Time for a Kick in the Pants
Challenges can be turned into opportunities. Look how some credit unions are taking advantage of the banking crisis to get their brands in front of consumers.
But some challenges are just that, challenges. Many you can’t control and just have to deal with one way or another. Others you must decide are better left to die than constantly beating your head against a brick wall.
Interchange is one of those battles worth waging. You can’t give up just because it looks like you’re going to lose. However, there doesn’t seem to be any appetite in the Senate to repeal the Durbin Amendment, particularly since its namesake is the majority whip.
Short story: When I was in middle school, our basketball team was top-ranked. Yet one game we were losing horribly to a team that was not particularly good. At half time our coach, who was always patient as could be and had never yelled at us, came into the locker room and gave us what for. We went out there second half and owned the game. We ended up winning.
Credit unions always have the same people–experts–telling them what to do, whether it’s consultants or columnists or the NCUA. The industry needs a mild-mannered credit union CEO to give it a good, swift kick in the pants on this one.
Certainly there’s a heap of money at stake here, but it’s be far more than that. One billion-dollar credit union CEO expressed concern to me last week that the $2 million the credit union stands to lose in interchange income pales in comparison to the possible loss of member relationships. What if retailers only want to take the larger issuers’ debit cards because they’re cheaper? That debit card is tied to a checking account that very likely has direct deposit and possibly even bill pay tied to it. This is the stickiest relationship a credit union can hope for, and it could be gone in the blink of an eye because a members’ favorite retailer won’t take the smaller issuer’s debit cards.
Of course there is hope that the debit cardholder would boycott the retailer based on that, but that’s not something credit unions should be counting on. As the cliché goes, wish in one hand…. Credit unions are better off trying their darnedest to make things happen.
And now, even consumer groups are realizing that the interchange fee cap that they supported is truly anticonsumer. It seems there must be some way to work this out, and this time credit unions should partner with the consumer groups rather than the big banks.
Another issue that deserves credit union attention, albeit in a much more nuanced way, is examination time. The NCUA has cracked down during its examinations and rightfully so to an extent. But walking the halls of the Governmental Affairs Conference last week, absurdity has reach entirely new levels in some instances. One credit union executive shared that his credit union got a regulatory slap on the wrist because the credit union’s millions of dollars in reserves were over by about a month’s worth of my nine-year-old’s allowance. In another circumstance, a credit union was required to submit a fixed-asset waiver to the agency in order to buy new computers for the executive management team after that was repealed from RegFlex.
Truly there are better things that credit union executives could be spending their time and energy on. Reasonable and well-supported conversation should be able to resolve matters like this. If it doesn’t, credit unions cannot be afraid of taking the issue up the chain of command. If frustrated rumblings remain only that the problem cannot be resolved.
Credit Union Times unveiled its 2011 Trailblazer Awards picks at the GAC. Please check out our honorees on pages 8-9 and how they’ve overcome their challenges for inspiration. James Pendulik turned Fairfax County FCU’s $2 million loss in 2009 into a $200,000 profit in 2010. Thomas Bonds self-liquidated Corporate America’s legacy assets while also covering as much as possible member losses in U.S. Central. ASI Federal Credit Union has had to overcome Hurricane Katrina, the economic downturn and the BP oil spill back-to-back-to-back. We were very pleased and humbled to meet all of our winners at the March 1 reception.
One challenge I face as an editor is advertisers attempting to influence editorial content with their money. Credit union vendors regularly make news that is of importance to our readers, and some do excellent public relations work. That is how to get into the editorial pages of Credit Union Times or any other news source for that matter.
For example, I sat down with Harland Financial Solutions and its executives provided a very well-prepared briefing on what the company was involved in. The company understood who its primary contact at Credit Union Times was and they spoke with him regularly. What really impressed me though was when they explained that they met with our technology correspondent at a conference late last year and provided him a briefing that was much more into the details of what Harland was involved in. With me in Washington, they were talking about much more big-picture items like member business lending and member growth. Understanding your audience when you’re briefing journalists like that is really sophisticated PR. Kudos.
On the other hand, another vendor I sat down with at the GAC I never hear from except when griping, and the company tries to throw its weight around with its advertising dollars. I care too much about Credit Union Times’ reputation with our readers to ever let this influence our coverage. In fact, we’ll still provide unbiased coverage to this organization in spite of it. It is a cause for which I gladly beat my head against the wall.