RANCHO CUCAMONGA, Calif.-The underpinnings of an effective strategic plan are strategies that ensure the CU has the financial strength and structure to react to market changes.

Stan Hollen, CEO of CO-OP Financial Services, told Credit Union Journal that the recent recession has taught CUs that the planning cycle cannot be long-maybe 18 months and not more than three years-and that the organization must be nimble to react to the unexpected.

"Less than five years ago who would have thought interest rates would be this low, or that we'd be facing the effects of the Durbin Amendment. Anymore, if the credit union is not clairvoyant, it has to be structured to react and move quickly, and plans should support that structure."

Essential to planning is setting up the credit union to make sure it has the financial strength to put its plans into place, and also to weather any unexpected storm-at least 8% capital is a good start, Hollen suggested.

That capital ratio could be impacted by all the deposits coming in, and with investments-including overnight funds-paying so little, lending must be a priority, insisted Hollen, who urged CUs to open up lending through more delivery channels and products. "Do it prudently and watch your standards," cautioned Hollen, who said an entry into commercial lending must come first with acquiring the expertise, either in-house or through a CUSO."

Where To Put Focus

Hollen said it cannot be stressed enough that all the new members coming over from banks must be turned into profitable relationships, so push checking and debit. On the cards front, plans have to include addressing EMV, which Hollen thinks big banks will be the first to aggressively implement, possibly later this year.

Finally, while it's not simple to build into strategic planning sessions, collaborating with more credit unions should be part of planning discussions. "Collaboration is what makes our industry strong," offered Hollen. "Banks don't do it. But we need to be even more open-minded about collaboration to find new ways to work together."

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