27 August 2009

Bringing Back Optimism

"There is no sadder sight than a young pessimist, except an old optimist." - Mark Twain, 1903.

While I don't make a habit of arguing with the deceased (especially when we're talking about someone of Twain's brilliance), I think I'm going to dispute this assessment.

"There is no sadder sight than a pessimistic credit union employee, except a pessimistic credit union executive." - Matt Davis, now.

Don't get me wrong. There is plenty to be concerned about in the world of financial institutions these days. Over-regulation, a confused consumer base, as well as new legislation with unintended negative consequences for both consumers and financial institutions have wreaked havoc on even the most happy-go-lucky industry insiders. I get that.

But I also believe that it is times like these that should separate leaders from from the pack, the special from the mediocre, and the hopeful from the hopeless. Credit union leaders must realize that now is the time our members need us more than ever. Now is the time to make an impact. Now is the time to reach out to those people who have been pushed out of the system.

Here's why credit unions should be optimistic: we are uniquely positioned to help people through this trying economic time. Imagine being an executive at a bank. You go to your bank's board and say, "hey, our customers are really going through a rough time right now. Let's start making small, unprofitable loans to help them make ends meet. Let's modify loan agreements so our customers can stay in their cars or homes. I think we should also lower fees so we don't add insult to economic injury."

By the time the board stopped laughing, you would probably be out on the street just like your disrespected customers.

The promise of credit unions is that compassion can play a role in operations. Sure, budgets are tight. The financial services industry's future is uncertain. The economy will likely be rough for quite some time. But our members need us now.

My point is this (and it is intentionally controversial). The future of your credit union is far less important than the future of your members. Yes, I just wrote that.

Don't misinterpret that. While we are not in business for profit, we are not in business to lose money either. This, I realize. But some credit unions are so terrified to dip into the sacred cookie jar called capital, that we have used the economy as an excuse to hibernate when our members desperately need our help.

Swallow your pride. Spend some money. Take some chances on your members. Be optimistic that in doing this, you are being exactly what you promised your members you would be: a financial institution that they can count on, no matter what.

6 comments:

denisewymore said...

I wrote this really great comment to your post and apparently hit the wrong button and blammo - it's gone. Dontcha hate that?

But you inspired me to write my own blog post - and I've referred my readers to yours. Someone already commented!

Just wanted you to know that I think you're amazing - and not afraid to talk about real issues. We can chase ROA all day - but if it means we drive members away - we're screwed.

Janine said...

Matt - I knew there was a reason I liked you (actually many reasons). Your passion is right on and well stated. We are in opportune times. We do have the ability to affect the future. The credit union movement, trade associations, credit unions, and staff all need to find ways to collaborate and innovate forward.It's important we remain focused on "people helping people"!

Mark Arnold said...

Matt--Great comments, especially about spending money now. The credit unions that will be the most successful post-recession are the ones that are spending now during the recession. Keep up the great work.

Andy said...

Right on Matt. This isn't the time to sit on stockpiles of capital and wait for something to happen. Now is the time to use that capital to do good, be a part of the solution to the mess we are in, build loyalty, and build community.

This is a huge opportunity for credit unions to come out on top, but instead we are content to sit on our capital and wait...for what? For the ecconomy to turn around so we can make more capital? What good does it do us to have capital if it is never put to use. Isn't that what credit unions are for? To use their capital for the benefit of our members. I think some of us (credit unions) have forgoten that.

Breathe said...

It's also a critical time for Leagues. There's an opportunity to build brand credit union. But with most of them struggling to fill conferences and a future of CUs who may not re-up, there doesn't seem to be the ... optimism to jump out there and take it on.

Entire mktg dept have been laid off at leagues around the country. Which personally strikes me as either ironic or tragic.

Hopefully that thinking (short term and save the reserves at all costs) will change. Great post.

Winter

Dennis Blanchard said...

Since I started working in 1965 I have been nothing but a credit union member. Why not? I have not yet found a reason to belong to a bank. First of all, I don't trust them, they're driven TOTALLY by profit, the customer is just there to fund them. I belong to the Digital Credit Union (started by the defunct Digital Equipment Corp.)and wouldn't trade them for the world. Now, if we could only get health care coverage in this country that cared about its customers as much.

Dennis
Sarasota, FL