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MADISON, Wis. – CUNA Mutual has been in the headlines for laying off over 400 people in the last few months. CEO Jeff Post says the last thing he wants to do is cut employees, but in this case, the cuts are for the greater good of a company that is seeing more competition all the time. Post was enlightened by a survey of credit union CEOs. The survey was a clear indicator to him that CUNA Mutual is getting a break from credit unions just because they’re CUNA Mutual. Credit unions are utilizing the company’s services even though in some cases there are cheaper and comparable options out there. “Credit unions clearly give me the benefit of the doubt on price. At a certain point and time they have to buy from someone else,” said Post. “I’m not just talking about the bond. Bond is where we clearly have our greatest market share, but the fact of the matter is as credit unions become larger they have opportunities. A lot of other people want to sell them products,” said Post. (See sidebar for listing of CUNA Mutual’s top products and their fiercest competitors, according to CUNA Mutual.) In an internal survey of CUNA Mutual employees, 98% said the company was too pricey on most products. The company is in the midst of a three-year plan to get more efficient and in turn deliver better pricing to credit unions. Post said with employees and benefits accounting for 80% of company costs, job cuts were necessary and the logical place to save money. He does not believe they will hurt service levels. “I’ve been down this road before. The downsizing will actually help service. There will be a much clearer line of sight between our people and the customer. We’ll eliminate multiple touch points to the customer, so customers have one place they go,” said Post. He described employees as “scared and excited.” In a pre-Thanksgiving memo, Post told employees it’s OK to be nervous, and he too was nervous, as even he is uncertain how the changes will play out. But Post stresses that he would not be doing his fiduciary duty if he did not cut costs and make the company more competitive. Aside from the sale of its mortgage division to PHH, which did enrage some CU clients for the company’s short notice of the sale, most of the layoffs are still months away. Post said that will give employees time to find new jobs. The company is offering training and working with the state to place displaced employees. CUNA Mutual’s hands were tied somewhat on the PHH deal because PHH is a public company, and leaking the sale ahead of time could draw regulatory action. “We didn’t give as much lead time as we would have liked to. I think it [the sale] was the right decision,” said Post. Post has long described CUNA Mutual as having a silo environment for each product area. “Every single business had its own call center, every single business had its own claim operations, every single business had its own customer touch-point,” said Post. He wants to change that to one business talking to the customer. He wants a better customer experience and acknowledges that it is a confusing company to deal with. CUNA Mutual has 36 different call centers. He believes that number has to be reduced, though that does not necessarily mean a reduction in staff. He wants to centralize them where it makes sense, but some areas, like claims, where field work is vital, centralization isn’t prudent. The efficiency efforts at CUNA Mutual are out there for all to see, but what about new business ventures or organic growth? Post believes CUNA Mutual has a number of partnership opportunities that could see it serving entities other than credit unions. However, he said the company will only do so if it benefits both CUNA Mutual and credit unions. He cited a number of potential examples. CUNA Mutual could offer its 401(k) products to small businesses and at the same time cross-sell credit union services by offering a list of CUs in the area that could offer the businesses financial services. CUNA Mutual could partner with the AARP for insurance, and cross- sell credit union services with one of the largest groups in the country. It could partner with a provider of crop peril insurance to reach out to farmers and at the same time make America’s farmers more aware of credit unions. Post floated the idea of CUNA Mutual reaching out to other groups to credit union CEOs on a recent trip and said the response was overwhelmingly positive. This year’s revenues are expected to come in just below planned, at approximately $130 million, said Post. He’s not concerned about missing the planned mark for two reasons – the company had $20 million in plastic card losses which he attributed to the rising tide of identity theft, and it had to cover claims for the most expensive hurricane season on record. [email protected]

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