All businesses, including credit unions, must face a newreality. For a decade, it seems credit unions have had a build itand they will come mentality. Credit unions know they're great andassume others know it too. As Washington begins its grilling ofWall Street executives and how our economy got the way it is, it'salso a natural time for credit unions to reflect.

Credit unions are cooperatives organized to serve their members,but they are also financial services businesses. Credit unions needearnings to maintain their net worth and further invest in thebusiness. If credit unions aren't doing that, they won't survive.If they aren't fulfilling their purpose of serving members, theywon't survive. At times, this can create a philosophical tug-of-warfor credit unions. For example, a member has been working hard topull themselves out of debt only to get laid off. Recent historysuggests the member fully intends to pay back the debt, but howlong will it take that person to find a job, and if they're alreadyin a hole, how much longer will it take for the member to dig out?Valid questions to struggle with because if a credit union makesthe wrong choice too many times, the rest of the membership couldbe put in jeopardy.

How does a credit union make these calls? There are creditscores and profiles to assist in this decision making, and, whileit's not the most efficient way, in scenarios as described above,credit unions should get back to interviewing the member. Somecredit unions are even offering job-finding assistance. In the longrun, it is in the credit union's and everyone's best interest tohave that person employed. However, devoting this type of time andexpense isn't popular in a world where financials are keenlyfollowed not quarterly, not monthly, but weekly and even daily attimes. This type of micromanaging of numbers, which has filteredin, in part from the for-profit sector, can leave credit unionsmissing the forest for the trees. The credit unions philosophydictates that they should take the risk on a member more often thannot. Turn that around, however, and the individual member becomesthe tree obscuring the forest. A tricky predicament indeed, but theconflict is not to be ignored.

Getting back to basics is the cleansing the industry needs. Thatmeans offering members reasonable products at a reasonable ratethat are in their best interests. Not gorging on $35 fees onoverdrafts that could very well amount to less than that becausethe market will allow it, but actually pricing for the riskinvolved. Credit unions should look at services that might be newto your credit union but not new to the financial services market.Student lending is a product that has been tested, but the bulk ofcredit unions still are reticent to enter the market. Many alreadydo it anyway via home equities, but it's better to know the actualrisk you're taking on to the degree it can be determined.

Business lending has been somewhat of an elephant in the roomfor credit unions. Some credit unions, as well as many otherlenders, have gotten into trouble with commercial real estateloans. These loans carry high reward with them, such as all theassociated fees and the economies of scale, but for that, there isalso huge risk, as some are discovering. However, credit unionsneed not jump into commercial real estate to make business loans.Remember: Profit is not your motive. Not to say that it's notimportant. But, perhaps making 10 solid small business loans can bemore profitable in time because 1) you've diversified your risk and2) those 10 small business owners will each tell 10 other smallbusiness owners how well they were treated at your credit union.Credit unions aren't out to make a quick buck, but some have lostsight of that.

At the same time, credit union lobbyists are working towardexpanding member business lending powers. Business lending, likemany other financial services, is not new. Credit unions have beendoing it since their inception. They just need to keep their eyeson the prize-serving their membership.

Credit Union Times is no stranger to facing new realities whileadhering to our principles. We're considering moving some of ourcontent behind a firewall. As a journalist, First Amendmentadvocate and the proud editor of this publication, our new realityis that print advertising is soft, while digital is growing. Printsubscription growth has been flat, while cutimes.com readership isthrough the roof. We know all of our readers appreciate the valueof the most accurate and fastest news in the business, but how manywill put their money where their eyes are? It's an issue we'redebating; just listen to thishttp://www.blogtalkradio.com/cuwatercooler.

Credit Union Times has been giving our product away; many creditunions do the same thing with certain services. Maybe it's time toplace old-fashioned value back on the basics.
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