A Lesson in Relativity From Pollyanna
I typically take a glass-half-full, look-on-the-bright-side attitude. Even when situations stink--like putting together two large magazines two weeks in a row--I try not to get overwhelmed and just know it will get done.
It may be this Pollyanna disposition that has me curious why everyone is so nervous about the current economic climate. Sure, the squeeze isn't very comfortable, but I think the key thing for credit unions right now, and others as well, is stick to their roots. Do what you know and don't go crazy chasing numbers that are unrealistic in the current economic environment. Case in point: Norlarco Credit Union. And look where that got them.
Certainly money makes the world go round, and you only have so much to spend. Credit unions have a fiduciary duty to their members as serious, if not more serious, than that of for-profit entities to their stakeholders. However, choosing the correct sacrifices can be tricky. It wouldn't make sense, for example, for Credit Union Times to stop running ads to save on paper costs.
Likewise credit unions should not stop lending and in fact it appears they have not. Credit unions had capitalized on the current environment by increasing their share of the mortgage lending market from 2.0% to 3.5%.
Sure, the overall delinquency ratio among credit unions has increased to 0.93% as of year-end 2007, but that's still a ratio the banks can only hope for considering their 1.39% ratio. And consider the dollar differences here too. If credit unions maintain roughly 6% of the financial services arena, the actual dollars multiply exponentially. It's all relative.
The corporates have been particularly touchy. The ratings warnings are obviously not the best thing that could happen, but, practically speaking, how bad is it? Even the ratings agencies, comparatively speaking, don't seem that worried about the corporates' position. None of them have actually been downgraded, yet even U.S. Central, which typically allows its member corporates to take the limelight, came out of the PR woodworks to assure the credit union industry of their strong capital and liquidity position.
Compared to all the hedge funds and investment funds and mortgage lenders that have failed or been bailed out, it seems a mere blemish. Probably it's a preventative measure to prevent panic among the natural person credit unions that might be concerned the corporate system could meet the same fate. Providing education without going so far as to induce concern will be the key here. It's all relative.
At Credit Union Times we'll hear the occasional complaint that the same credit unions are written about. There are reasons for that: Either they really do make news, they have good PR machines, or both. Take for instance, SECU of North Carolina.
Yes, SECU is the second largest credit union in the country at nearly $16 billion in assets, so, often what it does and says is influential. It also has a charismatic CEO in Jim Blaine, whether you agree with him or not. The credit union has a good working relationship with our reporters, and it also makes news. SECU is investing $1.1 billion in education across the state of North Carolina. SECU lives the credit union philosophy.
Not every credit union can invest that kind of money, but, it's all relative. If a $100 million credit union were to invest approximately $16 million into a great project like this, that's news too. And it only takes a call to introduce yourself as a resource and pitch story ideas. The return on that 30 minute phone call to Credit Union Times or your local newspaper can yield big returns with a mention in a larger story or even a feature.
The publicity is good, but it's all in what you want. It's all relative.
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