In today's legislative and economic climate, the credit unionindustry is facing myriad unknowns. The recent passage of theDodd-Frank Wall Street Reform and Consumer Protection Act, with thecreation of the Consumer Financial Protection Bureau, looms largeon our horizon, and many of the implications remain to bedefined.

In addition, we are facing two significant assessments from theNCUA. The first is the already announced Corporate StabilizationFund expense of 13.4 basis points; the second is the assessment toreplenish the National Credit Union Share Insurance Fund, which asof this writing has not been finalized. Both will have asignificant impact on credit unions' bottom lines, and NAFCUcontinues to work diligently with the NCUA to minimize the impactof these two assessments on credit unions. Specifically, NAFCUsuccessfully collaborated with the NCUA to secure legislationallowing the agency to spread the corporate stabilization expensesover seven years, giving credit unions some welcome relief.

Of course, given all these factors, it is not easy to beoptimistic. Nonetheless, I believe that is precisely what isrequired. In order to successfully manage the twists and turns ofthe current business environment, we have to look for theopportunities that our existing challenges provide. As leaders ofour industry, we must embrace change and create a new vision offuture success. Alexander Graham Bell once said, “When one doorcloses, another opens; but we often look so long and so regretfullyupon the closed door that we do not see the one which has openedfor us.” ?Indeed, there are some bright spots in our economy,including:

Corporate profits have been rising to a level not seen since2006.

For the week of Sept. 4, the advance figure for seasonallyadjusted initial claims was 451,000, a decrease of 27,000 from theprevious week's revised figure of 478,000. The four-week movingaverage was 477,750, a decrease of 9,250 from the previous week'srevised average of 487,000.

Consumer spending rose at a 2% annual rate in the secondquarter, slightly higher than the first quarter's 1.9%.

The Institute for Supply Management's factory index rose to athree-month high of 56.3 from 55.5 in July. A reading of more than50 generally signals growth.

From the credit union perspective, we, too, have someencouraging indicators.

Net worth has held stable around 9.9% for the past threequarters and actually inched up slightly in the second quarter fromthe first quarter.

Credit unions are managing expenses more wisely. Net operatingexpenses as a percentage of average assets decreased from 2.985% inJune 2009 to 2.51% in June 2010. Aggregate delinquency andcharge-off ratios inched lower in the second quarter.

Credit unions' return on average assets is up. In the secondquarter, ROA was 0.41% compared with 0.27% for the same period in2009.

Despite a 2.9% decline in the first quarter, unsecured creditcard loans grew 1.7% in the second quarter. Used vehicle loans alsogrew 1.7% in the second quarter.

Additionally, we may also take comfort in the fact that thereare companies that have withstood similar trying times and arefinding an open door with renewed strength and vigor. Starbucks,the coffee retail giant, underwent a major upheaval in 2008. Thoughit required letting go employees and closing locations, todayStarbucks has rebounded thanks to clever reinvention throughcustomer reward programs, free Wi-Fi and a variety of new foods anddrinks. The Ford Motor Co., which had been a bankruptcy candidatewhen car sales dropped dramatically in 2007 and 2008, was the onlycompany of the Big Three automakers to stay out of Chapter 11.Today, Ford has improved market share with a new line of cars andtrucks, and it may become the No. 1 U.S. car company between nowand the beginning of 2011.

I believe we can do the same for the credit union industry. Wecan explore the opportunities to deepen our relationships withexisting credit union members and attract new members withdifferent products and services. Credit unions can pursue newmethods of communication and engagement, including social media,online banking and iPhone applications. Technology has afforded usmany low-cost, high-impact ways of reaching members. In fact, thereare many ways to connect with members. For some credit unions, itmay be the bundling of accounts, others may provide free checkingfor members with direct deposit, and still others may offer a newcredit card program or free financial education programs formembers and nonmembers in the community.

I recognize there are many issues that remain to be resolved,including relief from the member business lending cap, addressingalternative capital needs, the disposition of legacy assets and therestructuring of corporate credit unions. Yet, I believe the keenmanagement skills that have served us well over the years, as wellas our prudent business model, will help us successfully navigatethis winding road and arrive exactly where we want to be.

We must continue to innovate and redefine ourselves to not justsurvive but thrive in this new competitive environment. As NAFCU'snew chair, I welcome the prospect of being part of theseefforts.

Michael N. Lussier is chair of NAFCU andpresident/CEO
of Webster First FCU, Worcester, Mass.
He can be reached at 508-671-5051 or
[email protected]