Would a credit union by any other name smell as sweet?
A recent Credit Union Journal story asked several credit unions that specifically avoid referring to themselves as credit unions why they made that decision and what sort of results they've seen from it.
Not surprisingly, credit unions that drop "credit union" from their name report no backlash from members outraged that they're becoming "too bank-like," or are betraying the cooperative movement. Members are not screaming about these credit unions "losing their religion."
But are they missing out on the opportunity to make the most of what ought to be a valuable brand premise — that credit unions ARE, in fact, different from banks?
Time and time again, credit unions beat banks in a variety of surveys on customer service. Credit union members love their credit unions, these surveys suggest — and it would seem to be borne out by the now-famous "credit union grassroots" that have helped make the credit union lobby a force to be reckoned with.
And I believe many credit union members DO love their credit unions. But I also believe that the vast majority of credit union members have no idea that:
- They are members, not customers — and that actually means something.
- CUs are democratically owned and operated.
- CUs are not-for-profit.
I've noted before that prior to writing about credit unions for a living, I already belonged to two credit unions, and I didn't know any of the above three facts, and I'm quite certain I'm not alone.
You've heard it a million times: everyone "banks" no one "credit unions."
Still, consumer awareness of credit unions is growing, so could these CUs that eschew the CU name (at least in marketing materials — they're official names as stated on their charters do still include the words "credit union") be giving up a key competitive advantage?
Credit Union Journal asked just that in a recent online poll. Some 65% of respondents said "no — hardly anyone knows what a credit union is; everyone 'banks.'" Only 35% said, "yes — it's the first sign that we are different from banks and other financial services."
But this foray into the name game is just the first story in a series in which Credit Union Journal will be exploring how subtle changes over the last decade or so have combined to create a very different credit union movement.
One such change: the influx of former bank executives. Credit Union Journal's most recent poll asked whether this is a good thing or a bad thing. At press time, preliminary results showed 69% agreeing that it's "a good thing — they bring more expertise and a fresh eye to credit unions." Just 31% said it's "a bad thing — they are diluting the credit union philosophy."
But there have been other, even more subtle changes, as well. When I first started writing about credit unions in 1998, referring to the credit union movement as an industry was mortal sin. Today, I hear credit union executives refer to "the industry" all the time.
Fire and Brimstone
And I'll never forget attending my very first GAC, where then-NCUA Chairman Norm D'Amours railed about how allowing overlapping fields of membership would spell the movement's doom. I remember thinking he sounded more like a fire-and-brimstone preacher exhorting sinners to see the light and be saved than a regulator addressing the regulated.
Yes, many things have changed since then. But some things haven't changed. Credit unions usually still are the better deal for consumers. Their not-for-profit, democratic structures still do bring a valuable difference to the table. The credit union difference is alive and well.
Then again, most credit union members still don't know much about any of that. And this cooperative movement still hasn't found a way to create a true national brand to capitalize on that difference.
Not all change is bad.
Editor in Chief Lisa Freeman can be reached at email@example.com.