts further defined our brand and the Ritz-Carlton way. And, the experience was exactly the same for every property, everywhere throughout the world.

Can the same be said of consistency across America’s many credit unions?

Certainly there are credit unions distinguished for having a very strong presence among the underserved, compelled to provide an alternative to the local payday lenders. Others venture down a different path, being known more for their ability to deliver a greater rate of return or perhaps valuable educational programs aimed at ways to save or how to purchase a house. Some credit unions carry a reputation for their devotion to serving their members, while others for their spirit of cooperation in the community and among other cooperatives.

While I see no departure from such healthy diversity among credit unions, all of which, of course, results from the corporate or civic nature inherent in the membership segment served by the credit union and the management style of their executive team, I have to wonder if such diversity prohibits anyone from having a consistent experience of a national credit union brand, from one shop to another.

At first glance, it may appear not possible but if we look deeper we will discover that consistency is possible provided credit unions fully recognize and adhere to a value proposition that’s inherent in their nature and business model. It’s a value proposition that’s common and consistent to every shop regardless of the seg they serve. The value proposition I speak of is our cooperative principles.

I believe a national branding campaign for credit unions is possible and would be highly achievable if we based it on our cooperative principles. Emphasizing our not-for-profit status or even member ownership does not adequately approach the pervasive power of our distinct cooperative nature, defined as being,
- Democratically controlled by the members;
- Offering a return based on a member’s economic participation;
- Maintaining an autonomous and independent structure;
- Having voluntary and open membership;
- Providing education to members;
- Extending a hand of cooperation to other cooperatives; and,
- Demonstrating a genuine concern for the community.

Let’s face it; we all don’t have to be exemplary in how we practice these cooperative principles or measure our performance or allegiance to the movement by the depth of our adherence to them.

All I’m suggesting is that they will always remain the bedrock by which the very nature of credit unions are defined. While they may and should be hung publicly in our lunch rooms and board rooms, I believe they can also serve us very well as providing the framework for a national branding campaign.

So the next time there’s talk about a tagline for your credit union, consider one that other credit unions could use, one that offers consistency in message and values, and one that would certainly embrace our common cooperative value proposition.

My suggestion: “A Member of America’s Cooperative Family.”

Why Must Credit Unions Resemble Banks?

2010-05-18T10:48:00.000-07:00

Your credit union offers financial (a.k.a. banking) services to people, right? Then why is it that the venue where those financial services occur resembles a typical, run of the mill, bank branch? What kind of a perception does that setting communicate to those who use your credit union?

Seriously, can the same functions occur without teller windows and a teller line? Does the building have to be called a “branch?”

If I recall correctly, the now defunct WAMU some time ago introduced a different design and layout for all of its “branches.” Tellers sat at small cube-like desks. The atmosphere was much more informal and comfortable. The change was widely heralded among WAMU’s diverse customer base.

In the mid-nineties, back when I was working for KeyCorp in Cleveland, Ohio, the bank introduced a campaign to redesign its branches into “financial centers.” Key undertook the initiative to appeal to small business entrepreneurs, offering them work stations, Internet access, and even in certain locations, an adjoining Starbucks kiosk. The move was intended to better acclimate customers to an atmosphere supportive of much more than teller transactions. Key’s Financial Centers were meant to be your office away from home.

While Key Bank may not have succeeded in following through with transforming all of its neighborhood locations to “your office away from home,” Starbucks, on the other hand, certainly has filled the void. Today, Starbucks is much more than a location to purchase coffee! Just look around next time you stop in for a latte. Now suppose a credit union were to support that same kind of environment?

With credit union locations all across America, how should we be re-designing and re-positioning our physical locations to be more than a venue meant to simply deposit money or withdraw cash?

Maybe we can start by making them look a lot less like “bank” branches? I don’t know about you but the last time I walked into a bank branch followed by my credit union, I didn’t see much physical difference outside of more smiling faces at the credit union.

Is it because financial activity dictates a certain look which we are obligated to use without question? Maybe it's so. You tell me.

All I know is that credit unions stand for so much more than banks. If that be true, then let’s start to find ways to creatively make our credit unions look more like “Owner-Centers,” clearly recognizable as being part of America’s co-op family.

A REAL Solution For Service

2010-04-27T11:55:00.000-07:00

I participated in a webcast today where a number of folks provided valuable information and commentary about the REAL Solutions program ( http://realsolutions.coop ).

In case you haven’t heard about REAL Solutions, it was established by the Filene Research Institute in 2004. It is a dynamic program providing credit unions access to tested business models and strategies in order for them to better reach and serve new (or developing) consumer markets. In 2007, REAL Solutions became the signature program of the National Credit Union Foundation.

The primary goal of REAL Solutions is to increase the number of credit unions that attract and serve young adults, immigrants, minorities, disabled citizens, seniors, and other low-wage and low-wealth working families. To be successful in meeting the needs of these consumers, credit unions must offer attractive products that are mutually beneficial to both the credit union and the consumer. To assist the credit unions in that effort, REAL Solutions transfers programs, information and skills to senior staff of state credit union leagues and associations. From there, each state league or association further adapts the program to meet its own unique priorities and that of its member credit unions as well.

Today REAL Solutions supports the outreach efforts of 650 credit unions in 34 states. Oh, and lest I forget, “REAL” stands for “Relevant, Effective, Asset-building, Loyalty-producing” Solutions.

Sounds good, doesn’t it?

So, why is it then that in a movement obsessed with a mantra of people helping people; a movement motivated by a distinct set of values and principles (See Rochdale Principles, particularly member education and concern for community); a movement which takes great pride in its ability to serve the underserved, there are only some 654 credit unions out of thousands and 34 out of 50 states participating?

If the programs and expertise provided by REAL Solutions are tried and tested, the best of the best, then wouldn’t one think it’s a no-brainer to see credit union folks eagerly lining up to tap such a valuable resource? Or, are the remaining shops already maximizing the effort with their own initiatives?

After all, the REAL Solutions program not only enables a credit union to LIVE the business philosophy it preaches everyday, but to add to its bottom line by reaching out and attracting many new members in a manner that will enhance its brand identity, both in the financial services marketplace and in the local community as well.

Maintaining Our Edge

2010-04-14T15:37:00.000-07:00

I came across a Tweet the other day that startled me. It was a re-tweet from James Lay in Utah, a credit union social media expert. It read:

“Listen up Houston CUs RT @adrienne78 I did not feel a warm greeting by more than one CU in my area but bank smiles and knows my name.”

Could this be so? Are credit unions starting to slip in the gains they achieved during the recent recession?

There’s a saying among surfers that once you climb to the crest of a wave you have to work all the harder to stay there!

Are we working harder to maintain the edge we realized during the past two to three years?

To do so, we have to continually look for new and exciting ways to maintain the buzz about the value credit unions have to offer, not only all the good things we delivered during the recession but the benefits we still can provide today and into the future. We have to do everything we can to hold on to those new members who walked through our doors the last couple of years, deeply frustrated by the behavior of banks.

There should be no doubt among us in knowing that right now the banks are shoveling tons of money as well as sweet, sweet honey — BIG TIME — at consumers to win them back.

Are we just going to sit there?

Is This “Owner-Thing” Really Lip Service?

2010-03-16T22:19:00.000-07:00

I was in Las Vegas last weekend on a family outing and from all that I had observed I’d have to say we’ve emerged from recession and are on the road to recovery!

Although there seemed to me to be a lot more penny slots on the gaming floors, all my other empirical observations—crowds of people gambling, dining, and going to shows—suggested that either all these folks, representing a cross-section of America, were out for their last binge or they all had their fill of the recessionary blues. My guess is the latter. It’s time to move on. Anyway, who would want to lag behind and wallow in the pain of the past few years?

Yet, amidst all the encouraging signs I witnessed, I still couldn’t help but think about my own recessionary pain and how it had gnawed away a sizable chunk of my 401k savings. "Should I really be in Vegas," I thought.

Yet, the truth of the matter is this—life goes on.

There’s nothing more I can do about the losses in my 401k account now. What’s done is done. Surely I can’t point a finger at CUNA Mutual, even though they manage the various portfolios that make up my 401k account. Nope, that’s not going to work. I just have to accept the fact that I sat there like a lug and did not take any precautions like rearranging my investments, placing them in the safest portfolios before the world was rocked by the financial collapse. Why is it always so hard to come to that conclusion—to accept the responsibility and do what needs to be done, no matter what.

I read the Wall Street Journal every day. I follow the commentaries of many economists. All the trends pointed in a negative direction. Yet, I just sat there.

With ownership comes a price—responsibility—and in this particular case, I failed to exercise it. You can now bet going forward, though, that I won’t be making that mistake again. I promise you.

And, I’ve also come to conclude that the same lessons I learned about ownership and responsibility also apply to a world governed by the principles of the cooperative business model. In that world, should it not be true that the responsibility for the governance of the organization extend well beyond a board of directors to the owners as well?

If indeed those who participate in a co-op are considered its owners, then shouldn’t they enjoy a primacy in determining how the business is run? At what point should they exercise that responsibility?

If that is not the case, particularly among credit union owners, why then are the owners willing to surrender that right? Or is it that this "owner" thing is really lip service?

Come on now, how many owners showed up at your credit union’s last annual meeting? Or, maybe I should ask, how many owners did you want to show up at your credit union’s last annual meeting?

Ownership brings with it a level of responsibility; a responsibility for the end-results and for the performance of the board and management. Ownership by the members is a critical distinction that makes a cooperative business model different from an investor-shareholder model.

Put yourself in the shoes of a restaurant owner. While you might hire a chef and perhaps someone to manage the business for you, I’d be willing to bet that you would still not sit idly by but make sure your expectations for what’s on the menu, for how customers are treated, and for how the business is earning a profit are all met. After all, it’s your restaurant. You are the owner! Ultimately, you are responsible. If something goes badly wrong, you know whose phone will be ringing off the hook.

Perhaps this is why I have become more troubled than ever these days when I read articles in the credit union trades calling for an investigation into the causes that fueled the losses within our industry. Who’s to blame? Would any investigation serve as an indictment of the owners as well?

While I agree it’s vitally important to understand what contributed to the demise of so many portfolios (so that we can take the proper corrective action to ensure this does not occur again), I hear nothing being discussed about the role of ownership at a financial cooperative. What are the owner’s rights, responsibilities and yes, even the expectations? How does that get passed on to the board? And most important, should the board at a credit union function in an identical manner to a board at, let’s say, a bank?

Has the role of the member/owner in the credit union segment of all the world’s cooperatives been reshaped where today the responsibilities of ownership are no longer viable; no longer reflective of the Rochdale principle by which a credit union is defined?

The Seven Cooperative Principles: How Committed Are We?

2010-02-22T13:10:00.000-08:00

I’m quickly learning that any calls for credit unions to pause and rediscover their roots might prove to be a futile exercise if we credit union folks don’t also stop to consider how much we are truly willing to embrace and actualize the real essence of being a cooperative. I’m referring to the Seven Rochdale Principles associated with the cooperative business model (http://www.creditunion.coop/history/cu_philosophy.html).

How committed are we to the principles, or do we find ourselves picking and choosing what fits best to meet our own particular needs?

I’m willing to bet that many draw a sharp distinction when it comes to credit unions versus cooperatives. It would be cool to hear arguments supporting the thesis, but quite honestly, is there really a distinction? In my mind’s eye—no.
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Yet, there have been numerous occasions when I’ve heard tenured credit union officials shutter from sharing their thoughts and beliefs about co-ops and our defining principles and values, acting as if such discussion was reserved for the hippy communes and flower children of the ‘60s.

Why is that so? A wealth of factual evidence supports the cooperative business model and everything it stands for—its principles and values—as being a solid and successful manner of conducting business.

Such success accounts for the move by the United Nations to recognize the valuable attributes and contributions flowing from the cooperative business model, and the value we bring to both the marketplace and lifestyle of millions. The UN’s proclamation that 2012 be The Year of Cooperatives sets the stage for all the eyes of the world to look at us—yes, credit unions as well. What will folks see?

In the Nov/Dec 2009 issue of the Cooperative Business Journal (http://www.ncba.coop/pubs_cbj_current.cfm), Dan Mica, President/CEO of the Credit Union National Association, talks about the relationship between credit unions and cooperatives in a full-page article. One bright spot he points to is the Cooperative Alliances Committee, formed to foster mutually beneficial business- and advocacy-related partnerships between credit unions and other cooperatives.

Just imagine how much we all could benefit and grow from such partnerships? For instance, imagine the power of one unified cooperative voice in all cooperative-related advocacy initiatives.

So what’s stopping us?

Mr. Mica summed it up quite directly, saying, “The Cooperative Alliances Committee has discussed that more of these partnerships can form if we overcome a persistent hurdle: the lack of a shared identity between credit unions and other cooperatives. I am convinced that if credit unions and other co-ops had a greater recognition of our shared principles and history, we would see greater interaction between these cooperative sectors.”

And, “greater interaction” for me spells out greater prosperity for us all.

Mica strikes an important chord. So, how committed are we to the Seven Rochdale Principles? Are we willing to accept everything that they stand for?

The question reminds me of a story I heard quite some time ago. It helped me to better understand the price of commitment and how much further I had to go attain the price.

Remember a high-wire acrobat from back in the 70s named Karl Wallenda? He was the founder of The Flying Wallendas, an internationally known daredevil circus act famous for performing death-defying stunts without a safety net.

Well, on one of Karl’s famous walks across a high wire strung between two towering structures, a young fan named Peter was on the ground standing among the crowd, viewing Karl’s carefully calculated steps across the sky. In watching, he became so mesmerized and excited by Karl’s skill that he sought him out after the walk, proudly professing his deep esteem for Wallenda and the unique abilities he embodied.

“Peter,” Wallenda said, “If you really believe I’m as good as you say, come back tomorrow when I plan to perform the walk again. This time I’ll be pushing a wheel barrel and I’d like you to be in it.”

Now ask yourself, “How committed am I to the Seven Rochdale Principles?

I know I still have work to do!

The Time Is Right To Re-Discover Our Roots

2010-02-08T01:32:00.000-08:00

When future generations of credit union folks look back to the Great Recession of 2009and the havoc it created for credit unions everywhere, what do you think will be their ultimate assessment?

Now lest we forget, credit unions are financial co-ops based on a business model predicated by seven cooperative principles. Membership is voluntary and without discrimination. Co-ops are democratically controlled—-one member, one vote—-formed to be an aggregator where the benefits of membership come in the form of lower fees and better rates, not soaring profits. Co-ops are autonomous, self-help organizations that educate their members, cooperate with other cooperatives, all the while focusing on member needs and demonstrating a concern for the community.

But what was the reality of U.S. financial cooperatives during the first decade of the new millennium?

OK, let’s not kid ourselves. Can we be honest? Although credit unions still demonstrated a strong presence with the underserved, I am of the opinion that the push was on to see where the best yield could be achieved on many credit union investment portfolios. One investor was shopped against the other to see which could deliver the higher yield. All along, we failed to realize the consequences induced by the competition this practise created, affectionately dismissing it as co-opetition.

All the while, credit unions focused their attention on the bankers who were constantly trying to undermine credit union business, pushing for limits on the range of products and services that we might offer, in addition to advancing calls for taxation.

Bankers, increasing regulations, decreasing margins, and now the need to compete for members with the credit union up the block all mounted a formidable pressure on everyone, prying our focus from where it rightfully belonged——on the cooperative values and principles that are at the heart of credit unions. Why should we care about a national branding strategy we asked ourselves when our first obligation is locally to our members and the success of our own credit union?

In retrospect, it’s ironic to think that the more our business flourished, the more our behavior became like the bankers we so firmly abhor. To me, it appears we as an industry drifted from our real intrinsic nature as defined by those seven cooperative principles.

So, I only can wonder if future generations will be of similar opinion. Today, somehow, some way, I believe we have to find our way back to those principles and values that truly distinguish us within America’s financial services marketplace. I believe our survival depends on it. Wouldn't you agree?