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What a difference a week makes. There are so many things happening, I can’t possibly focus on one topic this week. Here is a potpourri of things that need to be addressed: * Banker/CU Bizarro World. Did I fall asleep for 10 or 20 years and wake up in a different world? Two developments from the banker/CU battle had me wondering. First, NCUA Vice Chairman Rodney Hood spoke at the North Carolina Bankers Association. Remember, the bankers sue NCUA as part of doing business. Why would Hood visit these scoundrels? He says the trip was set up ahead of time before he was confirmed to the NCUA Board. Hood was actually on the same program as ABA Chairman Harris Simmons and America’s Community Bankers President Diane-Casey Landry! I actually have no problem with Hood going to speak at a banker organization. We’re all adults, why not? The problem I have is with what he said. I quote, “I firmly believe that credit unions and banks have a shared vision and common goals.” Rodney is a sharp, bright guy, but hasn’t he seen enough evidence that banks and credit unions are worlds apart on many things? I know he was focusing in on regulatory burdens, but you can’t really throw out all the legal/political battles for common regulatory issues. Hood should have talked about the wasteful battle between banks and credit unions, a battle that consumers don’t want, a battle that helps no one except lawmakers who see each side battle to give more money. That would have been a great message to spring on those North Carolina bankers. In another strange banker/CU development, NAFCU teamed up with the ACB, the Independent Community Bankers of America and Citigroup to lobby for data security legislation. Now I know some background on NAFCU’s theories on lobbying, and they believe in finding common ground with bankers where they can to build consensus, but the fact that NAFCU’s top lobbyist, Dan Berger, came from the ACB as a lobbyist, concerns me. This is getting a little too cozy. NAFCU should remember the ads (featuring a rubber ducky) the ACB ran about credit unions looking and acting like banks, so they should be taxed like banks. Or Casey-Landry consistently saying the ACB welcomes credit unions converting to banks as “they grow up.” But NAFCU took this approach with another enemy, Congressman Patrick McHenry, on his conversion bill. Some thought it was a great move, others thought it sent the wrong message. * Conversion Confusion. Predictably, credit union conversions to banks are still happening. The latest is Lafayette FCU in Kensington, Md. I feel for Bill Brooks, the former CEO who was a die-hard credit union believer. He has to sit back and watch his former CU get dragged through the mud on the conversion. Have no fear credit union faithful, this conversion will not pass. Fortunately, we have another CU that doesn’t believe in communicating to members about the conversion. Members will be caught by surprise, read about it in the press, and get angry. It also has a sophisticated membership of government employees who won’t fall for any of the conversion reasons. The CU is run by a former SBA employee, who has brought the CU deeper into member business lending, but it still has cap room. Then there’s the intriguing merger/conversion of Nationwide FCU. Nationwide is merging with the newly created Nationwide Bank, and they will enjoy a tight relationship with Nationwide the insurance company, and its affiliates. In this case, the credit union has made a brilliant move-it is returning member equity based on account balances. That’s hard to argue with and gives the CU a great shield for any criticism. Even better, the credit union has notified its members before the board votes or even before the application is submitted. Again, brilliant PR, and the right way to treat members. Finally, a CU that is converting gets it. This CU was in a tough spot. Nationwide the company wanted to charter a bank as it is now permitted to do. If so, it would have been competing with the CU. Sources tell me this very same thing will happen in the State Farm case where 12 CUs are merging into one. I hope not. * Centrix Decimated. This may be an unpopular view, but I feel sorry for Centrix. Centrix was providing a subprime, indirect auto loan to the credit union industry until NCUA’s 2005 indirect lending risk alert put the brakes on its business. It’s funny, people refer to that risk alert generically, but that alert was only for one company. It could have been called a Centrix Risk Alert. I think Centrix got a bad deal. It demonstrated to regulators its process, and the safeguards it had in place, but credit unions did not want the heavy hand of NCUA coming down on them so they pulled out. Centrix announced another 250 layoffs and concedes that its CU business is quickly dying. There could have been a better middle of the road approach on this. NCUA did not introduce any significant limits to address the potential dangers of subprime, indirect lending. Centrix took it on the chin, and sadly a lot of B, C and D paper members are losing a financing option. * Bacino Again. Former NCUA Board Member Geoff Bacino has done something very difficult to do-he garnered his second presidential nomination, this time to the Federal Housing Finance Board. Even more amazing, Bacino, a Democrat, is going into a Republican administration. Bacino is one of these guys. He talks to everyone, loves politics, and seemingly has a contact everywhere. They’ve paid off for him. Now hopefully he can do some good for credit unions on the FHFB. * Good Stuff. Some good CU branding/financial literacy efforts are coming along nicely. The Biz Kid$ program led by the Washington CU League is now officially off the ground. Good for them. This is the kind of feel-good thing CUs need to do. Also, I am privy to another major branding initiative (top secret for now) that will soon take off in a state that is another example of credit unions embracing the need for branding! Great stuff! I still think national branding could and should happen. * Rather Interesting. Kudos to the California and Nevada CU Leagues for getting Dan Rather to keynote their annual convention. Rather, booted from CBS, will likely be shooting from the hip. * Get Them While Their Young. I want to point out a product offering all credit unions should be thinking about. Michigan State University FCU has an almost too cute program called the Lil’ Sweet Pea Club for newborns through age four. (See page 34 story). It includes a financial fundamentals book, and accounts with $50 or more get an impression casting kit for tiny handprints and footprints. It’s genius! The parents love it and hopefully you are starting a relationship from cradle to grave. This is the kind of creative marketing credit unions do better than anyone! -Comments? E-mail [email protected]

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