* A credit union CEO who attended a conference of one of thelargest electronic payment networks last week told me he washorrified by the talk of overdraft protection as a profit center.The talk was coming predominantly from bank leaders, as CUs did nothave a major presence at the conference. A story was told of a bankthat charged a customer $30 to get to the remaining $10 in hisaccount! One banker said, "It's a great country." The credit unionCEO said to me, "If this type of practice doesn't lead tolegislation on overdraft, I don't know what will." Meanwhile,overdraft protection programs are being launched everyday in thecredit union industry. A number of popular vendors continue to signup new clients. Given Congress' interest in credit unions servingthose of modest means, it goes without saying credit unions need tomanage their overdraft protection programs with members' bestinterests in mind. Kudos to the California CU League, whichrecently partnered with a law firm to assist credit unions inensuring they are in compliance with all regs related to overdraftprotection. * The poor, poor bankers. The USA Today last weekpublished statistics that show banks' profit margins outpace justabout any industry. Banks earn an astounding 17 cents of profit per$1 of sales. Banks are followed closely by pharmaceutical firms at16.2 cents. Community bankers, who are oft complaining about thecredit union tax-exemption, would probably say those profits aremostly from the large, mega banks. Alright, then how about we taxthose large, mega banks twice as much than they are paying now.Let's segment the banking industry into the large, mega banks -which would pay more taxes- and the community banks, who cancontinue to pay what they're paying. Doesn't make sense does it?Neither does segmenting the credit union industry and taxing largecredit unions that meet certain criteria as the bankers areproposing. * Credit unions must take the lead on identity theft.Helping members prevent identity theft is a perfect way to buildsolid member relationships. Every credit union newsletter and Website in the country should include information on how members canprotect themselves, and CUs should align themselves with identitytheft vendors. There are many quality products available to creditunions. Credit unions should hold seminars on identity theft andpromote identity security wherever they can. It's time to take thelead in combating this incestuous fraud. I love what StateEmployees CU of North Carolina is doing. Jim Blaine's CU isoffering SECU Member Identification Cards which include themember's picture and signature. The cards can be swept at theteller station so a member doesn't have to speak aloud theiraccount or Social Security number. The cards are a neat way topromote identity security, and they look great! (See page 12, CUTimes, Nov. 16.) * I see so many ads for online banks andbrokerages, I decided to do some secret shopping to see what creditunions are up against. I started with ING Direct, which ispublicizing its Orange accounts seemingly everywhere. The Web siteis simple and slick, but I wanted to talk to someone live. I calledthe toll-free number and could not have reached a person anyfaster. Literally two seconds after pressing a selection, acourteous service rep was on the line. He outlined the differentsavings options, including the Orange Savings Account, which ispaying 3.5% and carries no minimums and no withdrawal penalties. Hequickly took me through the online application process which wassimple - the account could be opened and funded entirely online. Irate the experience very highly. However, when I asked about onlinesecurity, the rep stumbled a bit, saying ING takes security veryseriously. I asked what that meant and he said the site does nothave military security, because it's not available commercially,but it has the next best thing. I next moved on to e*TradeFinancial. I saw an ad touting 370,000 ATMs nationwide. I calledand asked if there were any ATMs near my location, Central NewJersey, a very heavily populated area and often ranked as one ofthe nation's top counties to live in by Money magazine. Many of theresidents commute to New York City, so it's safe to say I do notreside in an obscure area. The e*Trade rep said unfortunately therewere no ATMs near me! I was taken aback, but she quickly pointedout that if I keep $5,000 in an account, they will rebate any ATMfees I incur. I then asked about the 370,000 nationwide ATMs thee*Trade ads tout? She laughed and said those ATMs are located invery obscure locations such as bowling alleys and gas stations. Shesaid e*Trade is relatively new to banking, so their ATM network isstill being developed. I was not impressed with e*Trade, but therep was more than courteous. * Credit unions should countthemselves as fortunate for having been involved in checktruncation for so many years. Many banks are going to have a devilof a time explaining to customers why they're not getting theirchecks back or they will have to use various technologies to printout images of checks for customers. More importantly, credit unionitem processors are way ahead on the image exchange curve. Mosthave told me they're simply waiting for banks to catch up. Onething is clear, when image exchange takes off, geography will nolonger be a factor in item processors signing up clients. It'sbecause of this I predict the credit union industry's major itemprocessors will either merge, or form a consortium to benefit fromeconomies of scale. -Comments? E-mail [email protected]