On his 10th anniversary within the credit union movement, I findit interesting that Fred Becker mentions his observation of theerosion of cooperation among credit unions. As one who passed thatsame milestone back in July, I'm very inclined to agree.Competition with other lenders and external pressures have helpedto drive a fissure into the cooperative philosophy of the creditunion industry. This is moving in the wrong direction.

Right now, when lending is depressed and ROA is in a slumpindustrywide is when credit unions need each other the most.Certainly, there are some credit unions that are doingextraordinarily well in these rough economic times, so ascooperatives these institutions should be sharing their successstories to nurture replication and strengthen the system as awhole. Even if you're not inclined to mushy sentiment about thecredit union movement and philosophy, just examine the NCUSIF. Thelast year has demonstrated how much all credit unions areinterconnected. The impact on participants in the deposit insurancefunds is not just reserved for federally insured credit unions;just look at the situation of the FDIC-insured banks and thepremiums leveled against ASI clients as well. There is no escapingsome of the interconnectivity of credit unions without escaping thecharter, and different, yet similar, problems await there.

In the pages of Credit Union Times, we like to promotediscussion and provide a variety of points of view relevant tocredit unions. Recently, we have run comments from Marv Umholtz andAlan Theriault that, in essence, state that credit unions are deadand they should become banks. It is every credit union's duty to atleast look at whether that would be best for members. Call it anexercise in reaffirmation because if true due diligence isperformed, credit unions will discover that conversion would not bein the member-owners' best interests.

So, OmniAmerican, the converted credit union which in fairnessremained a mutual entity for several years after converting from acredit union for various reasons, began trading on the NASDAQ latelast month. The credit union did not take the usual route byforming a mutual holding company to maintain a controlling share ofthe bank but went straight to 100% stock ownership. I don't knowhow much more plainly one could illustrate that the move isanticooperative and insider enrichment. Unfortunately for theinstigators of the credit union conversion, it took so long someweren't able to cash in.

One of the many things that credit unions need to get their acttogether on is a cooperative multimedia advertising campaign to letAmerican consumers know that they exist and why. Time is of theessence. If credit unions don't get something going soon, like thenext six months, they could lose the angry consumer tide againstbig banks forever.

Similarly, credit unions should not assume that this recessionis going to make all the member accounts they've been adding orincreasing stick. Credit unions must proactively grab thisopportunity to provide financial education to members andnonmembers in hopes of not only making them members, but at leastmore fiscally knowledgeable-it's for the greater good. Acombination of on-location classes that are interesting and onlinetools like Debt in Focus and other items are necessary for reachingmembers in the manner they want to be reached. As the economyrecovers and people begin borrowing again, you want them to be wisein their savings and use of credit and not only your own as thehousing bubble burst demonstrated. As President Obama said in theState of the Union address, “In the 21st century, the bestantipoverty program around is a world-class education.” And thathas to include financial education.

This circles back to demonstrate interconnectivity and the factthat it's not just a phenomenon of the credit union movement.Credit unions should learn to balance their founding philosophieswith some of the practices for-profit businesses around them. Whilecredit unions and banks have different motives, they have manysimilar processes that banks, because of their profit motive, mayhave made more efficient. Use that because the savings go back tomembers in one form or another. It doesn't even have to be afinancial institution. Look at other similarly sized businessesaround you. What are they doing that you could adapt to yourprocesses or even products? I recently participated in a CU WaterCooler Liquid Lunch blog talk radio show discussing the topic offree versus paid content. I hadn't thought about credit unions,trade groups and others being interested in that beyond beingconsumers of information.

We're all connected and reliant on each other. Credit unionsrely on members to save and borrow. Members rely on their jobs tobe able to save and borrow. Members' employers rely on large banksto lend the money to run the business. Those large banks rely oninvestments and loans to fund the borrowing. You get the point: Ifyour neighbor's house is foreclosed upon, everyone's property valuegoes down. Sharing a little of what you have-your know-how-can go along way to supporting an entire industry.

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