The bankers talk out of both sides of their mouths. As theyendeavor to keep credit unions from expanding their businesslending powers and reforming their 1930s capital structure, theyalso want to embody credit unions. Copying is the sincerest form offlattery.

A recent editor’s column in American Banker stated thatreputation was the No. 1 problem for banks currently. Following thefinancial crisis, that is a difficult declaration to dispute.

She pointed to several industries that have recently had tothink differently and work extremely hard to right their bad raps,such as the plastics industry throwing its weight behind recyclingand pharmaceuticals giving medicines away to people who can’tafford them. However the Banker column said too manybankers are in denial or playing defense.

The piece advocates for a massive, industry-wide cooperativecampaign to try to clean up the mess they’ve made like the otherindustries mentioned accomplished.

I find this unlikely. The big guys that would have to get behindit financially have proven they’re too big to fail and they don’tcare much. Just look at the latest JP Morgan $2 billion tradingloss that the regulator said was due to weak risk oversight.

Also HuffingtonPost.com recently reported that SunTrust Bankconfirmed it would hike some of its fees and minimum balances,which doesn’t sound very credit union-like. But according to arelated Banker article based on a KPMG survey of bankers, some banks are rethinking theirbusiness models. The biggest threats they reported were nationalbanks and emerging, nontraditional competitors, leading them tostrengthen IT investment.

Certain customer segments are particularly important to thesebankers, KPMG found, including the mass affluent (37%), youngrising professionals (23%), and the underserved market (20%). It’snot surprising that they’re going after much of the same segmentsthat credit unions are targeting. The bankers see these groups ashaving the greatest growth potential.

Credit unions by their very nature have a leg up on the banks.The survey said that to be successful with these focal points, thebanks would need to hone their relationship building skills. Creditunions already are closer to their member-owners and should be ableto take advantage of this relationship. The bankers are studyingways to bolster their cross selling and credit unions must, too.Selling keeps the lights on so you can serve your members.

Due to their slimmer wallets, credit unions have also had to bemore innovative, which could help them in the race to various ITdevelopments to better serve their members.

The $674 million Bay Federal Credit Union in Capitola, Calif., for examplerecently agreed to sell its in-house document management solutionto Thuridion of Scotts Valley, Calif. The project saved the creditunion “seven figures” in software and maintenance costs over 10years. It also provided a tool to help credit union employeesbetter serve their members.

According to the KPMG study, 38% of bankers were concentratingcapital investments in mobile banking and payments but 24% wereinvesting in branches. While some have argued the branch is dead, others see its role as merely evolving. Technology isn’t necessarily killing the branch butmodernizing it. Just last week, NAFCU asked the NCUA to update itsFOM regulation to consider video teller machines as a viable service delivery option; afew years back the agency removed ATMs from the permissibleoptions.

Several credit unions now use the personal teller machines,including the $2.4 billion Tower FCU, $756 million Mid-Hudson Valley FCU in Kingston, N.Y., and the $2.1 billionCoastal FCU in Raleigh, N.C. Like never before the agency willhave to keep a close eye on its regulations to ensure they keeppace with technological developments.

Credit unions are also innovating in whom they’re trying toserve. Last week the NCUA approved a field of membership for theproposed new Green Energy Federal Credit Union. The credit union plans toserve businesses and organizations involved in residential andcommercial energy renewal and efficiency improvements, said AFCFirst Financial, which provides energy lending and rebate programsand manages a network of more than 3,000 approved contractors whowork in selling, installing and servicing high-efficiency HVAC,weatherization and other improvements.

In addition the sponsor is looking to add a low-income communityof 100,000 people around its hometown of Allentown, Pa. Going greenand serving the underserved are two of the characteristics thatdefine credit unions as financial service providers that care aboutlocal communities without the threat of CRA.

In the aftermath of the financial crisis, another definingcharacteristic is credit unions’ conservative nature that allowedthem live to fight another day for their members. This philosophythough has not been lost on U.S. Bancorp’s Richard Davis as a key business strategy sincehe took the helm just prior to the crisis. He calls it running aclassic bank, boring even, in a recent BusinessWeekarticle.

Classic banking is the business philosophy credit unions havealways followed, and if the above mentioned innovations that remaintrue to that philosophy can be called boring, so be it.