Since its inception in 1967, NAFCU has led the charge to ensure a solid voice for federal credit unions and to protect challenges to their interests and those of their members.
Today, I am proud to say NAFCU has achieved many successes with the strong support of its member credit unions-over 800 federal credit unions representing 60% of all federal credit union assets and over half of all federal credit union members.
Some of the more notable accomplishments include our victory in 1991 when NAFCU was the only national credit union voice to oppose the Treasury Department's proposal that credit unions expense their 1% deposit in the share insurance fund. More recently, we worked with Sen. Bernie Sanders (I-VT) to request a Government Accountability Office study on how banks and thrifts have benefited from federal tax policies and programs. The results of the report, the first to examine this aspect of federal banking policy in a long while, strongly support what we have believed all along-banks are thriving, they enjoy significant tax subsidies, and credit unions pose no competitive threat to them. In fact, over the past 10 years, net income for banks grew at a rate twice that of credit unions.
The Biggest Challenge
There have been many changes in the credit union landscape over the last 40 years as well-from the types of institutions we now find ourselves competing against (today, not just banks but mortgage companies, mutual fund companies, Wal-Mart and investment firms) to the fields of membership we serve (military, alumnus groups, employees and community-based groups). Perhaps the latter holds both the largest potential and the biggest challenge for us.
The demographics of our society have changed significantly over the last four decades. The flower children of the '60s today are in their 60s and their interests and obligations have changed dramatically. Today, many Baby Boomers are in the so-called "sandwich generation," so their needs may include financing college for their children as well as funding long-term care needs for themselves and their parents. This creates a great backdrop for us to continue promoting greater savings across generations. In fact, teenagers last year rang up $179 billion in sales, according to Teen Research Unlimited. Imagine if they saved just 1% of that!
Additionally, the makeup of our communities has also changed significantly, representing a far more diverse member base which in many cases is also underserved. For example, many individuals from different cultures suffer from a lack of confidence in financial institutions. A recent Washington Post article cited the number of people foregoing financial institutions as high as 28 million. The promise in serving this group lies in our ability to recognize their unique needs and act to fulfill them.
To this end, credit unions have long sought, and last year finally gained, authority to provide check-cashing services and money-transfer services to anyone in their fields of membership. This change in the law allows credit unions to assist many immigrants who otherwise would pay hefty fees at check-cashing outlets, and it creates a relationship with a financial institution that may lead to their eventually opening a share account with the credit union. Additionally, offering marketing materials in other languages and providing financial literacy programs go a long way toward cultivating relationships with the individuals in this membership base.
Credit unions have definitely come a long way in the last 40 years. Federally insured credit unions are now full-service financial institutions and their potency on the Hill is not taken for granted by anyone, especially the banks. And even though they hold less than 2% of America's total household financial assets, credit unions have certainly made their mark in the consumer lending market.
Taking the Lead
In the same way that NAFCU's original members were distinctly ahead of the curve in pursuing share insurance, an independent regulator and expanded powers, today's members have taken the lead in maintaining the viability of the federal charter and seeking regulatory and legislative changes to enhance it.
As a result, NAFCU has grown into one of Washington's most-respected associations- ensuring the preservation of the dual chartering system by giving the federal charter a strong, resilient voice and its own forum, and in so doing ensuring the preservation of the integrity of the entire credit union system.
The vision that a handful of federal credit union leaders had 40 years ago lives on in the direct-membership organization that is NAFCU today. NAFCU then, as now, continues to look forward and beyond-still seeking innovation, and still leading the way for credit unions to provide better services to America's 89-million credit union members.
Some Highlights From NAFCU's History
NAFCU, 1967 to 2007
1967: NAFCU incorporated in April as a national trade association representing the interests of federally chartered credit unions.
1980: A grassroots campaign, led by NAFCU members, results in President Carter authorizing credit unions to offer share drafts.
1986: NAFCU helps defeat effort to tax credit unions.
1991: NAFCU launches the Management Development Institute (MDI) to promote the development and retention of credit union management staff.
2000: NAFCU begins long-term campaign to enhance the federal credit union charter calling for expanded fields of membership, fewer limits on member business lending and reform to credit union capital standards.
2003: NAFCU-backed legislation, first introduced in the House in 2003, and known as Credit Union Regulatory Improvements Act (CURIA), would address a number of these issues.
2007: NAFCU celebrates 40th Anniversary and awards its 500th Certified Compliance Officer (NCCO) designation. This program was initiated in 1996.
Fred R. Becker Jr. is NAFCU's president and CEO. He can be reached at fbecker<at>nafcu.org.
What Do You Think?
Credit Union Journal encourages reader feedback. Letters to the Editor can be sent to Managing Editor Lisa Freeman at lfreeman<at>cujournal.com. Letters can also be submitted online at www.cujournal.com.