We are seeing our free market capitalism disappear before our eyes.
SEC bans short-selling
Fed takes control of AIG
Treasury set to bail out Fannie Mae, Freddie Mac
The founding ideals of our country are so closely tied to the basic premise of credit unions (member-owned, democratically controlled) that I now can see how credit unions will be different in the future: they won’t exist. Whether the threat comes from the Treasury Department’s Blueprint for a Modernized Financial Regulatory Structure, which omits the NCUA from the President’s Working Group on Financial Markets and merges the NCUA with the new FDGA (Federal Deposit Guarantee Administration), or some new “measure” that the government takes to shore up the markets, credit unions will face a major threat if the government continues to bail out large financial institutions.
Imagine telling our members where they could spend their money at. Oh, I’m sorry, we have a corporate agreement with Chevron and you can’t buy gas at Shell or BP. Mister Member, we’ve noticed you’ve spent too much money in Vegas and Atlantic City in the past few months so we’re going to put your assets in control of the credit union to insure proper usage. Crazy you say, right? AIG messed up and rather than letting the people who took the risk get hammered, the government is bailing them out. Banning short selling is even more shocking to me than that.
This is a silly argument, but what would happen if a CU told their members where they could spend their money? The members would leave. Or using the US-credit union analogy again, we’d use our democratically elected officials to change the rules.
I’ll leave you with a quote from the 10 Planks of the Communist Manifesto:
Centralisation of credit in the banks of the state, by means of a national
bank with State capital and an exclusive monopoly.
Chris Saad, of Data Portability fame, posted this video on his blog. It clearly demonstrates what Gen Y’ers think about when they build a company. I also think that many other Gen Y’ers look for environment like the ones described when they are looking for employment. And if credit unions can’t attract Gen Y employees, they are probably going to have a very difficult time attracting Gen Y members.
While at the CUES Experience a few weeks ago, a number of great ideas were discussed both at the conference and at other social events. One such idea revolved around the common bond/affinity aspect nearly all credits unions were founded on and how that seems to be waning in popularity. Aside from some small, specific examples like Mt. Lehman and San Francisco Fire, most CU’s seem to be chasing the growth for growth’s sake model and going after everyone with a community charter.
During a conversation over dinner, a sporting goods store called REI came up. For those who have been to an REI, you know that it is probably one of the best customer-oriented store you’ve ever been to. What makes REI so special? They are manically driven by their products and their customers. Their staff uses their product. They know what works and what doesn’t. Their staff is very well educated for the department they work in. When you go to a Sports Authority, Foot Locker, Dick’s, or Joe’s, how many staff members at those stores can show you how to lace shoes differently to compensate for different shapes of feet or know how to measure your torso starting at your C7 vertebrae?
REI staff loves the outdoors, as do their customers. And it comes through dramatically when they are “selling” product. Walk into an REI, however, and you’ll never feel sold to because they are just trying to get more people to enjoy the outdoors.
So what makes REI so special and what can credit unions learn from them?
- REI knows who they are. Most credit unions do not. They are outdoor enthusiasts and love to help others get involved. They don’t try to be everything to everybody. They specialize in outdoor adventure and that’s it. CU’s need to figure out who they are if they haven’t already how they can meet the needs of their members.
- They have passion. They are passionate about helping people and the outdoors, not selling product. Their employees love what they do, they love what their products have to offer, and the love helping people. Getting passion for FI products it tough, but having passion for helping people fulfill their financial dreams is a different story.
- REI has the co-operative spirit. Check out the email I got from REI when my wife and I first joined. What’s the first thing you notice? I see welcome to your co-op, not the REI logo. The big part of REI membership: their 10% annual dividend. That makes being an REI member actually mean something. Not too many CU’s actually pay annual dividends anymore. Not only are there financial benefits, REI does a ton of charity work and stewardship activities that align with their customers.
Credit unions started as a cooperative venture, but so many CU’s are just converting to community charters and growing because they feel like they have to. Ron had a great post about our visit to Summit Brewing and some of the things CU’s could learn from them. Namely why they need a beer. Summit Brewing and REI make two great examples of companies that CU’s could learn a lot from. Along the way, CU’s have lost the cooperative spirit and we need to get it back if we want to survive, let alone thrive.
Unless you are an ostrich and have had your head in the sand, the US economy isn’t doing great. Arguably we are already in a recession with the dreaded word "Depression" occasionally getting thrown around if we have any type of bank runs or if more large investment or retail banks go under like Bear Stearns. Many of our members will also be experiencing this in the near future if not right now.
So in these times of devaluation of the USD, wouldn’t it be nice to have some money in euros or pounds? Lots of our members travel abroad and need euros anyway. Other are interested in euros specifically to hedge their bets in the US economy. Short of having member surveys in hand, it seems their will be a growing need for foreign currency in the future. Many CU’s along the borders already handle currency exchange without much effort. Even CU’s with a large membership base the travels abroad can do currency exchange. But having euros in hand isn’t exactly the best way to transact business.
I’ve been chatting with some people around here about the concept of any online savings account that can hold multiple currencies. The member can simply log in to online banking and view each savings account denominated with different currencies. If the member started doubting the US dollar, they could simply transfer the money from the USD account to their EUR account and the FI would handle the actual currency exchange behind the scenes.
The only company I’ve been able to find that does anything remotely similar is HSBC of Singapore, but that’s not to say others aren’t doing it. CU’s can hold foreign currency. So what’s stopping the creation of this kind of account for the US consumer? Is it a technology hurdle with online banking? Core processor support? Have other CU’s even had members express a need for such an account or is this more a private banking thing that CU’s can’t really touch?
So William beat me to the punch and Forum Solutions already updated their website, but in case you haven’t heard I’ll be speaking at the symposium this year! My topic is entitled Solutions to Meet Member Needs (or something close to that) and I’ll speak about some of the ways MaPS Credit Union has taken a problem or a need of the credit union and turned them into a CUSO opportunity.
And now after getting some more info today, I’m a little scared. Not only is Shevlin going to be there, but he will be interviewing the speakers right afterwords and facilitating the audience participation and questions! Hopefully I won’t be putting this up on my blog, but you never know. In addition, the level of speakers participating this year is phenomenal and I can only hope to live up to Tim’s awesome presentation last year! If memory serves, nearly everyone used Keynote last year, which was very pretty, but I’ll be sticking it out with my Vista laptop and Powerpoint, or maybe some fancy mind map thing like Doug did. I just have to picture everyone in their underwear, right?
Shopping around on Amazon the other day and decided to search for credit union. And the results were pretty, um, not interesting. Most look like text books and seem to be fairly dated. What does this say about credit unions? Search for social media and you’ll get a bunch of up-to-date, hip stuff. Does someone need to write a cool credit union book? Are we just in a old industry and is that what we should expect?
Blockbuster and Facebook have recently come under attack for some aspects of Beacon, Facebook’s semi-new intrusive marketing tool. Years ago, when I actually worked at Blockbuster, it was fairly well known that you couldn’t divulge what movies someone has watched. Similar to how you have the primary member at a CU, the account holder of a Blockbuster account had to given written permission for their history to be divulge to a third party, even if that person was a spouse or a "joint" account holder. When wives frequently called up to ask what movies they had out, if the account was under the name of the husband we couldn’t tell them. Not to customer friendly, but it was the law.
Movie Clique, Blockbuster’s Facebook app, lets you share your movie watching history with other Facebook users. While this sounds cool and very web 2.0, it also appears to be illegal. According to a law professor at the New York School of Law, the two companies should be preparing for incoming lawsuits.
So what does this mean for CU’s? First off, that it is actually harder to share movie rental history with a spouse than it is to share banking transactions. Personally, I feel like banking transactions are a little more private than that, yet they are not afforded the same legal protection. With the recent advent of Mint, Wesabe, Cake, etc, our member’s information is getting spread all over the web and we to be very aware of how this info is being consumed. It would also be a good idea to ensure your branch staff are relatively tight-lipped about the info they give out.
When I’m bored, I randomly snoop through 5300 data to find interesting things. If you go through the list, you’d be really surprised what you can find. Namely, no pun intended, the names of the CEO’s. They all seem like "old" names. Yes, that’s a gross generalization, but Kenneth, Millard, Wendell, Gerald, and Richard all strike me as older names. I looked around on the internet for a source to find the average age of a name. Something like the average Marjorie (thanks grandma) is 71 and the average Ellie is 15 but had no luck. Just my random observation for the week. I wonder if you could gauge a CEO’s propensity for retirement by their name…
There were a few Doug’s, Ron’s, and even a Brent, but I tried to avoid names of people I know…
The New Zealand Police department recently created a wiki that their constituents could edit and help form an upcoming bill.
"The Police Act Review has maintained an open process throughout, and wiki technology offers a novel way for people to have a say in the law-drafting process as well. This may well be one of the first pieces of legislation ever developed in New Zealand with the aid of such an online tool … "
What a phenomenal idea! All of the presidential candidates are using social media now, but this brings a entirely new opportunity for democracy. Writing a new bill is overly complex, time consuming, and expensive. Sounds suspiciously like developing a new product at a credit union!
It seems to me that, as a cooperative, CU’s would be the perfect place to perfect Web 2.0 collaborative tools with our membership. We’ve heard talk of Amazon style reviews on CU product pages. Some are dipping their toes in blogging. Other’s don’t even have web pages. But what would happen if you opened up a wiki or a Dell IdeaStorm-esce extension on your site? Would your members respond? Would only the vocal majority show up? Horror of all horrors, would they just demand better rates and lower fees?
Yup you read the title right. Free blogs. But wait, you can get free blogs just about anywhere you say. While that it true, I’ve grown slightly tired of seeing credit unions attempting to get into blogging using free tools like Blogger or wordpress.com. While both provide some basic functionality, neither are flexible enough to make great looking or feature-rich blogs.
I have setup cublogs.org to address just this issue. Powered by WordPressMu, the multiple blog engine that wordpress.com is based on, anyone can sign-up instantly for a personal blog or a credit union blog. One of the major differences between cublogs.org and wordpress.com is the ability to use plugins and have complete control of theme files of your site. And obviously, there isn’t any software or servers for you to manage!
If you are a teller or the VP of Marketing and have been wanting to setup a blog about your CU, the CU industry, or just a personal blog, stop by and set on up. Play around it with it for a while and see if you like it!
I’m always looking for feedback, so comment on an article or drop me a line on the Contact page. And if you are one of the 3000 or so CU’s without a homepage, drop me a line. I would love the opportunity to help out any CU setup a free website!