CUES Skybox

For Most Americans, Convenience Trumps Better Rates and Fees

By Christian Mullins

Last month on CUES Skybox, Shari Storm made a brief yet effective statement regarding the credit union industry’s obsession with total market share. In short, she opined that there is no surefire correlation between size and long-term success. It was a small part of a larger conversation, but it was a reminder that credit unions remain a small, yet significant, alternative when selecting a financial institution. 

Credit unions, on average, offer more favorable savings and lending rates and lower and/or fewer fees. These results are widely available in news publications, as well as on the Internet, for anyone looking to maximize their banking dollar. But this knowledge hasn’t translated to results. For many Americans, location continues to be the deciding factor when selecting a financial institution, leaving credit unions an inconvenient choice in many markets. 

Currently, America’s almost 8,000 credit unions claim about 90 million members. This represents just over 29 percent of the United States’ estimated population in 2008, assuming that every member is an individual (which they aren’t) and there are no duplicates (which there are). Credit union membership growth rates do exceed that of the nation’s population, but even with generous statistical massaging, national membership penetration will likely hover around 32 percent in 2020. 

The reason for this is simple: At the end of 2008, bank branches outnumbered credit union branches almost 5:1. Potential and even current members cannot help but notice the potential benefit of having a banking option near home as well as work. While credit unions may retort that online and mobile banking deemphasize the need for brick and mortar, the proof is in the pudding; when everything else is similar, location, and the convenience that comes with it, is the differentiator. Sometimes this favors credit unions, but most of the time it does not. Someday, shared branching may level the brick-and-mortar playing field, but that will likely require a standardization of primary signage at every location, a rebranding effort that will meet with widespread resistance.

There is one positive that can be inferred from all of this--members who cannot list convenience as the reason for banking with you want to be there. They are your core members, the foundation from which you will build future growth, and their belief trumps location; they won’t jump to another financial institution as soon as it’s convenient to do so. There is still a corner of the financial institution industry that enjoys brand loyalty, and credit unions are fortunate to occupy much of it.

Christian Mullins is a strategic analyst for the credit union industry and author of the CU Potential Blog.

Also read "Competitive Differentiation: From 'as is' to 'Will Be' 

What Not to Cut in Down Economic Times

By Lisa Hochgraf

As a CU land magazine editor in this tough fiscal year, I've been reading and hearing a lot about what to cut from a credit union's budget--and, perhaps more importantly, what not to.

For example, I got some great insights from interviewing Mike Neill, CSE, when researching Stay in Motion, the cover story of this month's issue of Credit Union Management. It talks about how now is no time to stop acting strategically lest it be hard to get competitive momentum again when the economy springs back.

President of MNA Associates Consulting, Atlanta, and CUES' partner in ServiStar, Mike suggested that credit unions' budget cuts--especially as they affect staff--need to be balanced with a continued drive for excellence, and real discussion about a CU's plan for continued growth and vitality.

Enter my catch-up reading. In the May 27 issue of CU Times, I found Bob Dorsa's editorial, "Penny-Wise, but Pound-Foolish: The Importance of Meetings and Conferences." And I couldn't agree more with Bob's assertion that CU leaders need to keep up their commitment to attending professional development events--including national meetings--even while budgets are tight.

Said in Mike Neill terms, attending top-notch learning events now, while times are tight, will be a key part of a CU's effort to support having plans and skills in place that will pay off when the market starts cooking again.

Bob, a longtime CU industry innovator and now president of the American Credit Union Mortgage Association, describes in his editorial some of the differences between destination meetings and in-house training.

"First, when you are outside the office in another city attending a meeting or a conference, you hear great speakers from all walks of life, subject-matter experts you usually do not have a chance to meet at home ...

"Next, the level and intensity of a professional business conversation is different when it's conducted during lunch or social settings rather than in a meeting room ...

"Another important factor derived from on-site conferences and meetings is that you get to network with people from all over the country or sometimes even the world."

There's more, but you get the idea.

Bob has been coordinating meetings in the CU industry for more than 20 years. And CUES has been organizing meetings twice as long as that. So promoting the idea that professional development shouldn't be cut completely as budgets tighten is definitely self-serving for both Bob and me. But providing the best possible learning programs is also an effort to serve our members well, keep them nimble, help them thrive. 

In his article, Bob suggests that meeting planners and association execs need to always strive to raise the bar on coordinating meeting destinations, topics, and speakers. He suggests even looking for ways to combine our efforts based on the fact that we all market to a relatively small universe of players.

I say amen to that and give a hat tip to CUES' efforts to make continuing professional development a reality for as many CU leaders as possible:

• "Pay what you can" allows CU leaders wanting to attend eligible events to waive regular registration fees and pay what they can to attend. This started with CEO Network last year (now called CEO/Executive Team Network) and continues with several events this year.

• The CUES Experience Webinar series is bringing a tremendous number of wonderful conference sessions to CU executives' desktops, eliminating travel costs. (Free coverage of five of the sessions is available: Data Security in a Budget Crunch, Closing Branches is Counter-Productive, Redefining Convenience, Finding a Portal to Operational Agility, Inside Marketing: Unexpected Ways to Improve Your Web Site)

• Originally planned to be held in Spain, DLI: Strategic Planning is moving stateside, with more details to come. 
  

• CUES and CUES Director members have always gotten a discount on event registrations. For 2010 membership renewals, each voting executive member additionally will receive a complimentary 2010 CUES membership for a non-member executive to be used by Jan. 31, 2010. In turn, each director member will receive upon renewal a complimentary 2010 CUES Director Membership for a non-member director to be used by Dec. 31, 2010.   

I've already run on too long--but clearly I believe in the mission of the company I work for. And I believe the vast majority of CUs can keep learning during these times without spending excessively. 

I say cut away, trim the budget if you need to, but also keep in mind that continuing to learn can pave the way for success in brighter times.

Are you Beating Down Your Next-Gen Leaders?

By Tim McAlpine

I have been working with credit unions for 17 years now, but up until the advent of the social Web, I had never felt the real power of the cooperative movement: collaboration and sharing.

But since getting interested in social media and its potential for marketing and communications about four years ago, I have met a bunch of like-minded, enthusiastic credit union advocates hanging out on line. The emergence of the credit union blogosphere has given rise to a new-found cooperative renaissance with a growing group of credit union people freely expressing their ideas and beliefs on line. This band of credit union employees, vendors, consultants, a few executives and even board members has been engaged in fantastic discussions surrounding the relevance and sustainability of the cooperative credit union movement. There has been a palpable sense that we can all change the world together.

Twitter has largely taken over as the epicenter of this highly connected online crew. It acts as a conduit to deeper discussions that continue to take place on dozens of active credit union industry blogs. The people are smart and engaged and the spirit in these environments is positive and encouraging.

However, over the past 18 months I have noticed the tone slowly changing, both on line and in the personal one-on-one conversations I have had with this motley crew. There is less hope and passion. This shift has been especially apparent within the 20- to 35-year-old credit union employees whom I have had the chance to get to know. Yes, this time frame does parallel the downward spiral of the economy, but I believe it has more to do with vision and leadership than money.

I get the sense that these emerging leaders are slowly being beaten into submission and may walk  away from the credit union movement. Or if they do hang around, it will be for the paycheck and not the belief that they can change the world.

I am seeing two main categories of frustration:

1) The held-hostage-by-IT beat-down

Tim says, "Hey, how's that project you were telling me about going?"

Credit union employee says, "I've given up on it. I need IT's help, so forget it."

In 2009, marketing and technology are inseparable; however, within today's credit union org chart, marketing and technology are completely separate. This is a big problem. Credit union marketers come up with wonderful ideas that undoubtably have an online component. These ideas typically require the assistance of the IT department to execute. The IT managers balk because these ideas have perceived security risks to the credit union's network, the technology requirements don't comply with their chosen environment or there are not enough resources to execute the idea. To IT's defense, most marketers lack an in-depth understanding of the technical requirements of their big ideas and typically only bring IT in at the last second.

These turf wars have been heightened with the dawning of the social web. Marketers want access to sites like YouTube, Facebook, Twitter and Flickr to help execute their big ideas and to connect with members and potential members. IT wants nothing to do with these potential headaches. Their mission is to protect the banking system, e-mail and the internal network. This tension creates an environment filled with animosity and roadblocks.

What's the solution? Blow up the structure. Integrate IT and marketing together. Call this e-commerce if you like. Marketers need to learn more about technology and IT folks need to better understand marketing. At the core of many struggles between IT and marketing is IT's unrelenting Microsoft-and-nothing-else mentality. In an ideal world, IT should be technology agnostic and consider Windows, Mac OSX and Linux with an open mind and select the best solution for the task at hand. An allegiance to a single platform is short-sighted and is not in tune with today's interoperable world. On the other side, the dreamers in marketing should get tech smart and also understand that bad mouthing the IT gatekeepers isn't really going to get them anywhere!

2) The old-people-at-my-credit-union-don't-get-it beat-down

Tim says, "Hey, how's that project you were telling me about going?"

Credit union employee says, "Screw it. The old people in charge at my credit union will never do anything new. They're just waiting it out until retirement."

Within the credit union blogosphere there is constant talk about blogging, social networks, online account opening, mobile banking, iPhone apps, Facebook, Twitter, user-generated content, social media marketing, online personal financial management tools, alternative payments, P2P lending and on and on. Everyone is so fired up about the potential to better serve and connect with members and potential members through these new channels.

Can you imagine the frustration the young professionals at your credit union feel when they pitch ideas to their superiors only to be met with strange looks, disinterest and no support? This is essentially the message being sent, "We are not interested in trying anything new. We will never be an early adopter. What makes you think we would ever do anything like this? You just need to do the job you are paid to do and stop wasting company time daydreaming."

What's the solution? If you are in a management position at your credit union you need to embrace and support new ideas and you need to empower your dreamers to execute their ideas. You need to understand that technology is changing every industry. Apple launched iTunes five years ago and it is now the No. 1 music retailer. The record industry didn't see that coming. Google was founded only a decade ago and it now owns 75 percent of the search space and is the most powerful force on the Internet. Microsoft did not see that coming. Come to think of it, IBM probably didn't see Microsoft coming 30 years ago either!

The newspaper business is in ruins. Craig's List has killed the classifieds, and blogs and online news sources have stolen all the traditional ad revenue from the once-powerful newspapers. One by one, old business models are being dismantled. Yet, even in all of this recent upheaval, the banking industry remains relatively unchanged. It is ripe for reinvention.

Google gives each of its employees one day per week to work on new ideas. That's 20 percent of their time to think up new stuff. To "waste" company time. A policy like that would surely bring the hope and passion back. Finely tuned business cases and the status quo have their place, but you need to try something new and take some calculated risks.

There is an army of next-gen credit union leaders in your midst looking for the chance to change the world. Will you give it to them or will you continue to beat them into conformity? The choice is yours.

Tim McAlpine has been a credit union member for over 15 years and is president and creative director of Currency Marketing. Tim is a passionate credit union advocate best known for developing the Young & Free Program that credit unions from around North America are utilizing to connect with new Generation Y members. Make sure to subscribe to Tim's blog and to follow Tim on Twitter!

Web 2.0: Not Just for Marketing

By Brad Garland

I'm lucky enough to get to speak about Web 2.0 across the country and at the beginning of my talks I like to establish which employee roles are represented in the crowd. More often than not, the majority of people are from marketing. Most have the same story: They have been tasked by their bosses to find out what this whole Web 2.0 thing is about and are trying to figure out what technology they need to best engage their members. I respond with two key points:

1. Technology is not the answer; you need a strategy that ties back to business goals first, and
2. The marketing department is not the only part of the institution that can benefit. There are enormous opportunities and efficiencies to be able to better collaborate inside the organization as well.

Often, credit unions approach Web 2.0 as collaboration with their members only. They tend to forget about the potential productivity and resource-saving benefits of leveraging the same technologies inside. Our company has been using these technologies for quite some time--not because they are the latest trends in technology, but because we have a business case for them.

The Garland Group is team of 15 people. Our individual e-mail loads were becoming unwieldy, more because of internal communication than customer inquiries. We also saw that key personnel were being left out of e-mail loops related to critical decisions, which slowed our production efforts. Something had to change.

Although most of us were comfortable with e-mail, we quickly realized that the best way to improve  communication was through a single, Web-enabled system that enhances collaboration. We developed a program, SocialStratus, to help improve processes. SocialStratus, coupled with Web-based CRM, allows all communication to be centralized and fully searchable so we can reference earlier projects and conversations. The enhanced communication increases cross-company awareness of our projects and fosters an open and transparent company culture.

There is no question that having a strategy for collaborating with your members is becoming a requirement these days, but I would argue that the first step in fostering communication with your members is a more conducive collaborative environment for your employees. 

Brad Garland is founder of the community site Banktastic.com and CEO of The Garland Group, Wylie, Texas.

Hey, Oprah, Twitter may be all the Rage but Credit Unions are Cool Too!

I've been reading the CUES Skybox for the last couple of years and I know that some pretty heavy-duty topics are discussed here. That's why I've decided to take on the hard-hitting subject of Twitter and Oprah!

Oprah started tweeting on Friday, April 17. In case you've been living under a rock, Twitter is a free social networking and micro-blogging service that enables its members to send and read other members' updates known as tweets. Tweets are text-based posts of up to 140 characters in length which are displayed on the member's profile page and delivered to other members who have subscribed to them (known as followers).

I have been a member since May 2007 and up until recently it's been a pretty niche network mainly filled with social media early adopters. I enjoy it because I can regularly connect with a group of about 50 or so progressive credit union advocates in real-time.

This isn't a post about why your credit union should or should not have a presence on Twitter; it's a post trying to understand how a company with less than 30 employees and no real business plan or revenue stream has captured the world's attention and has individuals, celebrities and businesses falling over themselves to join. How did Twitter go from zero to Oprah in just over three years since it was founded? What can individual credit unions learn from this free Internet micro-blogging service that has gained 19 million world-wide members without spending a penny on marketing?

First some Twitter background. Along with the plain old early adopters like me, there were many tech luminaries on the scene early. People like Leo Laporte and Kevin Rose were battling it out to be the most followed. In the beginning, 25,000 followers was considered unreachable.

Then the politicians arrived. When Barack Obama reached 100,000 followers, the mainstream media began to take notice. Traditional media outlets followed suit with the NY Times and Time Magazine establishing large followings.

Finally, the celebrities arrived. I first noticed Shaquille O'Neal and then Lance Armstrong, Britney Spears and Ellen DeGeneres among others showed up on the scene. Things really heated up within the past month, when actor Ashton Kutcher challenged CNN Breaking News to see who could be the first to achieve a million followers. Ashton reached the milestone on Thursday, April 16 And on the following Friday, he appeared on The Oprah Show.

Leading up to this appearance, there was so much hype about Oprah's impending first tweet! Sure enough, Oprah tweeted during the taping of her show Friday and in the following week more than 600,000 people followed the most influential woman on the planet. She is sure to become the most followed person on Twitter in a matter of weeks. Oprah's opinion and influence are undeniable. It is rumored that more than two million new users have joined Twitter in the week since Oprah joined.

This may seem like a very random unrelated story, but I think there is plenty that individual credit unions can learn from Twitter's meteoric rise in popularity.

1. Twitter has a very simple offering that you can't find anywhere else. I would compare MySpace and Facebook to the big banks. They offer the full gamut of features and service including friend mail, videos, photos, music and hundreds of third-party applications. The founders of Twitter saw a hole in the social media space and pioneered micro-blogging—the novel concept of short messages in real-time. Many credit unions look and feel like smaller versions of banks and try to go head to head by offering the same full suite of products and services. What if you took a different approach and developed something brand new that filled a hole in your market? And what if you did that one thing really well? I bet that would get people talking and joining!
    
2. Twitter has embraced collaboration. At under 30 employees, Twitter can't develop everything the community is asking for, so instead it has created the Twitter API (application programming interface). This API allows independent software developers to write complementary applications. At the time of writing, Twitdom—a directory of Twitter apps—lists more than 700 third-party Twitter applications! Credit unions have embraced collaboration through the widespread proliferation of CUSOs, but they could definitely be doing more to work together to advance their use of technology.
    
3. Twitter connects its members. Credit unions are founded on the concept of empowering a local community of like-minded people, but do credit union members really feel connected to one another? I would argue that credit unions have lost the sense of connection that they once had with their members, and their members no longer know one another. In contrast, people are so passionate and fired up about Twitter that they have spread the word about it like wildfire. There are spontaneous events called Tweet-ups—in-person gatherings of Twitter members—that now happen regularly around the globe. What could you be doing to create more of a sense of community and connectedness among your membership? How are you showing your members they are appreciated, and what are you doing to arm your members with the ability to refer others? Twitter has proved that empowering members to grow a community is infinitely more effective than advertising.
    
4. Twitter has removed all barriers to entry. Credit unions are too hard to join. Two things that are really slowing down new member acquistion: outdated, in-person, paper-based sign-up procedures and the perception that you have to be in a union or be an employee of a sponsor company to join. In contrast, Twitter has a dead-simple sign-up procedure—after a few clicks, you are up and tweeting! The tools exist today for your credit union to offer online account opening and funding and most credit unions' fields of membership have grown to be more inclusive. You need to remove the barriers to join and let your existing members know how easy it is to refer their friends and family.

Granted, Oprah is unlikely to come in the door of your credit union to open an account, but I believe that with a few simple changes, a number of new members will! I've listed four things credit unions can learn from Twitter and I'm sure there are plenty more. Please add your thoughts in the comments.

Tim McAlpine has been a credit union member for over 15 years and is president and creative director of Currency Marketing. Tim is a passionate credit union advocate best known for developing the Young & Free Program that credit unions from around North America are utilizing to connect with new Generation Y members. Make sure to subscribe to Tim's blog and to follow Tim on Twitter!

Seasons of Change

By Deedee Myers

With bad news all around us, and never-before-seen events like corporate stabilization hitting from every direction, it wouldn't be surprising if credit union leaders were feeling a little down.

But exemplary leadership requires that we pay attention to how we manage ourselves and shift within a changing environment. Change can be internally driven or externally forced upon us, as in the current economy. How we react to change is critically important to a successful outcome or even minimum survival.

One of the most important distinctions to remember is that we have a choice regarding our reaction to change.

During a workshop I presented at CUES' Execu/Summit, the first week of March, I introduced a reality version of a model of change called the Seasons of Organization. The seasons are modeled after our natural seasons of spring, summer, autumn and winter. This model is also one of 14 chapters in an upcoming book, GPS for Success, featuring Steven Covey.

Change is a natural process, a natural cycle. Just as the seasons of the year cycle, we each cycle through change.

Each of us, in a team or an organization, responds uniquely to change and, yet, we need to be on the same path toward our strategic vision and desired outcome. The seasons, in language for organizational leadership, are:

Spring: Exploring New Commitments

Summer: Making and Keeping Commitments

Autumn: Completing Commitments

Winter: Exploring Commitments

During Execu/Summit, participants responded to this question:

In what season do you see the credit union industry as a result of the current economy?

The group stood evenly divided between autumn and winter. Those representing the autumn part of the seasons floor map spoke about being uncertain, apprehensive and unsure of the impact of or how to react to the current economy. The winter participants mentioned being reflective, and the industry being vulnerable, protective and discerning.

The next question was about the season of participants' own credit unions. Looking at their individual situations, the leaders answered quite differently:

Spring: 17%

Summer: 24%

Autumn: 21%

Winter: 38%

Participants who said their credits unions are in spring and summer—41 percent of the total group—spoke with optimism about exploring new possibilities, evaluating different business models, moving with a sense of urgency toward the future and being resourceful in unprecedented ways.

It was a different mood for those in winter and autumn, which at 59 percent represented the majority of the group. Some were highly concerned about external decisions impacting the economic viability of their credit union, others were feeling protective, and some spoke about being in a holding position while others were contracting in their resource and financial allocations.

There is no "right" or "wrong" season. How we each respond to change, in a particular moment, is based upon where we might be in our lives, our current dominant mood, our capacity for resilience and other factors, such as being on purpose and feeling as if we make a difference.

As the day shifted into the afternoon, the group was open and direct with questions, comments and curiosity about how to effectively lead a diverse group of individuals in various seasons at the same time. For example, what if the CEO is in winter, the management team in summer and the board in autumn?

This is the everyday scenario where exemplary leadership is needed and a requisite every day. Deep listening and the ability to be effective in generative conversation are so important in these times. The quality of relationship is directly correlated to the quality of conversation. When the conversations are open, generative and direct, the outcomes are positive and full of possibility. Teams that learn how to have quality conversation are better able to problem solve in the midst of change and chaos.

The last practice was especially meaningful. Each person wrote—and you can do this too—their own commitment to values they will live by as an exemplary leader and what observable behaviors will be obvious to others as they cycle in the change we are all experiencing.

We closed with a request for each of us to ask ourselves everyday: Am I living as an exemplary leader?

Deedee Myers, Leadership Coach

Deedee Myers is CEO of DDJ Myers Ltd., Phoenix, and an author of CUES' Succession Planning Essentials.

Read another post from Execu/Summit.

My Hope for 2009

By Gary Easterling, CCE

In an earlier post, "Main Street in Crisis–The Credit Union Difference," I shared an action plan for capitalizing on our difference from other financial institutions and coming together to help members and the economy out of this recession, while at the same time building market share and gaining expanded powers from our regulators. As we begin this new year, I see even greater urgency for CU leaders to take action, to build on—maybe even preserve—our credit union difference.

What is the CU difference? It is our ownership structure that drives credit union profits back to the consumers they serve.

It is our governance structure of unpaid volunteers who focus on the long-term benefits of the credit union cooperative rather than near-term return for the board and shareholders. It is our focus on Main Street need rather than Wall Street greed.

What is our response for 2009? Our voice must be consistent if we are to preserve the credit union value option. Our message must be focused as we address increased regulatory burden from NCUA and Congressional action. Our vision must be clear as we honestly address the challenges in financial services and within the credit union movement.

Our voice should shout out, "Let every citizen have the option of credit union value. The credit union value proposition can help stimulate our economy." Seeking increased latitude in field of membership is a means to bring credit union value to more people.

Our message should declare, "Legislative and regulatory responses must focus on those who were motivated by greed." Regulation is most needed where profit-motive exists. To borrow a phrase from Bob Barbera, chief economist for ITG, "The invisible hand of capitalism is not infallible." The asset bubble that burst was inflated with profit-motivated greed without an eye toward risk, safety and soundness.

Increased regulation for those who want to play dangerously is appropriate; but throwing another web of regulatory compliance across the entire industry is counter-productive. We need to assist our policy makers in surgical precision rather than mass prescription as they search for solutions.

Our vision should acknowledge, "We have collateral damage in our industry and we will have casualties." We must avoid the temptation to weaken the strong in an attempt to strengthen the weak. Every economic downturn creates casualties.

From my vantage point, most struggling credit unions are victims of asset devaluation. Many are looking to partner with stronger credit unions to preserve the franchise; however current rules and regulations create barriers to voluntary partnerships, unless the struggling franchise is in imminent danger of failure. Our industry needs to promote mergers and consolidation to allow franchises with synergies to come together to preserve the franchise value for the members.

What is my hope for 2009?

I hope our industry can respond to its specific needs without following the for-profit solution set. Preserving the number of credit unions is not a victory, if the credit unions being preserved are on taxpayer life support. Seeking bailout money places the tax-exempt argument at risk, blurs the line of distinction between the for-profit and not-for-profit sector, and accelerates Treasury's "Blueprint for a Modernized Financial Regulatory Structure," which calls for one financial institution regulator and insurance fund.

The New Year will bring change. Our leadership will determine what kind of industry, if any, the credit union movement will be in 2010. Our focus must be on the value proposition to the members we serve, even if it means the franchise changes. If we lose our focus on the member-owner, there is no credit union difference to preserve.

Gary Easterling, CCE, a CUES member, is president/CEO of $845 million United Federal Credit Union, St. Joseph, Mich.

Read another post by Gary.

CU Goes ‘Bowling’

By Ron Jooss

Last week, I was maintaining my usual level of Sunday afternoon productivity watching football. As I did a bit of channel surfing I came across a college bowl preview show. On the crawler at the bottom of the screen I saw a match-up for the San Diego County Credit Union Poinsettia Bowl. "Wow," I said to my wife, "There's a credit union that's sponsoring a bowl game." Then, the next day at work I heard one of my co-workers say to another colleague, "Hey, I saw a credit union is sponsoring one of the bowl games."

The words "credit union" and "bowl game" don't typically go together. Bowl games sponsorships are usually reserved for the big boys. You've got the Sheraton Hawaii Bowl, the Tostitos Fiesta Bowl, the AT&T Cotton Bowl, the Rose Bowl Game Presented by Citi … You get the picture.

I know: We are overwhelmed with less-than meaningful bowl games this time of year. But like it or not, those sponsorships give companies peace of mind with consumers. And most folks have plenty of downtime during the holidays, so they tune into those games. The sponsorships wouldn't be worth it for companies if they didn't pull in viewers.

Give $4 billion San Diego County CU credit for stepping up—on behalf of all credit unions. As banks and other financial services suppliers struggle to maintain their credibility, this is a time of opportunity for credit unions to increase their visibility. Maybe other credit unions—and the movement collectively—should look at big-ticket sponsorship opportunities.

Ron Jooss edits the General Management and Board sections of CUES' Credit Union Management.

Walking the Talk

By Mary Arnold

Earlier this week the Michigan Credit Union League announced a $10 billion "Invest in America" program designed to help consumers afford new cars, while at the same time helping General Motors cut its inventories. This is a shining example of how credit unions, working together, can impact not just their individual members but the American economy. In fact, it sounds like just what Gary Easterling, CCE, was thinking of when he wrote "Main Street in Crisis: The Credit Union Difference."

According to the league, Invest in America is "a partnership between General Motors and 1,200 Midwest credit unions [that] will offer credit union members supplier pricing on new vehicles and make $10 billion in auto loans available." The program is open to members in Michigan, Illinois, Indiana and Ohio--now through June of 2009. Credit unions in those states can send their members to LoveMyCreditUnion.org for more information.

In a visit to this site, I learned that through Jan. 9 members can save an extra $250, that "in most cases, you can combine current incentives and GM reward card earnings, and that there's "no haggling with salespeople, no having to go from dealer to dealer. Just click on Credit Union Discount From GM button to get cruising in your new car."

The pilot could be expanded to other states, and Chrysler and Ford have also been invited to participate. The program is being coordinated by Michigan league affiliate CUCorp in coordination with the four state trade associations and CUNA.

I'm currently shopping for a new car. Wish I could get in on the action, especially the not having to go from dealer to dealer part!

CU HARP: Will it Play?

By Mary Arnold

Since I left this comment on Friday about the Member Mortgage Relief Initiative, which a group of credit unions proposed to NCUA, the agency looks like it is serious about backing it. In a press release yesterday, "NCUA unveiled a new initiative aimed at assisting credit union members who are experiencing mortgage-related financial difficulties to preserve their homeownership.

"The Credit Union Homeowners Affordability Relief Program (CU HARP) would enable NCUA, through the Central Liquidity Facility, to work with credit unions and their members in temporarily lowering monthly mortgage payments. The CLF would provide credit unions with funds borrowed from the Department of Treasury at lower rates than otherwise available through private sources. In turn credit unions would pass the entire rate reduction to struggling low- and moderate-income borrowers. The credit union, in exchange for the reduced likelihood of borrower default on the mortgage, would also match the rate break, doubling the benefit to struggling homeowners." 

“My principal reason for advancing CU HARP is simple: The consumer must not be left out of the broader government efforts to mitigate the housing and credit market dislocations,” stated Chairman Fryzel. “CU HARP is an effort to foster a solution whereby the NCUA and credit unions work together to assist distressed borrowers.  It represents what I believe to be an innovative and practical use of federal homeowner assistance that will also benefit credit unions and the market. At the same time, the standards and requirements for CU HARP participation will be stringent and will enable NCUA to be responsible stewards of any public funds used. CU HARP will be a ‘win-win’ for all involved.”

As part of that win-win, the plan involves no spending of taxpayer dollars, something CUs can continue to feel good about. "CLF loans are made to credit unions on a fully-secured basis, and all advances received by the CLF will be repaid to the Federal Financing Bank (an arm of Treasury) with interest," the release explains.

NCUA's announcement comes on the heels of last week's change to the bailout plan, which eliminated CUs' possible use of TARP funding. Though, theoretically, being eligible for TARP placed credit unions on "equal footing" with the rest of the financial industry, most credit unions are already on higher ground, thank you very much, and eager to help their members--not to obtain taxpayer assistance.

To go forward, CU HARP must be approved by the NCUA Board, as well as the Treasury Department and the Board of Governors of the Federal Reserve, according to NCUA's release.

Initial funding would be $2 billion. What do you think? Does this have legs?

Mary Arnold is VP/publications for CUES.