There are deal-breakers and back-breakers, and then there is the question raised by the Senate passage of legislation to allow NCUA to stretch out the costs of the corporate CU bailout for as long as eight years-will it be the ice breaker?
In this case, the ice packed around the U.S.S. Credit Union in the form of frozen initiatives and chilled growth strategies. Economic recoveries aren't so much number-dependent as they are attitude-dependent; that much-discussed "bottom" will someday be quantified by economists but it will arrive much sooner in the form of an abstract attitude that the floor has been hit and things are rebounding (albeit slowly).
It's almost unimaginable that losses just posted by some of the corporates, particularly WesCorp, will ever be surpassed, or that credit unions will be handed future "surprise" assessments by NCUA. Ideally, that creates a "the worst is behind us" mindset that should have credit union decision-makers opening the spigot on projects, marketing and other efforts aimed at kick-starting growth and getting the CU story out in front of a country eager to hear it.
As Credit Union Journal's recent Grow Show made all too clear, the size of the budget is no indicator of the size of the imagination. Indeed, with necessity the mother of invention, her offspring most often were found at small and midsize CUs. If a bottom has been reached and if there are some signs of life yet to be found in 2009, let's hope the innovative spark isn't lost. After, all, nothing acts like an icebreaker quite like a fire.
"This has made me think differently about just about everything I do," said Johnson. You can get more info at www.ignitecu.org.
The credit union has set a prime example of what can be done with a single-minded focus on aggressively watching expenses and building capital. One example: it used to have six branches, today it has 23-and it employs the same number of branch personnel. The bonus dividend has helped DFCU Financial stay competitive without having to lock itself into disadvantageous deposit and loan pricing, while remaining very competitive. And unlike a loan or CD rate, in a pinch a bonus dividend can be reduced or even eliminated.
Shrewdest of all is that the CU doesn't hide its bonus payments to members; it's created a microsite that even allows members and prospects to calculate their own payments (check it out at itpaystobelong.org). "This is about brand strategy core differentiation and business strategy," said Shobe, who reminded that such patronage dividends "really bring the concept of member-ownership to life."
Credit Union Journal will provide detailed coverage in an upcoming issue, so make sure to watch for it and get a dividend of your own.
Credit union marketers, many of whom have parents who were Boomers, have bought in to the concept that mom and dad will mimic the behavior of earlier groups in this demographic and turn into net savers with no need to ever again fill out a loan app. Not so fast, one expert is reminding. Jeff Hunt of CUNA Mutual told Grow Show the Boomers remain an "overlooked asset."
Boomers are likely to remain groovy borrowers (cosmetic surgery, anyone?) and even those that don't will have investment needs. Hunt also noted of CUs, "We need to think of ourselves now as more than financial services companies, and instead as health care companies, too." Look for more on Grow Show in this issue.
Frank J. Diekmann can be reached at firstname.lastname@example.org.