Credit unions generally act as a cooperative movement at all levels. However, the latest troubles of the corporate credit unions are betraying a different side.It's not a bad side, nor a good one; it just is what it is. The reality is that natural person credit unions are asking themselves 'How much cooperation can we withstand?'Larger natural person credit unions don't necessarily need the corporate system but pulling out is not an option if the system is to continue as it is currently structured. As cooperative and democratic as credit unions are, in this instance, those with the influence-read as money-will likely have the final say. In the end, the old capitalist adage of supply and demand will rule the day.However, thousands of smaller credit unions rely on the corporate system for their services. If they were suddenly without, these often less-staffed and overworked credit unions would be left scrambling for alternatives. And those alternatives may not be prepared to take in a flood of new institutions.Corporates and the NCUA's premium plan are again making headlines, as well as natural person credit unions' responses to the tumult taking place in the corporate system. Just look at the letters from our readers on page 16. Alternatives are being formulated by people far wiser than I, and hopefully they will come up with something that doesn't unnecessarily shut down options for consumers.Still, the nation as a whole is overbanked, especially by lenders, and supply and demand will win again. I wouldn't be surprised if in five years there are half the credit unions there are now, or less. Mostly these will result from "voluntary" mergers and the majority of credit unions snuffed out will not be because they were poorly run. It will come down to survival of the fittest, and often this means the largest and more diverse.Smaller credit unions will not become extinct. Those with a real niche and a hands-on approach with their members will remain vibrant, but they will also need a helping hand from the rest of this cooperative system-more with pleasing their regulators than pleasing their members.As for other credit unions, unfortunately in some regards, they may have to follow the lead of the banks to some degree. Credit unions like to help their members out, but they really need to be taking a hard look at their offerings. Credit union executives need to be asking themselves: Should we be pulling back on available credit lines for members that appear to be heading for trouble? and Is that branch really performing up to par? Should we increase NSF fees or cut certain members out of the overdraft program?But first, in the credit union spirit, it's important to find out why members might be in trouble and early on. Were they recently laid off and is a work out possible? An alternative to cutting off a line of credit might be advisable for members historically in good standing, such as mandatory budget counseling to deal with a smaller income. Even something like recommending a community job placement organization might be all it takes to keep that member at the credit union and contributing to the bottom line.Some credit unions, many for the first time in their histories, have made layoffs or are cutting back on hours for staff. These decisions are always very difficult, but an institution devoting too much of its budget to staffing, which is always a big ticket item anyway, will have a more difficult time surviving until the good times return.One good staffing investment right now might be a business services officer for those credit unions that aren't already involved. Business lending has been a big item on certain credit unions' and the NCUA's agenda in the last few years since SBA opened up its programs to more credit unions. However, a mention in a recent Raddon Financial Group (see story page 8) on the potential net interest margin and noninterest income on business deposits really opened my eyes. In talking with credit unions that are involved in business lending, not enough emphasis is placed on the deposit side. Raddon estimated roughly $1,000 a year in income on one $17,000 checking balance. That's not chump change, and especially now, it's a great opportunity for credit unions to gain members and boost the bottom line.–Comments? E-mail [email protected]

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