Both of these very well-run credit unions took a chance and took some lumps. But they are adeptly steering out of trouble and will put this behind them.

It goes to show though that even sophisticated

credit unions like Patelco and Wescom can run into subprime trouble.

What's interesting about the subprime problems like this one and that Centrix presented is credit unions got mixed up with third-party firms. Credit unions chose outside firms so they didn't have the cost of building up subprime infrastructure and knowledge in-house. This is the trouble. Credit unions should be commended for taking on subprime lending, there is a dire need for it, but there needs to be an industry solution or credit unions will have to invest the time and money to bring it in-house. It's certainly a good investment given the subprime market will likely only

grow. Credit unions historically rely heavily on third-party firms for all sorts of services so the move to a third-party subprime firm isn't surprising, it's just

not working.

- Careful What You Say. Some quotes just jump out at me and none did more so of late than one from CUNA economist Mike Schenk. Kudos to Schenk for getting the ear of the Wall Street Journal for their story on small businesses and the credit crunch. CUNA has been doing a much better job of getting into major newspapers.

But this time around, I don't think it was a positive. Here is Schenk's quote: "We are willing to make loans that for-profit institutions generally aren't willing to make."

The problem with that quote is the whole context of the story was about banks tightening their lending practices given the mortgage and subprime messes out there. Schenk's quote makes it seem as if credit unions are willing to take on more risk. With record debt levels and the fact that business lending is new for most credit unions, this quote could be misinterpreted for credit unions throwing caution to the wind. He probably was talking about credit unions willing to work with their members, listen to their stories and make an educated loan decision, or even the fact that CUs will make much smaller loans than banks, but it didn't come across that way.

- Know A PR Opportunity When You See One. Bank of America recently announced that it will increase its fees on in-branch ATM machines for non-depositors from $2 to $3. Imagine being forced to use a BofA machine for a $20 withdrawal and paying a $3 fee! It's a whopper. I was disappointed credit union groups didn't jump all over this announcement and put out their own press releases about the credit union advantage. The CO-OP Network should have led the charge playing up its growing surcharge-free network. You have to take advantage of these rare opportunities. Come on folks, practice proactive PR!

- People Problem. As one who manages, I have always believed that people are the most important asset of an organization. So when employees leave or employee problems develop, it has to become priority No.1. CUNA and NAFCU are facing some people problems right now.

CUNA is losing one of its top lobbyists in Dean Sagar. CUNA's lobbying team has seen turnover in the last few years with seasoned lobbyists John McKechnie and Gary Kohn departing for jobs working with the NCUA Board. It's imperative that CUNA shore up its lobbying team and fast. Continuity is key with lobbying and the problem CUNA has is it is difficult to find experienced lobbyists who also understand credit unions. Sagar came from a staff position with Congressman Barney Frank, chairman of the House Financial Services Committee, so he knew about credit unions, but still had a learning curve. Here's hoping Mica and crew can bring in a top-notch person.

Over at NAFCU, Fred Becker is also dealing with personnel issues. In a short period of time, NAFCU is losing its director of marketing, director of education and its director of planning, programming and special projects. Three operational staffers departing in such a short time presents challenges. Like CUNA, NAFCU has also lost some top lobbying talent, notably Bill Donovan, in recent years, and was able to fill that hole, but now has to move quickly on operational staffers.

All organizations face turnover, so CUNA and NAFCU aren't alone, but given the importance of a top lobbyist at CUNA and the lean and mean nature of NAFCU, all credit union eyes will be on their progress.

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