The Side Of The Communications Age That No One Foresaw

(People) banded together to form a credit union, lend money to one another, and make money at the same time. Sounds like the ending of "It's a Wonderful Life," doesn't it? Except George Bailey doesn't work at the credit union anymore. -Recent Blog Posting

Call it e-preaching to the e-choir.

In remarks before CUNA's GAC two weeks ago Republican campaign consultant Mary Matalin observed, "We are completely out of the industrial age and into the communications age and that affects everything we do."

Matalin's remarks were canned yet she likely couldn't have found a more appropriate, living example of her observation than the credit unions who were on hand to hear her. In fact, credit unions could have told her a thing or two (not that political consultants-Matalin's married to Democratic consultant James Carville-ever listen to the regular folks) about how the Communications Age is changing an industry.

Ten years ago some credit union CEOs were beginning to think this "Internets" thing might have some legs to it, and putting on the board agenda a plan to bring in a board members' grandkid or a college intern to create a "home page" (not to be confused with the "house page" issue that Matalin and Carville could have also addressed).

I've sat through a terabyte's worth of conference keynotes and breakout sessions on what the "new paradigm" was supposed to mean, which I don't think anyone ever really understood, although a lot of consultants made a lot more than a pair of dimes talking about. Some of the visionaries were truly ahead of their time, other predictions fell in that "Dewey Defeats Truman" category. If there was a common theme among the prognosticators it was that the Internet would bring an ability to deliver services less expensively and more quickly, and would make the credit union ubiquitous. Much of that has been borne out.

But the "If you're not online, then you're on life support" crowd only got half the "Communications Age" equation right. Folks were so busy digitizing everything that could be delivered TO the member and the consumer that no one ever foresaw how the power to communicate AMONG the member and consumer would change things. Take the quote from a blog at the top of this column. It's from a member of Vermont State Employees who isn't keen on a plan to change the credit union's name to "Veristate."

"I've been seeing, and hearing, a lot of ads on how much people like their credit union. This is great, I support credit unions and used to like mine-until its board lost their minds," read a blog entry on a site hosted by a local newspaper. The credit union, says the blogger, has been running "ads that don't mention 'state employee' in them because they plan to strip that out. The impediment to getting new customers, they've decided, is the name. They got a consultant to find a name and now they're going to ram it down our throats...I want my money back. I want my credit union back."

Much to Vermont State Employees' credit, by the way, it's included on it's site a long discussion of the name change and even acknowledge some folks don't like it. You can find it at www.vsecu.com/articles/name-change-member-comments.aspx.

Vermont State Employees is hardly alone. There was a recent name-related coup d'etat at University of Iowa Community Credit Union, where members turned back a plan to change the CU's name to Optiva CU even after a member vote had approved the move and the signage had been ordered. It most certainly would not have happened had members not had the power to share their views and voice their displeasure in a forum easily accessed by others. UICCU may be right that the opponents of the change may indeed have been a minority, but they were a noisy minority who were effective at making the e-wheel squeak.

In the Old School days, boards of directors and management completely controlled the message. Everything the member needed to know was right there in the monthly newsletter, approved by committee. Well, school's out, but because many board members may not be active users of blogs and message boards, they never heard the bell ring.

They've certainly heard it at credit unions such as DFCU Financial and Lafayette FCU, and the board at Beehive Credit Union may be the next "tolled" by the Communication Age. Conversions to a bank charter were halted at DFCU Financial and Lafayette, and efforts are underway at both to recall the boards of directors. Those conversions would have been slam-dunks in the pre-Internet days when members who were upset by such plans would have been left to stew alone and wonder if there were any others like them.

Today, members of Utah's Beehive Credit Union, which has announced plans to become a bank (see story, page 1), can type "credit union to bank conversion" into Google and get 1.18 million hits. They'll find information from NCUA. Trade groups. News stories on other conversions. Articles and opinion pieces from the Credit Union Journal, and much more. Use Google's blog search tool for the same topic and you'll find 9,352 places where folks are talking about conversions. It doesn't take long for a member to figure out there's another side of the story than the one their credit union is selling them, nor much more effort to contact other members.

Blogs are never to be confused with "definitive source," and what's being communicated by both sides in all these debates is often wrong. Perhaps we'll even see some credit unions adding a VP-Communications or VP-Image whose sole job is to monitor, respond to and update all that's being said. It is indeed a communications age; react wisely, or the communications will age you.

Frank J. Diekmann is publisher of the Credit Union Journal and can be reached at fdiekmann<at>cujournal.com.