ARLINGTON, Va.-If credit unions learn just one thing from the recession, it should be that they're not just tied together through the cooperative spirit-they are also bound together for better or worse as a regulated industry.

"We are all handcuffed together," said NAFCU President Fred Becker. "It's a cooperative system, and the insurance fund is a backstop to the taxpayer."

It's a hard-won lesson. "People are asking now what other credit unions are doing and looking at how it will impact them," Becker suggested. "You can't isolate yourself from the system."

That extra scrutiny of one's peers is usually a good thing, but it can also be a hindrance, he said. "Their hearts are in the right place, but some of the naysayers on [legislation expanding CUs' ability to make] member business loans are wrong," he said, noting that while those credit union executives are right to be taking a good, long look at what other CUs are doing and assessing whether that activity could cause a loss to the industry as a whole, they need to understand that the legislation is very conservatively written.

Be Willing To Ask Questions

Another tough lesson: examiners aren't perfect. "You can't hold the examiners in awe," Becker said. "You have to be willing to ask questions, even when people are trying to shout you down."

Moreover, credit unions have learned they are not recession-proof, added Carrie Hunt, NAFCU VP-regulatory affairs and general counsel. "Credit unions are not immune. Their members lose jobs, they feel the effects of housing prices," she said. "Even if they're taking conservative approaches to lending, they're going to feel it. They need to look at what worked and what didn't for them."

And then they need to tell their members about it. "I think we learned as a whole about the excesses of the big banks, and to market ourselves as a great alternative to them," said David Carrier, NAFCU's chief economist. "Credit unions need to be looking at opening credit card accounts, personal loans for vehicles and market new products and services to new members. And where credit unions do have competitive rates they need to advertise that."

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