Debit Fee Helped Make the Radio Star
Recently, I had the experience of sitting on the other side of an interview (see player below).
WTDY-AM radio in Madison, Wis. interviewed me about some of the roots of the Bank Transfer Day phenomenon and the role of the debit card furor within it.
While a number of the questions focused on the current events and how do credit unions feel about Bank Transfer Day, there were enough of the old standby questions to make me realize both how much of an impact credit unions have had on the national economic conversation and how much they still need to do.
I have watched credit union service representatives do their best to get members to choose credit card options that I knew were likely better for the member but probably not as good for the credit union. I have seen them refinance auto loans for a 4% annual percentage rate when refinancing it at 6% would still have saved the member significant money. I have interviewed successful entrepreneurs who got their start up loans from credit unions when no one else would help them because a credit union understands the point of the relationship is about the member and not the profit he or she might bring the credit union. I have interviewed executives from two large credit unions that are subject to the debit interchange cap who told me that their credit unions will take the losses the cap will bring rather than increase fees on their members.
Could anyone have imagined even five years ago that major media outlets and consumer personalities would, one day, openly direct Americans to consider credit unions as their best option when looking for a banking partner? But many have. Could anyone have foreseen how neatly credit unions would fit into the burgeoning desire to control one’s life and assets locally? Or, how strongly the credit union governance structure of one depositor, one vote, would resonate with voters who tell pollsters they feel increasingly alienated from many of their political institutions?
Yet, all of these have happened to some degree, and so many people have either already switched to a credit union or indicated that they want to that the interviewer asked whether credit unions were different enough from banks to meet those expectations. Essentially, the interviewer asked, are credit unions really as good as so many people appear to want them to be?
I hope they will be, and of course, only time will tell. But assuming most credit unions meet the standard or at least come close enough to please their new members, they might come closer to answering perennial questions of how and why they are different.
I used the word “closer” because I believe the real credit union difference will never be something that can be packaged into a sound bite or arise out an equation. Being a member of a credit union that still knows why it’s a credit union is much more akin to being part of a family than it is shopping in a store.
Credit unions, plain and simple, are all about their members – about giving their members the most cost effective, efficient and timely financial services they can without actually losing money.
And none of these experiences could be expressed in something as tidy as a sound bite or a two sentence answer to the question of how and why credit unions are different. Instead, every one of the members arriving in the coming weeks will have to feel and understand that answer for themselves.
The wave of new members coming into credit unions now for the free checking, fee-free debit cards, lower rate credit cards, auto loans and business loans, will need to feel the credit union difference in order to understand what their credit union is really about. When that happens, credit unions will need to be ready to step up and show them. In the end, those experiences may turn out to be the longest lasting answer to the question of how and why credit unions are different.