Editor’s Column: Cash Mobs Bring Out the Good, Hostility the Bad
Credit unions are financial pillars of their respective communities. They are small businesses. Many credit unions serve small businesses and are looking for ways to start or beef up business lending programs.
Consumers across America are looking to support local businesses and, as we saw with Bank Transfer Day, local financial institutions. Many of these consumers are your members and potential members. These are also the businesses that keep many of your members employed or could soon be hiring.
Over the last few years, social media has taken the nation and world by storm. It’s often seen as a way to engage with women and Gens X and Y. Many businesses are shifting to a more social type of business model. That’s always been credit unions’ model.
Mix all three ingredients together and you have cash mobs.
Credit unions like Innovations FCU have experimented with flash mobs, where employees secretly visit a local venue and start singing or dancing as previously rehearsed. Cash mobs go well beyond a trendy way to promote your credit union. A cash mob brings together local citizens on a specified day to spend $10 or $20 at a local business to demonstrate their support for the community member.
A cash mob done right can represent a multitude of benefits for the organizing credit union. First a credit union organizing one of these for a current business member can help ensure the company remains a lifelong member. It raises awareness of the credit union in the community. And by community, I also mean SEGs or single sponsors–they’re communities too. Organizing one for a nonmember, local business can earn new business members or individual members even if you aren’t interested in offering business services at this time. Indirectly, cash mobs raise awareness of going local and the importance of spending money within the community, which aides the community you’re serving as a whole.
But who has the time to dedicate to this, you ask. Partnering with another local business or credit unions or chamber of commerce or other trade association can help spread out the burden. Of course, anytime you put yourself in the public eye, you’re exposing your organization to reputational risk so be sure to perform some research into who you’re getting involved and your beneficiary.
Who knows? Maybe the business or community will demonstrate its appreciation with a member mob.
In its efforts to expand its business lending among other issues, HarborOne Credit Union is exploring converting to a mutual cooperative bank charter. This $1.9 billion credit union has walked the credit union talk, launching a multi-cultural learning center in the spirit of community development and bringing financial well-being to members and potential members. Even after converting, if approved, the current credit union plans to maintain the one member-one vote principle. CEO Jim Blake also represented his and other credit unions on the Federal Reserve Bank of Boston’s Community Depository Institutions Advisory Councils.
If the credit union ultimately converts it will be a great loss to the industry. In addition to the above, HarborOne will also be taking with it the stability of a very large member of the NCUSIF. A savvy credit union like HarborOne must see a value in converting despite recent reports in the American Banker that the administration expects the FDIC to become insolvent again, which will lay on the backs of member banks. According to the Banker, the FDIC disagreed with that assessment.
Also in the process of converting to a bank are $1.5 billion Technology Credit Union and the smaller, but not insignificantly sized, $193 million HAR-CO. These three, and likely more to come, represent significant coinage to the NCUSIF, the trade associations and credit union vendors. Even $24 billion SECU in North Carolina has intimated for the second time in the last decade it would like to look at FDIC insurance as it did in 2004 if not an actual charter change.
There is real hostility building up within the credit union community, and it’s not good for any of the parties concerned. Credit unions and the interested parties need to air their problems in the open before they become public sandbox displays. Rather than muzzling good open debate–self-inflicted and otherwise–opening up that dialogue would do much more good than closed-door rants and conversions that maybe could have been avoided. This is your wake up call. Who’s answering?