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The credit union slogan in Brazil is 'Those Who Cooperate, Grow,' so it should come as no surprise that a small group of U.S. CU representatives came away with some growth strategies to try to implement back in the U.S. after a recent trip to Brazil.
Growth Strategies

Bringing Brazilian Flair — And Know-How — Back To U.S. CUs

MAR 27, 2014 3:03pm ET
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MADISON, Wis. — A recent trip to Brazil organized by the World Council of Credit Unions exposed a dozen American CU professionals to Brazil's credit union system, but it may also be the last trip of its type for some time to come.

According to Joshua Fetting, training manager at WOCCU, the internship trip to Brazil was the last phase of WOCCU's Department of State program, which was funded through a grant from the state department.

"This was the second of two project grants that we received," Fetting told Credit Union Journal recently. "Unfortunately we didn't get approved for the 2014 fiscal year, but hopefully we will be applying again for the 2015 grant."

The Brazil trip — which saw a dozen interns from across the country traveling throughout the South American nation — was the eighth trip of its type WOCCU has facilitated, following similar trips to the Dominican Republic, Costa Rica, and Guatemala. For this trip, said Fetting, WOCCU selected Brazil because of its highly developed credit union movement, known as Sicredi.

"They do a lot of things that rival the U.S. movement, and I daresay do some things even better in terms of cooperation, working together and sharing back-office jobs in the way that they have developed their systems."

One of the differences between this trip and others, said Fetting, is that with previous trips "some of the takeaways were that hopefully the U.S. credit union delegates traveling down there would share with their hosts some of the innovative things that U.S. credit unions are doing. Brazil is a bit different in that they are highly developed." As a result, he continued, the focus with this trip was more on takeaways for American CU staffers, including the ways Sicredi CUs are closely integrated into their communities.

"Sicredi has not focused on being players in urban markets as much as they have in rural areas where there are hardly any other financial institutions, and they have become the center of that community," said Fetting. "That's something credit unions were very much borne out of in the U.S., and it's getting harder and harder to do that because of competition and growing markets, and it's hard to keep consumers' attention nowadays, let alone members.' We were hoping they might learn some things from Sicredi not just about financial services, but the way they get involved in schools and how they become the focal point for that community."

At The Branch & On The Farm
Three participants from the trip spoke with Credit Union Journal recently and emphasized that while the American system has much to be proud of, there is also much it can learn from its South American colleagues.

While in Brazil, participants visited Sicredi branches throughout the country to observe branch operations, how the facilities are laid out and more.

"There are more than 100 different credit unions that make up the Sicredi brand, but they leave their egos at the door," noted Terri Hendrix, community relations manager at SC Telco FCU in Greenville, S.C. "It's not just about one particular credit union. It's about the total financial cooperative movement. And they hold it together."

One reason Sicredi CUs are able to do that, participants suggested, was the way all Sicredi branches use the same branding. Terry McCoy, senior training specialist at Amplify FCU in Austin, Texas, noted that while all the branches have the same look and feel in terms of color, layout and more, "when you went into the branches, a lot of them had very specific murals on the wall which were indicative of the area," such as the as a branch in Maringá, which included murals and photos on the wall that reflected that particular community. "It was pretty fascinating to see how they individualized them, but you still felt like you were in a Sicredi branch when you walked in."

They also took "field trips" to get a better sense of how Sicredi institutions have integrated themselves into the community.

"In a lot of cases the credit union actually was started by the farming co-op," recalled Hendrix. "They took us to a farm show where they were on site and when the farmers come in to see the new technology and new equipment, new seeds, that kind of thing; [Sicredi] will be there to make loans for that member on the spot. That's member service."

For Hector Noriega, problem case officer for NCUA Region III out of Miami, one of the major takeaways was member education — not just at the credit union, but as early as grammar school, to teach the importance of the cooperative.

"They put a lot of resources and capital into training the member which I don't see over here," he said. "They teach the bylaws, the way they do business... that's a tremendous amount of time they put in, and you see the results. People are very loyal because of that."

Noriega said that as an NCUA employee rather than an employee of an individual credit union, one thing he could do at home as a result of the trip would be to work to make sure people understand how important that member-education component is. "That's something I believe we can do here... The human capital they put in to member education is unbelievable, and I think that's why they're so successful, and over here it can be done."

Thousands Of CUs, 19 People
One of the biggest surprises for the participants was something they did not see on the trip — more people.

"We have approximately 6,000 credit unions in the U.S., and only 19 people applied for [this trip]," said Noriega. He conceded that it's difficult to take two weeks out of the office, but said he was surprised so few volunteered.

WOCCU's Fetting said that one constraint WOCCU placed this time around was to try to select applicants that were in the middle of their careers rather than in the early phases.

"People in that middle-age range that are in those mid-manager positions are usually people that don't get a lot of the opportunities to get out of the office to do something different," he said. "They're usually the workhorses of the credit union where them being gone for two weeks is a serious impact."

Another twist with this trip was that seven of the 12 participants were from CUs that are members of the Cornerstone Credit Union League serving Texas, Oklahoma and Arkansas. Fetting said that not only did Cornerstone heavily promote the opportunity, but Sicredi and the league have a partnership dating back to 2010, which resulted in a high number of applications for that region.

As of now, WOCCU does not have plans set for its next round of international trips, but it plans to apply for grants for the 2015 fiscal year.

"We were approved for this year, but because of the Sequester, the funds were severely locked down at the state department," said Fetting, noting that WOCCU should know by August or September if the 2015 application is approved.

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Comments (2)
I'm NOT SURPRISED THAT SO FEW PEOPLE APPLIED FOR THE TRIP TO Brazil! First of all, there is the language barrier which for many is frustrating Second, since 9/11, there is the fear of a lack of security in many of these third world and developing countries. Credit unions talk a good game; yet, the spirit of adventure that was so prevalent in my younger days no longer exists. Programs like Development Education would appear to be making some headway at changing these attitudes as the interest generated in the Haiti program being implemented by the Pennsylvania Credit Union Association by DE candidates was overwhelming. If WOCCU would actually add a project component to its excellent program along the lines of that developed by Pennsylvania's credit unions, it is not only possible, but highly probable that the State Department will wholeheartedly support it.
Posted by joseph.wambach@pcua.coo | Friday, March 28 2014 at 8:14AM ET
Filene Research at their Stanford colloquium presented the concept of shared branding by credit unions. The concept they presented was the European model of multiple independent credit union credit unions organized into a large cooperative similar to what ACE Hardware has in the USA. I have proposed that model, including in a submission to CO-OP's Think Prize. It makes sense. It gives small credit unions the scale, the resources, the products and the support they need to compete with larger banks. It would be an important alternative to merger or liquidation. We have thousands of credit unions that are no longer competitive or relevant to their members and potential members. When credit unions lost their sponsor support, scale became very important. But unlike the banking system, the credit union system has resisted consolidation. This largely due to the fact that credit union members act like customers and move their accounts elsewhere when they don't get the service they want. Members don't act like owners (bank shareholders) and do not hold Boards and management accountable for poor financial results and lack of growth. We would have a much more robust credit union system if we followed the Brazilian model or that of ACE Hardware. There are far too many credit unions that are losing members because they don't provide the service or the services that their members want.
Posted by henryw | Friday, March 28 2014 at 10:44AM ET
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