From Twinkies and Trailers to Fewer 'People' Helping People

Looking to better penetrate that Gen X, Gen Y and Gen Next markets, while also adding a revenue stream? Get ready to stock those branches with Doritos and Twinkies.

A merchant processing company called Commerce Online is making plans to roll out a prepaid debit card specifically tailored for the medical marijuana market. Call it the No Cash Stash Card.

Medical marijuana dispensaries already exist in California and Oregon, and a dozen other states also allow some use of marijuana for medical purposes. Commerce Online reports it has been "aligning ourselves with the strongest banking and technology partners within the space," and that it is preparing to roll out a pilot program soon.

There're two words you don't often want to hear in the same sentence: "marijuana" and "pilot."

The company says that because such operations currently accept only cash, operators are unregulated and the industry — not sure this is a surprise — is often subject to "potential criminal activity."

Credit Union Journal already hosts a "Grow Show." Perhaps we will add a special breakout session.

• Considering a name change at your credit union? Prepare for a cynical membership and prospective membership, according to that famed professor of marketing, humorist and newspaper columnist Dave Barry. Noted Barry, "so changing names is a sound idea, an idea based on the scientific principle that underlies the field of marketing, which is: people are stupid. Marketing experts know that if you call something by a different name, people will believe it's a different thing. That's how 'undertakers' became 'funeral directors.' That's how 'trailers' became "manufactured housing.' That's how 'We're putting you on hold for the next decade' became 'Your call is important to us.'"

• Speaking of marketing and the value of words, it's been noted more than once in this space just what a poor job credit unions do of explaining themselves and their business model to members-when any explanation occurs at all. But some do take time to talk about their differences, including Frank Berrish, CEO of Visions FCU in New York, who authored a recent column in the CU's newsletter under the headline, "What is a Credit Union? It's a Co-Op That Stands By Its Members."

The first paragraph explained how a CU works, noting "services and fees are used to supplement the costs between income earned on loans and dividends paid to depositors."

Berrish went on to explain, "since we are a cooperative, dollars lent are taken seriously, as other members have lent them with the expectation that they would be repaid. The credit union takes its responsibility of helping people in our community seriously, as well."

• Here's a subtle indicator of the effect the economy has had on credit unions. Since Credit Union Journal's inception in 1997, each week we have published a half-page of People news: promotions, hirings, retirements, etc. We've always had a backlog of items, that is until recent months as the number of such "people" items has slowed considerably, demonstrating that you may not like your job, but when there's not another job to jump to, the one you have looks a lot better. Moreover, CEOs and other long-time senior managers put off that retirement when their 401(k) has become a 201(k), and Social Security isn't looking like such a safe bet, either. And finally, there are just plain fewer credit unions than there were when the Journal first began serving credit unions.

• A tip of the cap to CUNA Mutual for bringing a little creativity to the names of two recent webinars it hosted: "Covering Your Assets" and "Spam, Shams & Other Scams."

• In remarks at CUES' recent Directors Conference in Palm Springs, Calif., Callahan & Associates President Chip Filson told his audience that the National Credit Union Share Insurance Fund (NCUSIF) has the ability to capitalize every troubled credit union in the country at the 7% well-capitalized level "if the industry were to use it as intended."

Filson should know; he was at NCUA in the early 1980s when the NCUSIF was restructured (adding the 1% deposit).

"There has become a tendency to view share insurance like auto insurance. You have an accident, you replace the car and pay the deductible," Filson said. "But a systemic financial collapse isn't the same as a single car accident. Used in that way, 'insurance' only works in normal times or at the margins in crises. We can't just expense problems away. All institutions, including credit unions, must earn their way out of problems. Capital assistance allows that to happen."

Filson added is it the cooperative model of credit unions that allows them to take a longer-term view than banks, offering, "They are market-facing and must compete, but credit unions aren't subject to shareholder-return expectations. Their tax exemption recognizes this counter-cyclical public policy role."

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

A Note to Readers

Credit Union Journal has always had an editorial mission focused on helping CUs grow. Now, we've added a tab in the left-hand nav bar called 'Growth Strategies' where CU leaders can readily find all related reporting.