UNIVERSAL CITY, Texas-The multi-taskers at Randolph-Brooks FCU have their hands full these days; and they couldn't be happier. The 46-year old credit union that emerged from the Brooks Air Force Base has become a $1.2 billion financial institution that serves some 164,000 members. They made their success the old fashioned way, said Randy Smith, the CU's president- through consumer lending and solid member service- but that's just about the last thing they'll do the old-fashioned way. The new business paradigm has met the old credit union philosophy, and now RBFCU is ready to make money the new-fashioned way, but with a CU twist. One of the last billion-dollar CUs that hadn't formed a CUSO (credit union service organization) Smith explained that yes, he came late to the party, but it's better to be late than let the good times pass you by. They will make up for lost time by doing it right: by not having to undo, redo or make-do with plans and strategies that are formulated in a hurry and have to be jury-rigged later on. "Sometimes we may take too long to make decisions on new programs and products," said Smith (they just now implemented a debit card program). "But I've also seen credit unions that have formed CUSOs and didn't really know what they wanted to do with them. Sometimes, they get into things too soon, and they pay a price for that." Smith isn't just referring to start-up costs and personnel expenditures, either. He means when a thing falls flat on its promise and disappoints members, the resulting bad word-of-mouth can take almost forever to overcome. So he's unapologetic about taking a long time (years, in fact) to form a CUSO. But the driving force is that paradigm; that credo that credit union members are out there not waiting, and if their CUs don't offer up what they want, they will have to go elsewhere. Rather than letting competitive ear driving the machine (although it may be an element to any tech-driven business plan) the braintrust at RBFCU chose to meld the tried and true with the hip. In forming Randolph-Brooks Services Group, the wholly-owned CUSO, they are meeting a challenge they set for themselves, as that has always been their best benchmark, said Smith. "I've seen how others have done it and I always thought we could do it better, faster, cheaper," he said. The `tried and true' element comes from CUNA Mutual Insurance Group, as the CUSO will continue to market the mutual fund products and financial planning services of Members Financial Services, and the `hip' comes from the excitement the planners express about the importance this venture has to the CU's future. "Most credit union planning is, `how do we get through the next six months?' and some don't see any sense in looking past two years," reflected Smith. "And while we can't presume to know what the world will look like in five or 10 years, I see these young kids today and I have to wonder about the future of credit unions. We need to market relevant services to the next generation even while we service their parents' needs." "We've been lucky. Our revenue is solid. But I look around and see the consolidation in the financial sector and I know we can't survive on our present offerings alone. You can't make it forever on auto loans and other consumer lending. We need other revenue streams," said Smith. That revenue stream will come from marketing insurance products like long-term healthcare, auto and homeowners and the full-range of stocks, bonds and mutual fund investments the CUSO will offer, said Jimmy Junkin, senior VP of finance. These products bridge the interests of Baby Boomers and their Gen-X children. And the CUSO would bring members to the one-stop shop, credit union style. "I know change takes time, but we in credit unions don't make it easy enough for new ideas to go from concept to completion," he said. Junkin is on the CUSO board, along with Brooks, Ron Barrett, SVP of consumer lending, John Kelly, SVP of marketing and Roger Zearfoss, SVP of mortgage lending. He's been a promoter of the CUSO idea for a long time. Junkin warned that while speed is now important, they aren't writing that new paradigm plan just yet, and with good reason. They need a CEO before a business plan is written. "Why tie a CEO to a plan he (or she?) had no opportunity to contribute to? "A candidate list is whittled now to only two or three, and a selection is imminent, he said. They avoided making a mistake like having a plan the chosen CEO might not love by changing the way they think. (That's the hip part, too.) But they came to that knowledge the old way, by seeking out experts who taught them what they had learned by trial and error. "We went to a CUNA seminar on CUSOs in New Orleans, and there we met Bob Dorsa (president of NACUSO) and Guy Messick (NACUSO attorney) and later we hired Bob to consult with us," said Junkin. The three days Dorsa spent with them resulted in formulating the criteria for the CEO position, and that has helped during the interviewing stage. "Oh, the timing is just right," said Junkin. "There's so much unrest in the financial world, people, and I mean our members, will be able to look to us as a reliable source, a trusted source, and the CUSO operations will be completely integrated with the credit union." The first integration will be in transferring the current book of business over to the CUSO. That's $25 million (assets under management). That `integration' mindset, the seeming invisibility of the CUSO and it's meld with the CU, what Junkin referred to as "in sync thinking," is very new-age talk, especially for a traditional CU- one whose board is made up of mostly retired military and civil service personnel. But there's that new paradigm again. "The only difference is legal," Junkin said. "To the members, these services come from the credit union, but that's a double-edged sword. If we don't get it right..." The big claim that CUs have traditionally made is that a credit union does all it does for the sake of members. "That we provide services and products at less cost than taxable entities. We've got to fulfill that promise." Promises made must be kept, he said. And like Smith, Junkin sees the inter-generational pull in the membership. Being ready with a product menu that younger, more tech-cozy members will be expecting to see has to be part of a CU's overall plan. Kelly's four-person marketing department is doing the multi-tasking dance right now, juggling a bunch of new product roll-outs. They will soon start generating the introduction of the CUSO's services throughout RBFCU's 12 branches and its Web site (RBFCU.org). "We're really pumped on this CUSO. We think it's exciting." The plan of attack will be a blend of the old reliable stuff and the new stuff (sound familiar yet?). "We'll do the classic treatment," said Junkin. "We'll promote through the CU newsletter, the Web page, and break it together with in-branch merchandising and the usual point-of-purchase stuff, brochures, and posters. But the idea is not to overwhelm members. My point is that if it's well done, the members will come. We've had great success in the past, and it's true: here, we take our time and get it right." One more thing, Kelly said in closing. "We'll come up with a new name. Randolph-Brooks Services Group? Members will not understand what that means." The new paradigm name search is on. -
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