The Credit Union Warrior

This Site Has a New Home

2011-05-13T10:35:00.000-07:00

Please join me at the permanent home for this blog at www.creditunionwarrior.com

The Smell of Artistry?

2011-04-08T07:04:00.000-07:00

My wife ate at this really neat restaurant last night called the Mongolian Grill. The concept is kind of "Asian cuisine meets Subway." Diners walk through a series of stations to fill a bowl with the ingredients for their creation. They pick from an absurd number of meats, vegetables, sauces, starches, and other toppings, then hand their collection to a cook who turns it into something edible.

With the correct (incorrect?) choices, it was proven to me, one can create a culinary pungency that is illegal in 16 states. The smells of garlic, ginger, and (presumably) pickled opossum jowls radiated from her skin throughout the night. Even this morning, as she got out of the shower, I could smell traces of the concoction she so proudly created at the restaurant.

I wouldn't have mentioned this story here had it not been for the fact that an hour after she left for work, I caught a whiff of garlic on my shirt sleeve. I didn't even eat at the place, but now I smell like it. (Editor's note: I also mention the story here because my wife doesn't read my blog - shhhh!).

Want to know something odd? Even though I hated the smell and the type of food she ate, I liked being reminded of her. Our tastes for things like food, exercise, politics, and entertainment are as divergent as possible, but it works. It works because we're both collectors. She's a collector of exotic experiences, and I collect exotic ideas. We're better together (she may dispute this) than we are apart.

A good friend's grandfather used to tell me "if you hang around shit, you start to smell like it" (I suppose the same is true for Mongolian restaurants). What happens, then, if you hang around the virtuous, the challenging, the inspiring, the adventurous, the creative, and the intelligent? I believe who we all become is a direct result of the people with whom we surround, associate, and engage ourselves. This doesn't mean that we should seek out only those who are like us. Rather, it means that we should seek out those who can help us become who, and what, we want to be.

I was reminded of this point by a recent post a friend forwarded to me by Austin Kleon called "How to Steal Like an Artist (and 9 Other Things Nobody Told Me)". He suggests, quite wisely, that artists are collectors, not hoarders:

"...there's a difference: hoarders collect indiscriminately, the artist collects selectively. They only collect things that they really love."

While there's nothing artistic about that awful concoction my wife created, it's part of a collection I wouldn't trade for the world. What are you collecting? Who are you associating yourself with personally or professionally?

I promise you it makes a difference.

Why Just Block Charlie Sheen?

2011-03-09T04:59:00.000-08:00

Because the Internet is magical there is now a Charlie Sheen browser blocker. This Firefox extension redacts all mentions of the fallen actor from appearing on your screen so you can go back to being your productive self.

Build a bank browser blocker in the name of saving consumers money. It would be better than tiger's blood.

Couch to 5K and Financial Literacy Education

2011-02-14T19:36:00.000-08:00

There are good gifts and bad gifts.

A Christmas gift I got for my wife qualifies for the latter. You see, she's a dedicated and talented runner. I am the exact opposite. Time after time after time she has asked to me run with her. Just as often, I have said no.

In a moment of weakness I saw an ad for a "Couch to 5k" training class, and decided it would be a good idea for me to join. After the 12 week program, I will supposedly be able to run a 5k race with my wife. So, instead of spending $135 on another Christmas gift she would return (and give me the stink eye over), this would be my opportunity to spend the same amount on a (albeit delayed) shared experience.

Tonight was the first class. The takeaways were powerful...and had little to do with running.

Takeaways:
1. Free is Forgettable. During warm up walking (it's couch to 5k, OK?) two ladies behind me mentioned that even though $135 was a lot of money to pay for something like this, it was the only way they would force themselves to go through it. If they hadn't paid, it would be much easier to skip classes.

2. Accountability (Guilt) Creates Results. Each class, you are required to sign in and sign out. You perform each exercise in front of your peers. One lady I talked to said that she totally didn't want to go tonight, but she didn't want to let her friend down.

3. We're Terrible at Grading Ourselves. "Couch to 5k" clearly targets novice runners. While I saw many people who looked like they honestly pulled themselves off of the couch, Doritos crumbs and all, to go to the class, there were plenty of seasoned runners in the class as well. My take? There are people who need help and ask for it, and those who enjoy opportunities to feel like achievers. Both groups need attention.

4. Just Because It's Obvious (or Simple), Doesn't Mean Someone Else Is Offering It. Another conversation I had was with a guy named George. He was an experienced runner, but pays for and attends the classes because "no one else offers anything like this." A lady jogging next to me drove 50 miles each way to participate. Anyone could launch a program like this, but only one group did.

Forget I'm talking about running for a second and think about your credit union's financial literacy education initiatives. You have a gift to give. You just have to decide to give it.

Jim Blaine on Thomas Paine (and CUs)

2011-02-10T17:04:00.000-08:00

A good friend of mine shared the following video with me today of North Carolina State Employees' Credit Union CEO Jim Blaine speaking at the National Community Tax Coalition's 2009 Annual Meeting. While I'd encourage you to watch the entire video, I particularly want to draw your attention to his closing story that starts at the 21:07 mark.

Fear of Success

2011-02-09T20:27:00.000-08:00

Matisse once said that “If you want to be a painter, cut out your tongue." To be sure, it's much easier to talk about doing something than it is to actually do it. But why do we continuously find ourselves sitting on (or talking ourselves out of) ideas?

I'm sitting on two ideas that I've built all the way up to inches from launch. But still I wait. I stall. I hesitate.

I used to blame things like this on a simple fear of failure. What happens, after all, if you put your name and reputation behind an idea that ends up being a dud? What does that mean the next time you try to sell an idea? This risk is omnipresent when exploring innovation.

More and more, however, I'm starting to chalk up "failure to launch" to the fear of success. Think about it. What happens if your idea is a hit? Will you have time for it? Will it take your energy and time away from things you are already doing that you love? Things that pay the bills? Things that feel comfortable?

We talk about ideas because it requires no attention. Blurt it out. Heck, you can even build it out. But until we bring our creation to life, all we have done is create another distraction.

Linda Stone writes about something called Continuous Partial Attention to describe the modern worker's hyper-connected, always on, and always distracted way of life. The amount of work most of us do on a given day is astounding. How much of it, however, is accomplished with 100% focus? Imagine if you could do half the work, but do it twice as well...

In credit unions we battle regulatory issues, financial performance, member service, the economic environment, and a million other challenges each and every day at work, and every other waking hour on our smart phones, web browsers, and weary minds. It's little wonder that we see new ideas as impossible undertakings. It's a zero sum game, after all.

My take? We need to find a way to turn things off. To disconnect. To free our schedules from the hooks of today so we can focus on the future. We'd fear success a heck of a lot less, after all, if we could fit it into our schedules.

Trolls

2011-01-24T15:00:00.000-08:00

I've studied, written, and presented about innovation methodologies, making ideas happen, and inspiring positive change for long enough now that I realize there are many out there who are just fine with things the way they are. That's OK.

Change isn't always good.

Progress is.

The definition of progress, however, is usually in the eye of the beholder. Political discourse in this country is often just one huge, heated debate about what progress is and what it is not, what needs change, and what doesn't...and how to pay for it.

And as ugly as these conversations have gotten at times, they are the pinnacle of civility when compared to the the nasty things being written in the blogosphere. And it's not just political discussions. A trending (meaning thousands and thousands of people wrote about it) topic on Twitter just today was making fun of a woman's physical appearance. Two Florida teenagers were charged earlier this month for posting fake nude pictures of a classmate to Facebook because they got mad at her. Comment threads on every news story I've read in the past few months, regardless of the topic, have been filled with some of the most hateful, ignorant, and harmful language I have ever read.

Trolls, it seems, are everywhere. Worse, because they speak with the loudest and most repetitive voices, trolls make it seem that their viewpoint is shared by the masses.

Trolls, you see, don't like rational debate or progress. Trolls crave emotion. Trolls crave reaction. And because it's much easier to generate an emotional response by being the proverbial turd in the punchbowl than actually creating meaningful, positive dialogue, this is how trolls operate. On the Internet, trolls thrive because it is there where one can be completely anonymous. The nastier (and more unfounded) a comment is, the more likely it is the commenter conceals his/her identity.

Luckily, credit union blogs have steered pretty clear of these types of exchanges. There have been exceptions (comments on the Unrealized Losses blog were nasty at times), but for the most part the people who spend time sharing their thoughts about credit unions online have done so because they honestly want to help credit unions succeed. Sure, there are disagreements, but they have almost always been civil.

Still, our blogs are not immune to trolls. I've seen several just in the past two weeks rear their ugly heads. It's disappointing.

The worst thing for me is who is often targeted by trolls. Usually, it's the writers who have spent (volunteered) the most time helping credit unions who become victims. The people who share the most of themselves become the subject of the most ridicule.

It's all part of the game, I suppose.

I've made a point on this site (and many other bloggers I know have done the same) to publish all comments that are submitted by readers, regardless of their content, as long as they aren't SPAM. I plan on sticking to that. Still, I wonder what the point is? I'll move mountains to find an audience for productive debate on credit union issues. But why afford trolls unmitigated entry into adult conversations?

Credit unions were born out of dissent...from people who dared to challenge the way things are. So, challenge things. Challenge ideas. Challenge the people behind them. But as soon as trolls go personal, as soon as debate becomes attack, and as soon as the intent of a comment is not to enhance the conversation, but to incite anger...they don't deserve a forum.

Helping Members Make Better Purchase Decisions

2011-01-04T20:00:00.000-08:00

I've spent the past several weeks researching cars on the internet. I've used Edmunds.com and consumerreports.org quite a bit. I've also spent quite a bit of time searching Honda, Toyota, Ford, Jeep, and Nissan corporate sites. I guess I'm a cheapskate, but I want to make sure that I make the best purchase decision for my budget and family's lifestyle.

I'm a member of two credit unions and spend most of my waking hours writing/thinking/talking/researching about the industry. As much as credit unions depend on auto loans, why isn't my credit union's website the first place I'd go for unbiased buying advice?

My Year in Review

2010-12-23T06:46:00.000-08:00

This year has been one of the most hectic, rewarding, tiring, and exciting of my life. As I have a moment to reflect, I thought I'd share some of my proudest moments and biggest regrets of 2010. (Author's note: there's a 100% chance that I've left something important off of both of these lists.)

Proudest Things:
1. The birth of my son, Sullivan Cort Davis on January 5. The lost sleep, uncertain finances, hectic schedules, and almost overwhelming responsibility associated with welcoming home a child pale in comparison to the joy he has brought.
2. My Amazing Wife. All she did this year was give birth to a child, run like Forrest Gump, kick the GRE test's butt, work full time, and essentially be a single mother when I was on the road. I clearly don't deserve her.
3. The CU Water Cooler Symposium at FORUM Conference Center in Fishers, Indiana. This event proved what can happen when 20-30 like-minded people commit themselves to thinking differently and creating something special. The list of people to thank for this event is endless, but should start with the CU Water Cooler editors, FORUM Credit Union/FORUM Solutions (Cameron, Kristi, Leah, Jen, Andy J., and Amanda in particular), an amazing lineup of speakers who traveled from all over the continent, and the 140 or so people who decided this event was worth attending. At the very top of the list, however, has to be Tim McAlpine. No one put more passion or time into this event than Tim, and no one is more thankful for that than me.
4. Working with the Filene Research Institute. Few organizations on this planet, especially from within the credit union system, would be able to stomach my relentless focus on challenging status quo. Filene embraces that. I have learned so much this year from George's unassuming sagacity, Denise's endless creativity, Mark's relentless drive, Brent's magnetic quirkiness, and Ben's modest brilliance. But what's blown me away more than anything else is the ability for the people behind the scenes (Josey, Dan, Andrea, Monica, and Mallory) to keep our eccentric personalities on track.
5. Debt in Focus. The first i³ idea I was assigned to with Filene was an anonymous financial assessment tool called Debt in Focus. I love this program, and couldn't be more proud that it's already helped 250,000 consumers, many who have always been intimidated by traditional financial counseling, get the help they need to regain control of their debt.

Biggest Regrets:
1. CU Water Cooler Hasn't Gone Mainstream. The idea was pure, and the support I've gotten for the site has been heartwarming. But I haven't spent the energy (and money) necessary to put this site in front of the people we created it for. To break out of the credit union social media echochamber, we must find new ways to get the word out. This means giving current readers more ways to participate and more reason to spread the word about this resource, and finding the resources we need to take it to the next level. Changes are coming, but I waited too long.
2. "It's Time to Rethink Credit Union Conferences." I stand by what I wrote in this op-ed piece I wrote for the Credit Union Times (see the unedited version here). I should have known, however, that it would be misinterpreted. This piece actually wasn't directed at conference planners. It was written to credit union professionals, volunteers, business partners, trades, and membership organizations. We all need to be more efficient - with time, money, and the choices we make. My experience with the CU Water Cooler Symposium taught me how tough it is to create a quality, affordable event. We can only do that if we all learn what's important in an event, and what's not. This opinion piece was greeted warmly by readers, but often not for the reason it was written. I wrote a challenge for us to do better, not a condemnation of what is.
3. Not Taking a Bigger Leadership Role. I've stayed uncharacteristically quiet about some of the major developments in credit unions this year (corporate situation, mega mergers, NCUA actions, financial reform, etc.) This has been a conscious decision, and largely a good one. I haven't wanted to give commentary about this stuff because talking time is over. My regret is that I haven't been able to create solutions that well help credit unions deal with these changes. I'm trying, make no mistake, but I simply haven't made it happen.
4. I've Neglected this Blog. I've never been known to write very frequently on this site, but it seems like I'm writing less and less. I'll do better...I promise.

Thank you all for being such great readers for so long. I wish you nothing but the happiest of holidays, and hope Santa brings you everything you wanted for your stocking. What am I asking for this Christmas? Simple. At least 4 more wins for the Colts, 2 smiling sons, 1 happy wife, and the comfort of knowing I have friends like you out there.

Merry Christmas.
Matt

It's Time to Rethink Credit Union Conferences

2010-12-23T06:17:00.000-08:00

(Originally published and edited by The Credit Union Times, November 17, 2010. Note: This has unfortunately been interpreted as a condemnation of all credit union conferences. The intention was to draw from my personal experiences at conferences and highlight what does and does not work. Even more importantly, I wanted to refocus credit union people on efficiency. Professional education should be less about latitude, longitude, glitz, and glamour, and more about driving credit unions toward better, future-focused performance.)

Over the past eleven months as a contractor for the Filene Research Institute, dozens of credit unions, state leagues, and national associations have blessed me with invitations to speak in front of their audiences. This has been an amazing opportunity for me to meet credit union professionals, share my stories, and inspire positive change in our movement. Likewise, this experience has given me remarkable perspective on what works, and what doesn't work in credit union education. Here's what I've discovered:

Location matters...but it shouldn't.
Most conferences take place in gorgeous venues -- beautiful resorts, exotic locales, or exciting vacation spots with access to top golf courses, casinos, entertainment, and sight-seeing. This is a great way to drive attendance, but some events have made educational content a side show. I helped organize and host an independent credit union conference in Fishers, Indiana, last month called the CU Water Cooler Symposium. Indiana is gorgeous in October, but it's certainly not a vacation destination (with all due respect to my fellow Hoosiers). So, instead of attracting attendees who wanted to sunbathe, golf, or gamble, we hosted 140 credit union professionals who cared about one thing and one thing only: improving credit unions. The point is simply to say that location isn't the only attendance driver. Lead with content, and you won't have to be so concerned with expensive venues.

We need to improve access.
If you have the budget to attend a conference and can get away from your desk for a few days, you have access to conference education. If you can't pay, or can't find time to attend, your access is extremely limited. As a believer that credit unions are still a cooperative of cooperatives, this situation drives me nuts. If ideas are worth learning, they're worth sharing. We must improve access by lowering prices, facilitating knowledge sharing, allowing redistribution channels, and improving efficiencies.

I love how CUNA Mutual designed its Virtual Discovery Conference to improve access. Registration was free. Content was terrific. Sessions were recorded for later consumption. Speakers participated remotely. That model works. Similarly, the CU Water Cooler Symposium live streamed all of its content through the Credit Union Times' website. Didn't pay to attend the conference? No sweat. We still want you to be able to learn from it.

I still don't think there's a total replacement for the face-to-face communication and interaction that comes with being in the same physical location as other credit union professionals. Accordingly, I don't believe that giving away content will be the end of a sustainable conference business model. Declining accessibility in the form of high prices, inconvenient travel, prohibited redistribution and relationship exclusivity, however, will.

Sponsors are not second class citizens.
You've seen it. At many conferences, sponsors (vendors) are herded by the dozens into remote exhibit halls, hoping that the thousands of dollars in sponsorship, travel, and swag expenditures will yield any discernible amount of exposure, sales leads, or (gasp) appreciation. Sponsorships are sold to anyone willing to pay for them. Regardless of their relevance or how much they dilute a business partner's chance for success, the number of sponsors (and subsequent revenue) is a key performance metric for events.

This is wrong. Conference planners would do attendees and their sponsors a huge favor if they were more selective about who can sponsor, and how those sponsors are integrated into the events. Taking a page out of Finovate's book, the CU Water Cooler Symposium handpicked sponsors with interesting and new products, gave them eight minutes on stage to talk about their product/service, and then hosted a thoughtful Q&A session for the crowd. This session was well-received because of the attention we paid to sponsor selection. When you do that, you're able to bring value to both the sponsors' and the attendees' conference expenditures.

Talking at people is so 1995.
Credit union professionals are an intelligent lot. They are living and breathing the challenges and solutions that most conference speakers are simply observing. So, why do most sessions have so little interaction? The most interactive conference I attended this year was the Texas Credit Union League's New Ideas Conference. Each speaker gave a thirty minute talk, followed by a thirty minute facilitated Q&A session. Hats were passed around to accept questions for attendees too afraid to speak up, and independent facilitators asked the questions everyone was thinking but didn't want to say aloud. This format works. Attendees aren't just students, they're experts. Educational events should be as much about allowing attendees to share information as they are about absorbing speakers' content.

At the CU Water Cooler Symposium, we created expert panels from the crowd to do sessions of their choosing. We also assigned well-known credit union personalities to facilitate lively Q&A sessions after each talk. We did this because the best content often comes as a result of casual conversation, not premeditated rhetoric. Find a way to dig deeper into the topics by getting your attendees more involved.

My colleague, Brent Dixon, organized a grassroots movement of young people called "Crash" to help young people get better connected to the credit union system's largest events. At Crash the One and Crash the GAC sessions were casual. Speakers sat among the attendees, gave informal remarks, shared from the heart, and forever changed the lives of the young attendees. Humans want interaction, not to be talked at. Let's figure out a better way to make this happen.

Moving credit unions forward requires rethinking the traditional credit union educational experience. Our time is too valuable, issues are too complex, budgets are too tight and stakes are too high to settle for status quo. Rethinking the way our system approaches education doesn't mean what we are currently doing is completely broken, it's just a way to channel the posthumous urgings of our organization's namesake, Edward A. Filene. "Progress is the constant replacing of the best there is with something better still."

A Question for You.

2010-12-14T19:33:00.000-08:00

OK...we know things are broken. We've complained about it. We've criticized this. We've criticized that. We've talked about possible solutions. The key question is this:

What are you going to do about it?

Put Us Out of Business

2010-10-12T11:55:00.000-07:00

A few weeks ago, a colleague of mine was co-presenting a talk about emerging technologies in financial services for a large group of credit union executives and volunteers. At one point the discussion turned to PFMs; specifically, how giving members more information about their financial behavior could allow them to reduce spending, enjoy the fruits of thrift, minimize their dependence on high-priced credit, and prevent costly overdraft charges.

During the Q&A session afterward, a credit union CEO asked (paraphrasing), "why on earth would we want to make our members less profitable?"

My colleague's response (again paraphrasing): "if your credit union's success is tied to your members' failure, you may want to rethink your business model."

As much as I liked this response, the fact that this exchange took place is disheartening. How did we get to this place? How did our service organizations morph into disservice organizations?

Contrast that CEO's mindset with Jack Moser, an Ohio drunk driving defense attorney hellbent on putting himself out of business. Moser is one of the area's biggest supporters of initiatives to eliminate the senselessness of driving under the influence, and yearns for the day he has no more clients.

Credit unions seem to have forgotten one of Edward Filene's greatest teachings; that if you offer anything except the best possible products at the best possible prices, you are instituting an unsustainable (and inefficient) business model. In way too many cases we've overspent, overbuilt, and overgrown. We've prioritized our credit unions' net income concerns over those of our members. We are on record fighting against the consumer protections outlined in the CARD Act and the larger financial reform bill.

In many ways we've lost sight of what it is to be a credit union.

I can't help but relate the devolution of credit unions to that of labor unions. (I know this assertion will rub some of you the wrong way, but I'm not shy.) Certainly, there was a time in our nation's history at which labor unions served a very important, and productive, role. Labor conditions for railroad companies and steel mills a hundred years ago were atrocious, and needed to be remedied. Unions fixed those conditions and made sure that workers were safe, fairly compensated, and assured some semblance of work/life balance.

Today, labor unions are at least partially responsible for allowing bad teachers to litter our schools, professional athletes to price most families out of watching them play, the collapse of the U.S. automobile industry, and the shipment of millions of jobs overseas. This wasn't the goal, of course. It's simply a display of what happens when good intentions get pushed aside by greed. At some point, it would have been nice if unions would have decided, "We did it! Our mission has been accomplished. Let's have a beer and reconvene if and only if we're needed."

Credit unions should be working to put themselves out of business too. Our goal should be to make sure that consumers have access to affordable credit for provident and productive purposes, while understanding (and demonstrating that understanding) the importance of thrift. Instead, we're fascinated with growth, net income, power structures, competition with one another, and a childish "banks are evil, credit unions are saints" mentality. Competition is healthy. But our supply far exceeds the demand for our services. This, in many ways, is due to our success. In many ways we've succeeded.

In many more, we've failed.

If we truly are different as a movement, we should move mountains so that some day we can all call it quits.

An Old Flame Gets Me Excited...About Credit Scores

2010-09-24T07:26:00.000-07:00

I received an email from an old flame a few weeks ago that really got me excited. "Umm...Matt," I'm sure you're thinking. "Your wife may be reading this blog. Perhaps there's a better venue for this post?"

If so, that's an excellent observation...save these two important points: 1) There's a better chance of me wearing a Lady Gaga meat dress than my wife reading my blog; and 2) The old flame I'm referring to is the company CreditKarma.

Several years ago, OpenSourceCU brought my attention to an internet startup company called CreditKarma. The site was great, offering free credit scores to consumers within minutes of signing up. You also received a ton of tools to help you understand what your score means, how it compares to your peers, and how you can improve upon it. The catch was really no catch at all. Based on your credit score, CreditKarma displayed affiliate financial services advertisements for which you qualified.

Theretofore, it had always frustrated me that credit scores, which were so vital to consumers' financial lives, were so hard (and expensive) to get and understand. I loved CreditKarma, and wanted my credit union to embrace it. Alas, it was extremely difficult to make the case that sending members to a site that cross sells competitor products and services was a brilliant business move for our credit union (I still argue that it's our duty as credit unions to get this information to members as affordably as possible, that we should want our members to get the best deal possible no matter who it's from, and that this model works for Progessive Insurance...but I wasn't going to win that argument.)

That's why I was so excited about CreditKarma's email. After spending some time kicking the tires of their new white label service, and talking with CreditKarma staff, I think it's time for credit unions to give them another look.

Here's why:

They've grown. CreditKarma now serves over 2 million members. Credit unions can display ads with either CPM or CPC pricing basis to market to members and potential members based on zip code, credit score, and other data. Until credit unions embrace this service, these 2 million members will see only ads from big banks. Now is a great time for credit unions to compete for their business.
They're all yours. With the launch of their new while label offering, credit unions are able to provide members with credit score information, various credit score analyses, and targeted offers based on credit worthiness without directing them to competing services.
They can help you create a stronger borrower base. The quality of your loan portfolio depends on helping members improve their scores. It's always bothered me when credit unions spend more time and effort trying to attract new members than they do developing and deepening their relationships with existing members. You could spend a fortune marketing outside your credit union to attract high quality borrowers. I'd suggest that spending those dollars on improving members' credit profiles makes more sense.

I had the opportunity to interview CreditKarma CEO, Kenneth Lin for the CU Water Cooler's Liquid Lunch radio show Monday (check it out here), on the heels of a successful launch of their service at UW Credit Union. (Jim Bruene wrote an excellent review at Netbanker.com, by the way). One thing that we didn't get enough time to discuss, however, is something that I've always wondered about concerning innovative services like CreditKarma in the credit union space. Why have we been so slow to adopt such programs? What can innovative startups do to better reach out to credit union decision-makers? What's the biggest stumbling block that keeps credit unions from greenlighting these partnerships?

If credit unions want to remain competitive in an evolving marketplace, we need to do a better job of seeking out innovative services. This doesn't mean purchasing every new idea that comes along (or any of them), it simply means exploring them, evaluating their impact on your members, and deciding whether or not there's a business case for your credit union to adopt them.

(Personal note: I don't do paid product reviews on this blog. Never have, and never will. I wrote about CreditKarma because I like the service, and believe it can help credit unions.)

Credit Unions, Circa 2010

2010-09-21T20:08:00.000-07:00

"When a man walks into a room he brings his whole life with him. He has a million reasons for being anywhere -- just ask him. If you listen he’ll tell you how he got there, how he forgot where he was going, and then he woke up. If you listen he’ll tell you about the time he thought he was an angel and dreamt of being perfect. And then he’ll smile with wisdom, content that he realized the world isn’t perfect. We’re flawed because we want so much more. We’re ruined because we get these things and wish for what we had."

- Don Draper, Mad Men (Season 4, Episode 8)

DefaultCase Follow-Up

2010-09-09T13:06:00.000-07:00

Last week I wrote about a seemingly too good to be true offer from DefaultCase for 1-cent iPhone Cases. I promised a follow-up, and am pleased to report that the deal was legit.

Today I received the first part of my order, a blue iPhone 4 case. It's actually a pretty nice case. I'll never understand why any of the iPhone cases you see at AT&T and the Apple Store cost $30-$35, but I guess as long as people keep paying for them... The case I received from DefaultCase is every bit as nice as some of the cases you find in other retail establishments. It fits my phone tightly, feels good in my hand, and seems pretty durable.

Is it worth the $35 list price? That's a tough one. But, again, I think all cases are over-priced. If DefaultCase could find it in their hearts to price these in the $15-$20 range, I think they'd find a huge market ready and willing to buy from them.

My favorite part of the package (aside from the fact that DefaultCase proved to me that sometimes really good deals are legit), was the letter that was included. I love their personality, their openness, and humor. See for yourself:

Also, here are some images of the case itself:

An iPhone 4 Sucker's Experience with DefaultCase

2010-09-02T18:35:00.000-07:00

Because I'm a sucker, I bought an iPhone 4. Because I bought an iPhone 4, I hang up on people all the time. It's embarrassing.

It was especially embarrassing last week when I hung up on a webinar I was hosting for CUES.

Now, because I'm a sucker I continue to think that, even though AT&T's network is terrible and the iPhone 4 is fatally flawed, I can still fix this situation. I've changed the way I hold it. No luck. I've used a bumper. No dice. Undeterred, I keep looking for a wonder case that will fix my phone's ills.

And because I'm a sucker, I responded tonight to a web ad for one-cent iPhone 4 cases from a company called DefaultCase. Regular price: $34.99. My price: $0.01.

Am I an idiot?!?!

(Don't answer that.)

I should be too embarrassed to tell you all about this. I mean, if it's too good to be true, it usually is. And the jury is still out about this one, too. But I want this tactic to be legitimate so badly.

Here's why.

The site makes no secret that they are trying to build their brand, get people to use their product, and encourage customers getting this deal to tell their friends about it. They offer a "Share" link that allows you to tell all of your Facebook friends about the great deal you got. This, of course, is not a unique tactic. But, get this. They don't force you to share the information. It's up to you.

Interesting.

Then, I get the following email:

Don't go to the site to buy these cases until I tell you how this thing turns out. BUT...if this is legit, I love them and their style. And if this is legit, it's one of the best examples of humanizing a brand, living transparency, and being remarkable I've seen in years.

My Friend's New Blog

2010-08-10T10:28:00.000-07:00

If you know her, you love her. If you don't know her, you should.

Kelley Parks just launched her new blog today. Please check it out...she's doing great things for credit unions at her firm, Giraph.

http://giraphcu.wordpress.com/

What If We Used Paint?

2010-08-06T14:25:00.000-07:00

Sometimes it feels like we're drawing with chalk. You can draw with chalk, don't get me wrong. It's a fine medium for certain applications. But make no mistake, that's definitely what we're doing.

We're drawing with chalk.

Messy.

Clunky.

Inefficient.

Temporary.

Chalk.

It's certainly not the most likely tool a professional artist would use to create her life's crowning artistic achievement.

We try, nonetheless. Sometimes successfully. Sometimes not. Sometimes criticizing each other for holding the chalk incorrectly. For using the wrong colors. For not sharing.

Even when we create amazing works of art, deep down inside we know all too well that the sidewalk is only so big. That rain clouds could come any minute. That our co-creators may have a different, or competing, vision. That our success is fleeting.

We draw with chalk because that's what we know. Because it's from the earth. Because it feels right. Because of the dinosaur bones that made it all possible. Because it's the way we've always done it.

What if we used paint?

Bottle caps?

Rubber bands?

Would our art be less artistic?

Tim Filene's Job Hunt Experience

2010-08-03T19:58:00.000-07:00

Marketing Assistant - Posted August 1, 2010
ABC123 Credit Union is looking for a highly-seasoned Marketing Assistant in its fast-paced, extremely demanding Business Development department. The successful candidate will have a Bachelor's Degree in Business, Journalism, Accounting, Economics, or Ornithology with an MBA or PhD highly desirable, as well as 7-10 years of progressively responsible leadership experience in a marketing role. Must possess superior copy-writing, public speaking, creative, interpersonal, and analytical skills. Mastery of SQL, C#, HTML, PHP, MCIF, BSA, OFX, OFAC, and LOL also expected. Demonstrated community involvement is a must, as is proof of successful appointments/elections to state or federal government agencies. Bilingual or trilingual applicants are strongly desired.

Job Duties

Assist with the creation and implementation of all marketing initiatives
Answer the telephone when vendors call
Make paper copies of things that should be delivered electronically
Other duties as assigned

Perquisites

Excellent Benefits
401K Plan
Salary Up to $25,000 (Based on Experience)
Business Casual Workplace
Exciting Growth Potential

If you meet these requirements, please forward your resume, a letter describing your interest in this position, five references nationally recognized leaders in finance, government, or mass media, as well as certified results from self-funded drug, alcohol, and pregnancy screening to 123 ABC123 Drive, Any Town, NV 12312, ATTN: Lucy Anderson. No phone calls please.

___________________________________________________________

August 2, 2010

Dear Ms. Anderson:

Few things in my life have given me more pleasure than seeing ABC123's listing for an open Marketing Assistant position. My great grandfather was the late Edward Filene, widely credited as being the father of the American credit union system. It should be no surprise, I know, that credit unions caught my attention at an early age.

By the age of 9, I had organized my first not-for-profit financial cooperative, which has now blossomed into the $3 billion BMFCU in Leota, Indiana. Mother made me leave the credit union six years later because I received the lowest test score in my life: a 94% in 9th grade Geometry. Clearly, I had proven myself to be unable at that point to balance my academic life with running a large financial institution, while fulfilling my duties as Governor of the Hoosier state.

As usual, Mother was right. Stepping down from my role as President/CEO of BMFCU, I was able to focus on, and thrive with, my studies. I graduated after my 10th grade year to attend Yale, where I triple majored in Journalism, Business Administration, and Ornithology. An internship my sophomore year with IDEO got me interested in expanding my horizons to more creative outlets. So, with three undergraduate degrees under my belt the following semester, I turned down a Rhodes Scholarship in favor of admission to Cooper Union's famed art school. Thankfully, I was able to master the requirements of their BFA program while earning my MBA at nearby NYU.

Echoes of my father's voice telling me "reading and learning don't mean a thing if you don't do something with that knowledge" were inescapable, so I decided to help my good pal Mark Zuckerberg get a little project he called "Facebook" off the ground. I learned everything there was to know about PHP, C#, HTML, SQL, and more...Mark insisted on it. What's better, the elementary nature of this initiative gave me plenty of time to start refocusing on the credit union movement that I so dearly love. In my spare time, I taught myself German, Spanish, and Mandarin Chinese just in case a credit union somewhere may need multilingual help.

In 2006, I rejoined BMFCU to put all of my education to use. I was named President/CEO, but demoted myself to Marketing Assistant so I could understand how that function worked within our organizational structure. This was a good move. My experience allowed me to make the department run more efficiently, saving the credit union $487,000 in that year alone. Pleased with those results, I promoted myself to CMO. Under my leadership, we averaged 78% annual membership growth from 2007-2010. Even better, our return on average assets improved from a respectable 3.1% to a whopping 6.7% during that period.

These last six years have been amazingly productive for my self actualization needs, but I have found myself yearning for another opportunity to help a credit union from the Marketing Assistant position. I trust that you will find the attached resume meets the qualifications for your opening quite well. The enclosed references (Debbie Matz, Dan Mica, Barack Obama, Chuck Norris, and Gene Blishen) will also attest to my ability to perform the functions you have spelled out. I also took the trouble of flying to Johns Hopkins University Hospital to submit to four separate urine analysis tests. The results should have been shipped to you already via FedEx overnight delivery.

Please allow me the pleasure of setting up a time during which we can further discuss how ABC123 and I may help one another maximize our potential.

Sincerely,
Tim Filene

Enclosures

___________________________________________________________

August 3, 2010

Mr. Filene:

Thank you for your interest in ABC123's Marketing Assistant position. Unfortunately, our job description clearly calls for "7-10 years of progressively responsible leadership experience in a marketing role."

We will keep your resume on file for the next six months in case a suitable position opens up.

Sincerely,
Lucy Anderson
HR Generalist
ABC123 Credit Union

Reasons

2010-07-16T08:18:00.000-07:00

There is a reason you keep working for credit unions.

That reason has changed with time, no doubt. But there's a reason.

The people who I love working with, and for, in the movement have reasons that sound a lot like these:

"I believe in what we stand for." Or "I like helping people." Or "I want to make a difference." Or "this is fun!"

This group could help consumers from any desk, laptop, or setting in any industry. This group measures success in terms of impact, not in accountant speak. This group doesn't need credit unions. Credit unions need them.

There are other reasons people work for credit unions. Their reasons sound different. Their reasons are sprinkled with descriptors like "trapped," "stuck," "scared," "it's all I know," "the job market" and "I'm the [fill in leadership position of your choice], for crying out loud."

This group has seen new ideas fail, knows how hard change is, and fights like the dickens to avoid it. This group is toxic and all around us.

My reason for working for credit unions has changed dramatically over the years. "I don't know what all of this credit union stuff is, but this job description sounds like fun" quickly turned into "I believe in what we do." Later, my new "I want to make a difference" reason morphed into "I can make a difference."

I think I have a new reason.

Over the past several years, many amazing opportunities have presented themselves to me. In some cases, I created those opportunities with hard work, sacrifices in my personal life, and a naive insistence that I matter. In many other cases, serendipity gets the credit. Still, the major source of opportunity in my career has been the belief others have placed in me.

My latest opportunity was being able to attend the 1 Conference with the Crash the 1 group. The reasons these young adults "crashed" varied, I'd imagine. They came from all over the globe from credit unions large and small. They came from many different disciplines, education levels, and experience. Most important of all, however, was another attribute they brought: naiveté.

I think this struck me the hardest when I heard Tim McAlpine and Gene Blishen close the Crash event. Gene, after all of these years, is still naive enough to think small credit unions can do huge things. Tim is still naive enough to think he can create a youth movement that will add 1,000,000 members to credit unions in his career. They're not just naive...they're right.

The optimism of some of my favorite people in credit unions has been poisoned by cynicism. The lumps of the last several years have jaded even the most impervious credit union spirits. The same folks that used to ask "why can't we?" are telling each other why "that can't be done." The regulatory and economic environment has created a leadership crisis.

The reason I keep working for credit unions is because I don't want to grow up. The people that believe in me haven't provided me opportunity because of experience, or title, or politics. They've given me opportunity because they think I'm crazy and naive enough to do something with it.

"Crashing" has nothing to do with entitlement, or instant gratification, or unfair opportunity. Rather, Crash is a reminder to the old guard that what we need more than anything right now is inexperience, energy, optimism, and a self-assured belief that maybe, just maybe, we can change for the better.

What is the reason you keep working for credit unions?

Open Letter to Fans from This Blog's Owner Matt Davis

2010-07-10T10:24:00.000-07:00

Dear Dallas, All Employees of Frito-Lay, Yum Brands, Their Families, and Credit Union Supporters Wherever You May Be Tonight.

As you now know, our former Frito-Lay Credit Union, who grew up thanks to the sweat, investment and love of its members who it despicably deserted, is no longer a credit union.a

This was announced in 2004, after some members voted to overlook the power of mutual self help by converting to a federally chartered mutual savings bank called SharePlus Federal. The narcissistic, self-centered urging of CEO D. Craig Barnes claimed that the move would put the financial institution “on a level playing field in today’s competitive banking market.” At the time, SharePlus had $175 million in assets.

Clearly, that was bitterly disappointing to all of us.

The good news is that the rest of the hard-working, loyal, and driven credit unions that stayed committed to the member-owned, not-for-profit cooperative spirit have not betrayed our members nor NEVER will betray you.

I dig up this story because this week we learn that SharePlus Federal Bank has announced that it wants to raise up to $19.8 million in an initial public offering so it can become a bank holding company. SharePlus, it seems, discovered that their financial problems had little to do with their charter. In the past six years, the turncoat grew less than 5% annually (compared to 6.2% for all federally chartered credit unions during the same period). Through the first three months of 2010, SharePlus found a way to lose $332,000.

You simply didn’t deserve this kind of cowardly betrayal.

You have given so much and deserve so much more.

In the meantime, I want to make one statement to you tonight:

“I PERSONALLY GUARANTEE THAT AMERICA’S CREDIT UNIONS WILL SERVE YOU BETTER THAN ANY PROFIT DRIVEN, MISMANAGED FORMER ‘CREDIT UNION,’ SOON-TO-BE FORMER ‘MUTUAL SAVINGS BANK’”

You can take that to the bank…and your money to a credit union.

If you thought we were a great deal before the financial crisis, dedicated to helping members get access to affordable financial products and services, precious financial guidance, and a service over profit mentality, I can tell you that this shameful reminder of what happens when bankers succumb to short-sighted greed has shifted our “motivation” to previously unknown and previously never experienced levels.

Some people think they should go to heaven but NOT have to die to get there.

Sorry, but that’s not how it works.

This shocking act of disloyalty to the credit union system has not been forgotten, and sends the exact opposite lesson of what we would want other financial institutions to follow. And “what” we would want them to focus on – people or profit?

But the good news is that this heartless and callous action can only serve to remind us of the beauty of the credit union system. The grass isn’t always greener on the other side of the fence, and poor managers are simply poor managers.

The self-declared “customer-owned mutual savings institution” will be taking even more ownership away from its customers with this IPO.

Just watch.

Sleep well, consumers.

Tomorrow is a new and much brighter day…

I PROMISE you that our energy, focus, capital, knowledge and experience will be directed at one thing and one thing only:

DELIVERING YOU the affordable financial services you have long deserved and are long overdue…

Credit Union Warrior
Majority Owner of this Blog

A Penny for Your Thoughts

2010-07-07T20:01:00.000-07:00

I read a story today about a woman named La Rosa Carrington, who, stuck in a simultaneous fight with leukemia and unemployment, was informed by Discovery Benefits that her healthcare coverage is being canceled. Her monthly insurance premium, come to find out, had not been paid in full. Rules are rules, I guess. In fact, I'm a pretty big fan of demonstrating consistency in policy application.

This case was different.

Carrington had in fact paid her premium. Only, she had shorted the payment by one cent. That's right, a penny.

In a world where employees are empowered to be empathetic, use personal judgment, and bend rules when necessary, the fix here is easy. A Discovery Benefits representative, upon informing Carrington that her premium was not paid in full could have said:

"Our system shows that you did not pay your last premium in full, so unfortunately we're going to have to... Wait a minute. You were short a penny. Mrs. Carrington, this is silly. Do us a favor and pay an extra penny next time to cover this shortage. I'll leave a note on your account that you accidentally sent in the wrong amount. You can make it up next time. Please remember that the monthly payment is $289.45."

But that's not what happened.

Instead, Carrington was informed that her coverage was getting canceled and that she would be on the hook for the mounting medical bills associated with chemotherapy.

"A penny off? Well, that was stupid!"

"Lost your job? Not our problem."

Instead of dealing with this problem on a human level, Discovery Benefits clearly addressed it as a policy matter. A black and white issue. Instead of being empathetic, Carrington was instructed to send in a check or money order for a penny or face the cancelation of her coverage.

How strict are the policies and procedures at your credit union? Do you give your employees the authority to bend the rules when it is appropriate? Is your staff so concerned about a penny, or a check hold, or a firm credit score requirement that they lose sight of the human element of a situation?

Policies are important. People (and common decency) are more important.

Time to Get Rid of Deposit Insurance

2010-07-02T06:03:00.000-07:00

Want to fix safety and soundness concerns at credit unions? Want to make member ownership and the democratic process mean more at credit unions? Eliminate the NCUSIF.

Seriously, get rid of it. Get rid of the FDIC Deposit Insurance Fund (DIF) as well.

I realize this cannot (will not) happen, but it needs to. Here's why:

1) We need an environment of healthy risk. Our regulators are charged with maintaining the health of deposit/share insurance fund pools. Their goal is to minimize risk. But while too much risk is clearly not healthy, zero risk is a problem as well. A financial system that allows for zero risk doesn't help entrepreneurs get ideas off of the ground, doesn't help borrowers that need help the most, and doesn't allow the flexibility necessary to adapt quickly enough to changes in consumer need.

"Dude... Haven't you read about that thing they call the Great Depression?" you're likely wondering. "How about all of the bank and credit union failures in the past couple of years? Consumers need protection."

You're right. There were many lessons to be learned from the Great Depression. The most important one, of course, was that we have an obligation to make sure consumers and investors are provided with reliable information about the financial institutions they do business with. Deposit insurance doesn't improve the reliability or transparency of information, it makes information irrelevant. That brings me to the second reason we need to abolish deposit insurance.

2. Deposit insurance doesn't protect consumers, it harms them. Deposit insurance puts consumers at risk, even if indirectly. It's expensive. Although credit union members have never lost a dime of their insured funds in the history of the NCUSIF, and no taxpayer dollars have ever been used into the fund, its administration and the opportunity cost of maintaining a $20 billion organization (and keeping $10 billion in liquidity from consumers) is significant.

The story is worse for the FDIC's fund. Underwater by $21 billion, and losing on average nearly $2.8 billion/month due to bank closings since July 2008, the FDIC DIF has seen better days. Unfortunately, these aren't simply paper losses.

Where does this money come from? (After all, it is a zero sum game.) Recapitalization of these funds requires some combination of increased money supply (Treasury prints more money), taxpayer funded bailouts, and special assessments charged to financial institutions. The result is a vicious circle of some combination of higher taxes, more expensive financial services, more bank/CU closures, more consolidation (less consumer choice), and inflation.

"Great. So what you're saying is if a depositor's financial institution goes under, it's OK that they lose their life savings?"

Well...yes. That sounds awful, but let me explain with my third reason we should abolish deposit/share insurance.

3. The deposit/share insurance safety net discourages consumer due diligence. You know why people deposit funds at risky financial institutions? It doesn't matter if the bank/credit union fails. Their deposits/shares are covered. What if they weren't? Consumers would be forced to scrutinize the institutions they choose to do business with, be more skeptical of "too good to be true" offers, and take more ownership of their financial decisions (who they bank with, which products they choose, etc.).

The financial literacy crisis in America has been exacerbated by an almost ever-present consumer safety net. Want businesses, consumers, and government to be more cautious with risk? Let them fail. The reality of a poor decision's painful consequences is a great teacher.

"But how do you prevent a potential 'run on the bank'? Sounds like you are begging for the entire system to fail."

Actually, I'm begging for a much less intertwined system. That brings me to my last point.

4. Cooperation and insurance coverage should be opt-in and fair. Unlike in the banking world, where riskier institutions pay a higher premium to the DIF than more conservative banks, the NCUA makes no distinction between the funding requirements for risky credit unions versus more conservative credit unions. What does that mean? It means that conservative credit unions get punished for being responsible stewards of their members' assets, while credit unions that pose a much larger threat to the NCUSIF are not required to compensate for that risk. Risky credit unions do all the drinking and dancing, then ask the designated drivers to split the bill with them. Not cool.

Banks and credit unions should be given the choice to offer insurance or not. Further, they should be allowed to collaborate with any other financial institution or third party to form their own insurance funds with like-minded organizations. Some consumers will refuse to do business with a financial institution that doesn't offer deposit insurance. That's cool. The market will adjust. Some consumers will decide that higher returns, convenience, and innovation are worth a little bit of risk on their end. That's cool, too.

Government should demand financial institution transparency, send financial institution employees to jail for any deposit losses, and let consumers dictate what system develops. The system that crashed in 2008 rewarded ignorance, encouraged unnecessary risk, and placed zero responsibility on consumers or financial institutions to manage the balance of risk and reward. The system I'm proposing is different.

Now that you all think I'm crazy. Let me suggest an alternative fix: reduce the cap on insured shares.

The move to permanently increase deposit insurance from $100,000 to $250,000 flies in the face of reason. If anything, we should reduce that number to $25,000-$50,000. That amount covers most of America. The wealthier segment of the population, then, would be left with three choices: 1) Deposit funds in multiple, diversified financial institutions; 2) Do business with only the most safe and sound financial institution(s); and/or 3) Find an alternative use for those funds.

The sooner we can move away from the ghosts of misunderstood Great Depression lessons, the sooner we can develop a system of personal responsibility, managed risk, and sustainable operations.

Let Your Checkbook Do the Talking

2010-06-24T20:02:00.000-07:00

Danielle Chatfield-Beres is one of my favorite people in credit unions. As an amazing credit union marketer, Filene i3er, Partnership Symposium attendee, and all around awesome person, seemingly everything she's ever been involved in has become better as a result. One of my favorite stories about her was a decision not so long ago to leave her position as a rockstar credit union marketer to take a job at another credit union to become...a controller. She had aspirations to be a CEO someday, and that seemed to be the most logical way to position herself to make that happen. I love that.

Anyway, that's a long introduction to the point of this post. On the CUDE listserv the other day Danielle posted her frustration with the way Dick Durbin's interchange amendment has been discussed publicly by merchants. The basic argument on their side is that interchange (or swipe) fees are simply another case of meaningless profiteering by financial institutions.

Danielle has had enough, and posted what I think is a very clever way to fight back:

"My new protest weapon against interchange: My own checkbook. Specifically, my ability to give big box retailers precisely what they are purportedly after...a return to the good old days of the expenses of dealing with cash and checks.

I resolve to dig out my checkbook from under the dust bunnies and walk into a big box retailer, select about $10 worth of items to purchase...and proceed to the checkout counter with only my checkbook in my hand and my driver's license buried deep at the bottom of my purse where I'll have to spend a minute or so searching for it.

I'd love to get 25 or 30 of my closest CU friends to join me. I'd love to have others across the country do the same. I'd love it even more if we made it such a concerted event in different locales that we could REALLY get our local media to pay attention and bring a camera to watch how much people adore having their checkout lines clogged up with people paying by check.

I've read the interchange compromise summary. I've watched the hearings. I know this particular battle may not be won. But at least we can make a loud enough point about it that when consumers start seeing their account fees rising, we can give them certain legislators' contact information so they know who to thank for it."

I love this idea. I hope you do as well, and will join us on this.

(Now if I could only find that checkbook...)

Upright and Locked Positions

2010-06-23T18:41:00.000-07:00

I'm 5'7". Unless you're blue and live in a little mushroom village, that's not tall. Still, I am almost always cramped and uncomfortable on airplanes. And when the person sitting in front of me reclines his seat (I'm talking about you, Mr. Snoresalot), I have no space at all. I couldn't imagine how horrible flying would be if I had eaten more vegetables as a child.

I know the score. I know that the more seats you can jam into an airplane's cabin, the more revenue each flight can generate. I know that people have learned to expect discomfort on planes. I also know that there's a reason first class seats are more expensive. If you want flying to suck less, you have to have money.

Banking sucks too.

The more transactions a teller can perform in a day, the lower operating costs become. Consumers have learned to expect lines, discomfort, and divided attention. Special lines (or account terms, or phone numbers) are open for special customers. If you want banking to suck less, you have to have money.

I'm not sure what my point is other than to say this: 1) Don't recline your seat on a plane; 2) Efficiency is important, but you need to balance it with service; and 3) Seems like there's an excellent opportunity for planes, banks, and credit unions to redefine first class, and eliminate second class.

We have an obligation as credit unions to be as efficient as we possibly can. I'm in absolute awe of the credit unions who have succeeded at focusing on the training, processes, and strategies necessary to minimize operating expenses. Still, I would have to think there's an appetite out there for premium banking relationships (no waiting in line, no automated phone systems, 24/7 accessibility) open to the masses. Price it right, and you may find that there are people out there who are willing to pay an annual fee to make their lives less miserable.

I Still Dig the Diggers...But We Dug this Hole

2010-06-15T22:09:00.000-07:00

We could blame the recession. We could blame regulators. We could blame consumers/bank competition/[insert your legislator/president of choice]/Wall Street/each other.

Whatever we choose to blame, I think we all realize deep down the rut credit unions find themselves in has been largely carved out both by and for credit unions. Lip service to our core cooperative principles, an unwillingness to hire (and pay appropriately) top talent, being way too slow to adapt to changes in the competitive environment, misappropriated budget dollars, gross negligence regarding our corporates (from the elected to the electorate), and a hell-bent determination to follow as opposed to lead in the marketplace have much more to do with the predicament we find ourselves in than any external factor. If we are going to dig out of this rut, we need to make a few things happen:

1) We need to reevaluate our staffs (from top to bottom). Do we have the right talent in place to make the necessary improvements to our operations? Are we willing to pay for it? Are we willing to capitalize on this golden opportunity to gobble up the amazing supply of skill in the job market right now? We have some of the best people in the world working for credit unions. We also have some of the least talented and skilled. If your team isn't cutting the mustard, now is the time to make a change. Don't forget to look in the mirror.

2) Work together. Fighting with each other over 6% of the marketplace is asinine. Cut it the hell out. Collaborate. I don't necessarily care if we grow market share at all. I do care, however, if we refuse to capitalize on ways to lower operating expenses. If you are truly interested in serving your members, then you should be tirelessly searching for ways to cut costs. An easy start to this would be eliminating as many duplicative processes/expenditures as possible between credit unions, trades, and membership organizations.

3) Find new problems to solve. Upper and middle class Americans with good credit have extensive access to affordable transaction, savings, and loan products. Done. Problem solved. Just as the world doesn't need another reality television show, coffee shop, or American Idol, we don't need another run of the mill financial institution. Start by reaching out to the 60 million Americans who are either unbanked or underbanked. Train staff to offer the services members need instead of the ones you want them to have. Put yourself in your members' shoes to uncover day-to-day problems credit unions may be able to help with. Launch.

4) Fix your pricing. We price products like we're banks. We're not banks.

5) Cheer up. We're special organizations trying to do special things. One of the best things we have had going for us over the past 75 years is our optimism. Don't lose that.

The Perfect Game

2010-06-03T13:15:00.000-07:00

Jim's day started with him standing in front of thousands of angry people and a chorus of boos. Just the day before, he had committed one of the most notorious workplace blunders of all time. It's one thing for a small time employee in a small time industry to make a mistake. Behind closed doors. With an insignificant project.

This was different.

This screw-up was by one of the best in the business. On national television. In one of the most significant moments in his industry's storied history. In the most important moment of Jim's professional life, he got it wrong.

But there he was the next day, back at work and committed to doing better. As he was handed the Detroit Tigers' lineup card he looked up to see the face of Armando Galarraga and hordes of television cameras. If the news coverage and memories of yesterday weren't enough to drive a man to the breaking point, this moment was. A sea of boos produced a river of tears; Jim Joyce was overcome with emotion.

There have been only 20 perfect games pitched in the history of Major League baseball. Galarraga, a talented, but largely unknown pitcher with only 12 innings pitched all season long, was one out away from becoming the 21st when Jason Donald hit a grounder down the right side of the infield for the 27th consecutive putout.

But it wasn't meant to be.

From Jim Joyce's vantage point, Donald had beaten the throw to first. So, Joyce did what umpires are supposed to do when that happens; he called Donald safe.

No more perfect game.

No more no-hitter.

No more history.

The problem was...Donald was out. He was clearly out. By the time Joyce finally got to see the replay, he agreed.

"I just cost that kid a perfect game," Joyce sulked.

I couldn't imagine the pressure that an umpire is faced with in such a situation. Sure, it's part of the job, but imagine how tempted you must be on the last play of a perfect game to err on the side of the historical moment. Joyce didn't do that. He called it how he saw it. He was wrong, but he was wrong for the right reason.

What I love about this story is Joyce's integrity. He was honest with his call and upfront about being wrong. I also loved Galarraga's classy move today when he tried to console a clearly emotional Joyce at home plate. In an era of prima donna athletes and irrational fans, Galarraga knew that the boos, the threats to Joyce's family, and the media fallout were much more devastating to the umpire in this case. He understood the human element of the situation, and chose empathy over self-pity.

To me, this was a perfect game...pitching and otherwise.

Excite Innovation

2010-06-02T15:16:00.000-07:00

How could a person who never comes up with a new idea, never approves an initiative, and has no funding authority or ability become the most important person in the innovation process?

Easy.

Sometimes all an innovator needs is someone else to be excited with him/her about an idea.

Be that person.

Ghost Pots

2010-05-18T10:48:00.000-07:00

I was sent the following video today about "ghost pots" scattered about Virginia waterways. Although their name makes you think of illicit behavior at a Grateful Dead concert, ghost pots are actually crab traps that have been lost by their owners. This doesn't sound like a big deal until you consider that these pots continue to fish, and uselessly kill, as many as 60,000 bushels of crabs each year.

It makes me wonder about all of the remnants of credit union campaigns, web tools, signage, and the like that continue to fish for and kill the chances for gaining prospective members. I've been to way too many credit union websites over the past 6 months that contain dead links, dated graphics, typographical errors in the copy, poor navigation, and bad information (wrong NCUA share insurance coverage numbers, for example).

I was in a Twitter argument (Twargument?) the other day with a prominent financial advice writer who claimed that credit unions are behind the times when it comes to adoption and deployment of new technology. This claim is definitely bogus. When you look at Verity Credit Union (first financial services blog), Vantage Credit Union (first financial institution to deploy Twitter-hosted banking), Mt. Lehman Credit Union (their list of firsts is a mile long), and the vast number of "firsts" credit unions have been responsible for in technology over the years, it's hard to argue that we have been anything short of pioneering in this area. However, number of credit unions whose websites and technology are stuck in 1994 take the public's attention away from that fact.

Like it or not, we all reflect on one another. We need to do a better job of cleaning up our own shops...and a much better job of helping each other do the same.

Cherry Coke Zero

2010-05-17T19:28:00.000-07:00

There are many things for which I should thank Jimmy Marks. Not the least of which is the following tweet:

Still not sure how this drink has no calories (and scared to find out if I'm risking something much more important than a little bit of tubbiness), but it is heavenly.

Charging with the Times?

2010-03-26T21:17:00.000-07:00

News International Group has announced that it will start charging £2/week to access The Times and The Sunday Times Online. While I'm not well versed on exchange rates, I'm pretty sure that £2 isn't free.

I'm not surprised by this news (Rupert Murdoch has been promising this move would come for almost a year), and fully expect that major media outlets in the United States follow suit in short order.

I'll be the first to admit I'm a cheapskate. I rely on free online services all day long. From Blogger to Twitter to Wordpress and the rest of the web, I expect "free" and make the most out of it. I also provide "free" on a regular basis (priced appropriately, usually). I seek out "free," expect "free," and love "free."

I suspect that many of you do too.

We're so used to "free" that if we were actually forced to (gasp) start paying for things like online news, social networking sites, popular blogs, and search engines we'd probably convince ourselves that the world is coming to an end. And just as the land of the free has decisively turned its back on the free market, I wonder how long we can afford (both from the consumer side and the business side) to keep on rocking in the free world?

How much longer can credit unions afford to offer free checking? Free membership? Free online services?

The next big thing in financial services innovation may not come in the form of a new gadget, new software, new charter, new savings account, or new branch layout. Instead, it could very well come in the form of a pricing strategy that (finally) eliminates the phrase "loss leader" from our lexicon.

What's Your Credit Union's Chant?

2010-03-24T20:00:00.000-07:00

FrugalDad retweeted a link to this video today. It made me think about what being remarkable means. Some of you will think that Utah State's cheer is obnoxious. Others of you will think it's the best thing since sliced bread. Either way, I bet it gets a reaction out of you.

What is your credit union doing to be remarkable? Better question: is your credit union willing to take the risk that being remarkable requires?

What are they saying?
Yes that is a score board!
Is that not a 74?
Yes that is a 74!
Is that not a 62?
Yes that is a 62!
Is that not the winning team?
Yes that is the winning team!
Is that not the losing team?
Yes that is the losing team!
WINNING TEAM! LOSING TEAM! WINNING TEAM! LOSING TEAM! WINNING TEAM! LOSING TEAM! WINNING TEAM! LOSING TEAM

(hat tip to Buster Sports for the lyrics and link)

We Did It!!!

2010-03-20T20:00:00.000-07:00

Several weeks ago, I saw this tweet from Jason Lindstrom (@cusperhero):

The link went to the following ad:

With the national unemployment rate in the U.S. still at 9.7% (and a staggering 12.5% in Jason's home state of California), it should not be surprising that someone you or I know has lost his/her job. What is surprising to me is that credit unions have allowed talent like Jason remain free agents for so long. Robbie Wright wrote a great post just this week about this very topic.

Former Indiana University basketball coach Bob Knight was asked by an executive for the Portland Trailblazers prior to the 1984 NBA draft (paraphrasing) "Who do you think we should pick?" Knight responded, "You have to pick Michael Jordan." The Trailblazers executive said, "But we need a center." Knight said, "Play Jordan at center."

Talent is talent. There is absolutely no justifiable reason that we are not gobbling up talent like Jason's.

If hard work, experience, education, and a portfolio full of accomplishments can't keep Jason from becoming unemployed, it can happen to any of us. That's why this story struck me so hard. I couldn't imagine losing my job, and living with the reality that I may not be able to support my family. I couldn't imagine feeling that the industry that I gave all of my heart and soul to for so many years would simply turn its back on me.

So, I made an attempt to raise the money necessary to help Jason place his ad in the Credit Union Times. My thought was simple. If 500 credit union people were to contribute only $3/each, we would be able to make this happen for one of the truly great ambassadors our movement has. Simple, right?

$261 was quickly raised by some of the most generous people on this planet. I remember seeing the donations come in and thinking, "Wow! This is going to work!" This was going to be further proof of the power of social media and the cooperative spirit of credit union people.

Alas, I wasn't able to excite enough people about donating. No one likes to fail, and I'll be first to admit that I didn't take this very well. My mind quickly assumed the worst. I questioned the cooperative spirit of credit union people. I questioned my role in credit union social media. I questioned what has happened to empathy, the golden rule, and perspective.

Then, like has happened over and over in my young career when my nearly ever-present optimism goes astray, I got a call from Jeff Hardin that fixed my perspective. "Let's give it another shot," he said. "Maybe we aren't leveraging the right networks." He talked me into launching the fundraiser again, and reached out directly to the CUDE Islandwood class of 2009 that Jeff and I attended together (Jason was a mentor at our program).

Through this revived effort, we were able to raise enough money to place Jason's ad for four weeks!

I hope credit unions see the ad and make the wise move necessary to keep Jason in the movement. It's ridiculous that in a time of such high unemployment that credit unions aren't reexamining every position in their organization, weeding out anyone but their top performers, and filling those positions with the amazing amount of top-notch talent available in the job market.

I couldn't be happier about what 25 very special people contributed to make this possible. While the project won't be deemed a complete success until Jason finds a suitable position, this small display of credit union people taking care of their own gives me hope. I have been asked not to disclose the names of many of the donors, but let me say from the bottom of my heart a sincere "Thank You" to you all.

Some happy and not so happy takeaways from this program:
1. DE is a powerful network.
2. Jeff Hardin is solid gold.
3. The 20/80 rule is alive and well.
4. Storytelling is important. I didn't do a good enough job telling the story about why it was important to help with this initiative.
5. Don't give up.
6. The people who care matter (and get too little of our attention).
7. The people who don't care don't matter (and get way too much of our attention).
8. Credit unions need to make sure that they have the right people on staff, and aren't letting the big one get away.
9. Email still works.

We're crossing our fingers for you, Jason!

Don't Be Shy

2010-03-15T16:47:00.000-07:00

Shyness doesn't accomplish much. The old saying "nice guys finish last" really should be "shy guys finish last." I saw this picture today that proves my point.

Ondine Irving has singlehandedly put credit unions in the national spotlight with her relentless efforts to get financial advice guru Suze Orman's attention about credit union credit card programs. It worked. Before long, Orman was singing the praises of (most) credit union card programs in places such as the Suze Orman Show, Larry King Live, and Morning Joe.

It all started with Twitter. Ondine tweeted to @SuzeOrmanShow tirelessly...to the point that I started to think she was a little bit off her rocker. I was lucky enough to interview her last December for my "Ideas in Action" podcast series and met her finally at GAC last month.

Here's what I learned. Ondine has consumer advocacy in her blood. Her sole focus is and has always been to help credit unions create the most consumer-centric credit card programs possible. She's built a career off of making card programs work for credit unions and their members, and passionately pursues the spreading of that knowledge. She refused to sit idly by when she watched Suze Orman talk about the shady practices of bank credit card programs without suggesting her viewers consider credit union programs as a better alternative.

Thank goodness Ondine wasn't shy.

The Financial Brand's Jeffry Pilcher tweeted the other day that Ondine "has done more for the CU industry than the industry has done for itself in the last ten years."

That statement seems hyperbolic, but it may not be. There are few things I can readily think of during that time period that carry the weight of Ondine's Credit Card Connection. For the credit unions smart enough to take advantage of it, it has meant millions of new eyeballs checking out their wares.

The purpose of this post is to sing the praises of Ondine, make no mistake about it. But more to the point, it's to encourage you to run with your idea. Sharpen your focus. Shamelessly pursue it.

Don't be shy.

Looking Like a Fool...

2010-03-08T07:36:00.000-08:00

February 8, received an email from Tim McAlpine entitled "Gut Check." He and DeAndré Upshaw had come up with an idea for a contest that, in Tim's mind, could spell either professional disaster or endless entertainment. The contest was to encourage people to submit a music video about moving your money from a bank to a credit union, taking inspiration from General Larry Platt's wildly amusing "Pants on the Ground" audition for American Idol. The launch of the contest would capitalize on the Move Your Money movement, which encourages people to ditch big banks for credit unions and community banks.

"Awesome and fun OR awful and suicidal?" Tim asked.

A user-generated video contest based on "Pants on the Ground" and Move Your Money?! I called him almost immediately, saying "do it...it's a great idea!"

I'm sure I had nothing to do with his decision (his intuition about things like this is vastly better than mine), but he went live with his contest the very next day.

Six days later? Crickets. No entries. Very little discernible buzz.

"Fruitcake!" I thought. I had emphatically encouraged a good friend to launch a dud.

I panicked, and decided to create a video so he would have at least one submission. I studied the "Pants on the Ground" lyrics, modified them to fit the contest rules, and recorded a Credit Union Warrior version of "Money in the Bank" (complete with falsetto background vocals that will make you either laugh or hurl). I threw together a video to go with the song, and became the first entry in the contest...almost my apology for leading Tim astray.

It just goes to show you how crazy our expectations and levels of patience have become. The contest was a great idea, and (despite what I feared) there was significant buzz. Deciding whether or not to enter a contest takes time. Creating content takes time. Often, when you launch a thing like this you lose sight of those important points.

Within weeks, the Money in the Bank contest had received 14 entries...all of them packed with personality, energy, and even some catchy tunes. Two videos were posted on the very popular Move Your Money blog, tens of thousands of people visited YoungFreeHQ.com, and the participants had a blast.

Being remarkable sometimes means risking "looking like a fool." Currency Marketing is remarkable.

Voting starts today. Make sure you exercise your civic duty.

NASCAR's Worst/Best Case Scenario

2010-02-15T07:52:00.000-08:00

You would think that Atlanta Motor Speedway would have no trouble filling its stands for NASCAR events. Deep in the heart of racing country and one of the sport's largest population centers, the track has nonetheless had some well-documented struggles with paid attendance. And on the heels of a surprising (and considerable) bad year overall for the sport, one would forgive you for being less than optimistic about the possibilities of a sold out Kobalt Tools 500 on March 7.

Atlanta Motor Speedway had to do something to inject some life into their event -- get people talking and inspire them to make the trip out to the track. Driver Jamie McMurray (and a bunch of potholes) made that happen for them by making an old promotion remarkable.

Several years ago, the track's promoters tried to leverage the crowds and timing of racing's most popular event by offering a limited number of tickets to their event at the price of the car number that wins the Daytona 500 (standard tickets are $89). They knew that millions of NASCAR fans would be glued to their televisions for the Daytona 500 (20 million viewers tuned in for the 2006 event), and another 200,000 or so would be in attendance. Two years ago, Ryan Newman (#12) saved fans a ton of money by winning the event. Last year, Matt Kenseth (#17) was pretty helpful with his win as well.

But yesterday, Jamie McMurray inspired me, decidedly NOT a NASCAR fan, to think about the Kobalt 500. McMurray pulled out a surprise win at the "Super Bowl of NASCAR" in his Bass Pro Shops Chevrolet...car number 1.

Credit unions often talk about the "worst case scenario" when they come up with a new promotion. Usually, these discussions center around the idea that if their promotion is too successful "it will cost X." This is a necessary discussion, don't get me wrong. But what is the cost of being bland? Unremarkable?

Atlanta Motor Speedway realized their promotion's "worst case scenario" yesterday. With 2,000 tickets now available for their race at $1 each, the track will make $32,000 less on these seats than they did last year.

But we're talking about them. Had any other car won, we wouldn't be. This, in my mind, was the promotion's "best case scenario".

Is your credit union afraid of success? To me, "safe" bets with your marketing budget cost a lot more than "worst case scenarios."

Off Topic: Cloudy with No Chance for a Point

2010-02-11T19:13:00.000-08:00

One of the most underrated aspects of being a parent of a toddler is having a legitimate excuse to watch cartoons. Tonight, I watched a movie called "Cloudy with a Chance for Meatballs." If you actually want to watch the movie, skip the rest of this post because I'm going to spoil it for you.

The story basically goes like this: a kid named Flint is a creative genius, but his inventions always end up having pretty awful unintended consequences. Truth is, most of the inventions just really aren't that good. That is, until he creates a machine that, after launched into the sky, makes the sky rain food. Hamburgers, pizza, bacon, eggs, steak, and even ice cream fall out of the sky to the very appreciative citizens of Swallow Falls (who theretofore had to eat sardines for every meal).

Flint's a hero.

Everything's cool for the island until the machine starts creating food tornadoes, hurricanes, and raining larger and larger food items. Flint's invention, the very one that made people love him and excited people across the globe about visiting Swallow Falls, makes him public enemy number one. The island is virtually destroyed.

Flint's a bum.

Those of you who have read my blog over the years know that here is the part of my posts when I typically try to create a connection to the credit union world. I was all prepared to make a point or two about the innovation process, our short attention spans, and risk aversion. Instead, I'm going to tuck my son in and go to bed.

Oh, and don't worry...Flint ends up saving the day, gets a girlfriend, and ends up getting his stoic dad to admit he loves him. All's well.

Encouraging Disruption

2010-02-08T11:55:00.000-08:00

I wrote a post called "Encouraging Disruption" for the Filene Research Institute blog last week. If you haven't checked it out yet, see it here: http://filene.org/blog/post/encouraging-disruption.

Help a Credit Union Friend Out

2010-02-05T10:18:00.001-08:00

**UPDATED March 16, 2010** GREAT NEWS!!! The $506 we have raised through this initiative plus the miracle contribution from an angel donor have given us the necessary funds to run Jason's ad for 4 weeks!! I will be writing a blog post about this soon, but until then please know this: you all are wonderful human beings! I keep trying to put myself in Jason's shoes, and keep wondering what it would be like if I lost my job and no one went to bat for me. Clearly, credit union people take care of their own...thank you so much for reminding me of that. More details coming soon, I promise.

**UPDATED** A new campaign has started. $261 was raised in our first attempt. I refuse to believe we can't get enough people to donate $3-$5 to make this happen for a true credit union leader. Please try to imagine yourself in a similar situation. Now imagine the comfort you would feel if you knew there were others out there looking out for you.

Please help Jason Lindstrom get this ad placed in the Credit Union Times:

If 500 of us put $3.00 a piece in, we'll have enough. Maybe the Credit Union Times will give us a discount on that ad price as well...

Even better, if you know of an open position within the movement that would fit his talents/skills please pass that along as a comment to this post. Unemployment isn't fair for anyone, especially someone as talented, experienced, and well-rounded as Jason.

Jason Dias Throws Down the Guantlet

2010-01-25T14:24:00.000-08:00

Some articles make you say "hmmmm." Some make you say "duh." Others make your eyes get big, your jaw drop, and your hands fidget. The following Op-Ed piece by Jason Dias did exactly that to me. Read it. Internalize it. React to it. I'm curious to hear your thoughts.

Full story.

Why Gen Y Show with Deandre' Upshaw

2010-01-22T20:22:00.000-08:00

I was a guest on the Why Gen Y Show at youngfreehq.com this week talking about how credit unions can help young adults by paying attention to life events and unique ways to address them.

New York Life's Promises Fulfilled

2010-01-04T18:45:00.000-08:00

If I were to make a list of the things I'd least like to do, shopping for life insurance would rank somewhere between watching a weeklong marathon of Jersey Shore and piercing my own tongue with a rusty drywall screw. Nonetheless, here I am just over two days from the birth of my second child, and that's what I find myself compelled...err obligated to do (the life insurance part).

Without going into the particulars associated with this chore, I wanted to show you a feature that I noticed on New York Life's website. On the bottom-right of their homepage, they have a graphic that shows "Promises Fulfilled." It shows the amount that the insurer paid to policy-holder beneficiaries during the current day and year. While it's kind of a morbid thought (either lots of people died or just a few really rich people), it's certainly a direct way to illustrate that New York Life is making good on the services it claims to offer.

Although I likely won't buy life insurance from them (would have, but they make "bankers hours" seem oppressive), I love this feature and think credit unions could implement a similar graphic to quickly communicate impact. A few years ago I suggested that credit unions disclose their impact on members with transaction receipts, which would certainly work on an individual member level. But what if you were to display a daily count of, I don't know, dividends paid, dollars saved, dollars lent, bank fees our members didn't have to pay, and/or taxpayer bailout dollars received? Part American Debt Relief Challenge and part McDonald's' "90 Million Hamburgers Served"...there's an idea here, I swear.

What Should Keep You Up at Night in 2010

2009-12-29T21:05:00.000-08:00

A guy named Steve has been a member of your credit union for 15 years. He was an upholsterer employed by one of your original SEGs until four months ago, when he (along with 200 of his co-workers) was laid off. While he never earned much while he was working, never maintained much more than a $400 balance in his checking account, and often cashed his check upon receipt, Steve opened (and paid as agreed on) no fewer than eight different loan accounts at your credit union over the years.

Although it's been a little rough, Steve's family has been able to scrape by on federal unemployment benefits and a thrifty lifestyle. Their savings and checking accounts have been completely depleted, but they are able to afford food, their $700/month mortgage, and necessary utilities.

Yesterday, Steve's widowed mother passed away. This wasn't really a surprise. She'd been very sick for years. Still, the loss couldn't have come at a worse time emotionally or financially. She had no assets to speak of and now Steve's family is left with trying to figure out how to pay for the funeral, travel expenses to her hometown 350 miles away, and not end up starving or out on the street.

They would sell their house, but they owe $150,000 on the mortgage and similar houses in the neighborhood have been selling for $115,000.

What should be keeping you up at night in 2010 isn't interchange legislation, corporate meltdowns, the Credit CARD Act, Reg Z, or a national credit union branding campaign. Instead, as a leader in the credit union movement what should be keeping you up in the coming year is how you can help Steve and his family get through this painful time. Maybe you do it with traditional services. Maybe you do it with new innovations. But you need to address this problem.

I worry about middle America. I worry about decades of over-spending, under-saving, and apathy concerning financial literacy. I worry about the lack of personal responsibility in our society. I worry about business models that are built on deceit. These are significant concerns that require significant resources if we have any hope of changing their courses for the better.

What I worry about most, however, is that these concerns will take precedence over Steve's. If you can help Steve, there are at least 15.4 million additional Americans that have been looking for a financial institution, and a conscience, like yours.

Is "character" still an important "C" of credit at your credit union? What will the reaction be as Steve sits across from your loan officer and asks for a $3,000 loan to make ends meet? Is the capital your credit union has grown over the years for your rainy days or your members' rainy days?

Bloody Labels and Second Chances

2009-12-16T19:17:00.000-08:00

When I was 18, I worked in a factory that printed plastic labels for laundry detergent bottles, juice containers, shampoo bottles, and various other consumer products. My job (I couldn't make this up if I tried) was to wipe the dust off of giant sheets of labels with a rag-wrapped block of wood. Eight hours a day, five days a week you could find me doing the Mr. Daniel Larusso-esque wax on wax off technique in the corner of the production floor.

I was convinced that I had finally made it.

That is, until the day that I actually did make it. One day, the production manager asked if I could assist with the die-cutting machine. Albeit temporary, I saw this as the first "promotion" I had ever been offered. I jumped at the opportunity and committed myself to doing such a great job that the dusting table would forever be in my rearview mirror.

The die-cutting machine split large, rectangle-shaped stacks of labels into two stacks of labels along a contoured line. This was the second-to-last step in the label-making process, which culminated with a final pass through another die-cutting station, shrink wrapping, and boxing for delivery. My job was to grab the fast-moving stacks of labels off of the die-cutter and stack them in large wooden crates that could be wheeled over to finishing.

The job was easy in concept, but surprisingly demanding. The better I got that first night, the faster the operator made the machine go. The production manager walked past me after an hour or so and mentioned how impressed he was with how quick we were working. He was so impressed, that he wanted to see if I could go any faster. He took over as the operator and started pumping out labels as fast as the machine could go. I could barely keep up, but somehow got through the first crate load.

Just as the operator had pushed the power button to start the second crate, I noticed a cut on the tip of my right index finger. It didn't hurt, but it was a reasonably deep cut. There was no time to worry about it, though, because the labels had already started zooming out of the die-cutter. I grabbed them as fast as I could off of the machine, stacking them neatly as I could as we went. We finished that batch even faster than the last. The production manager patted me on the shoulder and said, "Wow, I haven't been able to run this machine that fast in years! Great job!"

I was beaming. He was pleased. I was sure that I would never have to wipe a label again in my life.

Then, his eyes caught a glimpse of the crate I had just filled. His jaw dropped. My head turned to see what he was looking at. There was a single droplet of blood on each of the 300 or so stacks of labels.

"Are you bleeding?" the Production Manager asked me.

"Yeah, I think I cut myself on the last batch." I said.

His face turned red, and I could tell he was livid.

"Do you have any idea how much that crate of labels is worth?" he asked.

"No idea."

"You just cost us about $4,000!" he exclaimed.

To this day, I'm still heart-broken by this moment. I can still remember the sweat dripping down my face and my sore shoulders from trying to keep up with the machine. I can remember how hard I was trying, how enthusiastic I was about doing a great job, and how devastated I was that I had failed nonetheless.

Luckily for me, the Production Manager gave me a second chance. I'm not sure he ever forgave me, but he didn't send me back to label dusting. For the next two months (until I left for college) I became his right hand man on the die-cutter. We ran at the machine's speed capacity every single time we worked together, and I became a valuable member of the production floor.

Young people mess up. Sometimes, they mess up in very big ways. But so did you. Somewhere along the way you screwed up (yes, even you). Somewhere along the way you got a second chance, too. Remember that?

When you finally come to the conclusion that the young, up-and-comer at your credit union is worth giving a chance to...please remember to give him/her a second chance, too.

Cooperation, Collaboration, and Compromise

2009-12-09T16:59:00.000-08:00

Co•op•er•a•tion [koh-op-uh-rey-shuhn]
- noun
1. An act or instance of working or acting together for a common purpose or benefit; joint action.

Col•lab•or•a•tion [kuh-lab-uh-rey-shuhn]
- noun
1. The act of working together, especially in a joint intellectual effort.

Com•pro•mise [kom-pruh-mahyz]
- noun
1. A settlement of differences by mutual concessions; an agreement reached by adjustment of conflicting or opposing claims, principles, etc., by reciprocal modification of demands.

I hear these three words in the credit union movement over and over. I'm glad I do. After all, each is necessary for us to realize our potential, maximize our impact, and fortify our future. Unfortunately, too many credit unions do not understand their importance. Worse, the ones that do get it sometimes think that doing any of the three without the others is sufficient.

Here's why it isn't.

Cooperation amongst credit unions means that the parties involved work together with a common purpose. I believe credit unions in fact do have a common purpose. There is, however, debate over what that purpose is. Some seem to think our purpose is being the low cost leader in the financial services world. Others think our purpose is to be cooperative banks; different in structure than banks, but direct competitors. Still others believe that credit unions are charitable organizations that fund our good work in the world with financial services. Most of us believe our purpose is some combination of these three. Cooperation, full cooperation anyway, requires a clear purpose. While way too many of us are not on the same page, we are for the most part in the same book. That's a start.

But say we all worked together with a common purpose. Let's say this is it: credit unions exist to provide members with control over their financial lives through the governance of their financial institution, access to affordable financial services, financial literacy education, and community impact. A credit union whose member owners, environmental factors, resources, or board disagree with the collective purpose, or even one component of it, would feel obliged to break from the pack. This is where compromise comes in. Each participant in the cooperative ensemble must be willing to give something, anything, up for the common good. Without compromise, we cannot be cooperative.

What about collaboration? A joint intellectual effort should go like this: a bunch of credit union people, regardless of seniority, sex, title, geographic location, politics or relationship with the meeting scheduler, come together to pick each other's brains about how to tackle a problem. All ideas are taken into consideration, none trumps any other, and collectively a solution is formed from the group that far exceeds the value of a solution any single member of the group could have come up with.

But what if the solution isn't consistent with our purpose as credit unions? Collaboration can yield great ideas, but those ideas need to be put into play and need to be consistent with the entire group's purpose. The solution must be one that credit unions will embrace and pursue. Without cooperation, we cannot be collaborative.

So, how about compromise? This is a touchy subject. There are certain things we should never compromise as credit unions: our autonomy as a movement (ahem, TARP debate), our member-ownership, and our mission, for example. Working within a system, a cooperative of cooperatives, however, we must at times allow ourselves to give up certain things for the greater good. Support of the corporate system has served as a simultaneous point and counterpoint to this statement.

We can't compromise for the sake of compromise. There are some things that we simply should not budge on. This is why collaboration and cooperation become so important. How can we put our collective minds together to create solutions to current problems, cooperate under the flag of a common mission, and give up a little as individual credit unions to see our vision through?

The three C's of credit unioning are easy to say and hard to do. And, try as we might, none of them are sufficient by themselves.

CU Water Cooler

2009-11-25T05:46:00.000-08:00

My new role at the Filene Research Institute is to help credit unions put ideas into action. Interestingly, about the same time I started in this role I had an idea of my own.

I talked to Brent Dixon a couple of weeks ago about how much I miss the early days of OpenSourceCU; how when any of us wanted to learn what was going on in the world of social media, we knew exactly where to go. "What if we could build a site that would get that back?" I wondered. We brainstormed over adult beverages, and I got excited.

I called Mark McSpadden, who is always up for a technology brainstorm session. He was excited.

I called Morriss Partee, who has always been kind of like my social media big brother. He was excited, and pledged his support. I was giddy.

I bought the domain name cuwatercooler.com, and started brainstorming with Brent about themes, design, and a bunch of other things I'm a complete novice in.

I called Tim McAlpine, and told him my idea. His response? Silence. It may have only been four seconds, but it was definitely silence. "I think it could work," he finally said. We brainstormed a little, he agreed to create the logo and do the design work, and we marched forward.

I pitched the idea to George Hofheimer at the Filene Research Institute. He was excited (maybe more in response to my excitement than the idea itself), but saw the project as being outside the scope of my role at Filene. But he didn't tell me "no". So, I proceeded.

I contacted William Azaroff, Gene Blishen, Steve Delfin, Kelley Parks, Denise Wymore, Christopher Morris, Christopher Stevenson, and Doug True. They all said they were in.

Today, we launch www.cuwatercooler.com. I spared you the details about the site because I want you to see and experience it for yourself. (Also, I wrote more about the concept here). The idea is less than three weeks old. It's not perfect, and will most certainly change. But it's live, and can start making an impact now.

I hope you enjoy the site, and realize the power of putting ideas into action.

Turning the Page

2009-11-06T08:07:00.000-08:00

In November 2003, my wife (girlfriend at the time) was in her final year of graduate school at Wake Forest University. We had been dating for five years by that point, but for the previous year and a half she and our English bulldog, Leota, had been living in Winston-Salem, NC, while I lived and worked north of Richmond, Virginia. Living so far apart was taking its financial and emotional toll, so I constantly kept my eyes open for career opportunities that would allow us to remedy our situation.

I found and responded to an ad in the Winston-Salem Journal for a Director of Public Relations position at Members Credit Union in Winston-Salem, North Carolina. This was an interesting choice for me. Working in the financial services sector had never been appealing to me. In fact, even though the dot-com crash destroyed the job market for college students as unfortunate as I was to graduate in 2001, I simply refused to meet with recruiters from large banks, investment firms, and the like. I knew very little about credit unions, even though I had been a longtime member at Indiana's Centra Credit Union. I knew even less about Members Credit Union, Winston-Salem, public relations, and even North Carolina.

I didn't get the job.

Members Credit Union hired another applicant instead of me, but offered to make me her assistant. I accepted, and did the best I could to absorb everything I possibly could about credit unions, public relations, financial services, and marketing. I learned about the credit union structure, and how Members Credit Union carefully followed the most sacred of credit union philosophies. Although we offered the latest in financial services technology, this was a traditional (read: wonderful) credit union that insisted on putting people over profit, serving the community, keeping deposit rates high and loan rates low, financial literacy education, and treating employees well. I had found a home.

After only a few months, my boss suddenly resigned. I was lucky enough to be selected as her replacement. In the nearly six years since, I have been blessed to serve a credit union that truly understands, and lives, the credit union difference. Members Credit Union is conservative with lending and investments because we see the credit union's assets as our members' assets. Steady growth, we have always argued, is much more desirable (and responsible) than forced, expensive, and risky growth. Thanks to the careful guidance of our management team and volunteer board, we have always run a lean organization. We have always been open to new ideas, but insist that they be implemented with as little hard dollar costs as possible.

At times, the lack of budget dollars has been frustrating. Looking back, however, I would say that this experience was the greatest thing that could have possibly happened for my personal and professional development. They say that need is the mother of invention, but I'd argue that under-funded passion is. When you don't have the budget dollars to implement an idea, what do you do? Well, if you believe in the idea, you do anything you can to make it work within the budget. You read as much as you can. You work as hard as you possibly can. You connect with people with expertise on the subject. You teach yourself things that you never knew you would ever have a chance to learn. You work every relationship with every person outside of your organization to see your idea get its first breath of life.

This mindset has kept me interested in credit union innovation. It has convinced me that credit unions of all sizes and budgets can implement ideas they are passionate about. It has proven to me that the credit union difference is alive and well. It has allowed me to get to know many of you.

Today is my last day at Members Credit Union.

On Monday I start an 18-month contract with the Filene Research Institute to help credit unions across the globe learn about, implement, and create financial services innovations. Over the years, Filene's i3 Program has researched and created game-changing programs to help credit unions better serve, engage, and appeal to consumers. My goal will be to help as many credit unions as possible deliver these programs to their fields of membership.

This is a dream come true for me, and as close to a perfect professional fit I could ever hope to find for myself. I hope I've proven over the years that I deeply love credit unions, am a total financial services innovation nerd, and walk the talk when it comes to credit union cooperation and collaboration. This position will allow me to live and breathe my passions, while surrounding me with co-workers that I have always truly admired.

I'll miss Members Credit Union dearly, but can't wait to start this next chapter in my career. I hope you'll continue to be a part of it.

Trick or Treating for Members

2009-10-27T18:52:00.000-07:00

A funny thing happened at my son's gymnastics class. I mean, let's face it, a TON of things were funny about gymnastics - imagine 18 toddlers between the ages of 18 months and three years tumbling on dance mats, jumping on trampolines, walking through an improvised "haunted house," and chasing each other with fake snakes, spiders, and bugs.

No, the funny thing that inspired this post was what the instructor handed us as we walked out. Miss Brittney handed each child an orange legal-sized sheet of paper with twelve "Free Class" passes printed on it to hand out for Halloween. Production cost? Maybe $1. Possible reward? 216 new paying customers and $11,800 in recurring monthly revenue. Put that in your ROI pipe and smoke it.

The beauty of this idea goes well beyond its price tag and simplicity. Think about how well Salem Gymnastics Sports Center has targeted its audience. Who will be receiving these passes while trick-or-treating? Where do they live? How likely is it that this pass will stick out in a jack-o-lantern full of candy?

Why not go trick-or-treating for members? Would your members be willing to be your credit union's evangelists this weekend? Do you have a compelling offer that will appeal to parents of young children in your members' neighborhoods?

What do you have to lose?

Become an Ex

2009-10-19T18:03:00.000-07:00

Just before tonight's Monday Night Football game, I saw an interesting ad. A woman was sitting at her office desk talking on the phone while simultaneously mixing an adult beverage. As she walks out with her freshly-mixed daiquiri, the narrator says "You don't drink every time you smoke... So why do you smoke every time you drink?"

The message is simple. Eliminate the triggers that create your urge to smoke, and you can kick the habit.

The campaign is a product of the American Legacy Foundation, a collaboration of organizations dedicated to helping people quit smoking. Its web presence (built with Ning) is simple, yet effective. There, you can learn about smoking triggers, nicotine addiction, and success stories from peers. You can network with others who are struggling just like you, set a quit date, and track the cigarettes you smoke (and what triggered them). The 3-Step process is: 1) Re-learn your habit; 2) Re-Learn your Addiction; and 3) Re-Learn Support.

I'm not a smoker, but this program really captures my attention. It's brilliant in its simplicity, and 100% applicable to what most of us are trying to do at our credit unions: improving human behavior.

Could we inspire people to "Become an Ex" bank customer? What are the trigger points that cause people to, despite excessive fees, distrust, and dissatisfaction, continue to flock to goliath banks? Is it inertia? A habit? Apathy?

Could we encourage people to "Become an Ex" spendaholic?

Could this be our national brand?

The Box in the Garage

2009-10-15T17:52:00.000-07:00

He was there all along. The "boy in the balloon," as we now know him, traveled nary a few dozen steps to the attic in his family's garage, and simply hid in a box.

The rest of us were looking skyward at a weather balloon about which Area 51 would be proud. We wondered if the cute little boy with the eccentric parents had survived. Was he in the balloon? Had he fallen to his tragic death?

We were so preoccupied with what was high up in the sky, we ignored what was right under the Heene family's collective nose.

We shouldn't be surprised by this phenomenon. It's nothing new. The drama, imagination, and potential tragedy that was unfolding live on television of a balloon floating through the sky was much more interesting than the story of a boy safely hiding in a box. That's why it grabbed our attention so firmly.

We've wasted so much energy in the last 12 months worrying about corporate credit union investments, the Credit CARD Act, alternative capital, a decline in consumer loan demand, and surging loan losses, that I wonder if as a whole we have maybe lost sight of what's right under our noses. As credit union leaders, we have no choice but to think about worst case scenarios, the realities of the economy, and the uncertainty of an ever-changing regulatory environment. We'd be irresponsible if we didn't. But we also have to make sure our focus isn't stolen from us by the extraordinary.

There's a box in the garage that deserves much more attention.

Waiting on Perfect

2009-10-14T17:59:00.000-07:00

I see it all the time. Heck, I live it. Too many of us are waiting on perfect. We wait for the perfect idea. The perfect opportunity. The perfect applicant. The perfect proof.

We spend so much time waiting on perfect, that we miss the good, the great, and the fascinating. One of the few things more boring than perfection must be the quest for it.

How about, starting today, you make a change? Instead of criticizing, scrutinizing, and dismissing the imperfect, why not decisively pursue the really good? Vigorously improve the good to be great. Continuously tweak the great. You'll never reach perfection this way, but you'll be a lot more successful than if you were to keep on waiting on perfect.

Painting Ourselves into a Corner

2009-10-11T19:20:00.000-07:00

I saw an infomercial today for Point 'n Paint, an amazing little gadget that allows you to "paint an entire room in less than an hour." As someone who has done his fair share of painting, I watched with great interest as the commercial demonstrated how this "best edger ever" gets "perfect results every time." To think, I could have saved hundreds of dollars, countless work hours, and three quarters of my sanity had I simply known about this $19.95 painting innovation.

As great as this gadget looks, there is no way in Albuquerque I'm going to buy one. Here's why:

1. I don't trust the message. It looks too good to be true (and turns out it probably is based on the reviews here and here [warning, foul language]). Painting sucks. If you tell me that you can make it not suck, I don't believe you. Tell me that you'll make it suck less, and you have a shot. But, it will ALWAYS suck.

2. I don't trust the salesperson. I don't know a thing about Anthony Sullivan except that I don't trust him. He looks like a con artist, and sounds like a con artist. The last time I bought something from a guy like him, I ended up with a tub of OxiClean that is just this side of useless.

3. I don't trust the medium. Infomercials are sketchy. You could have the most legitimately useful product on the planet at the perfect price, but the second you use an infomercial to sell it I go into full skeptic mode. The ads are cheesy. The settings are typically fake. The "demonstrations" are unreliable. You could be selling $50 bills for $19.95 with an infomercial, and I would probably still turn the channel.

The amazing thing? This is a $19.95 purchase. Think about what goes through consumers' minds when they see financial services marketing, where trust means everything and the price tag is much higher than a sack full of Sham-Wows.

Say, for the sake of argument, that Point 'n Paint is the biggest innovation to hit the painting world since Bob Ross. Their marketing is more suitable for a county fair midway than a Home Depot sales floor. Its marketing team sacrificed credibility and trust for quick sales. I'm not buying it, and chances are you aren't buying it either. At least not because of an infomercial.

True innovations get noticed by thought leaders. I'd buy it when my best friend's painting company decides to toss out his paint rollers in favor for this product. I'd buy it if I saw David Bromstad use it on his show because it saves him tons of time and works well.

Is your credit union painting itself into a corner with its marketing? Are you searching for a quick sale, or a relationship? Are you the one saying "But wait, there's more," or are you giving members reasons to tell their networks for you?

Management Changes: Knowing When to Say When

2009-10-06T19:35:00.000-07:00

The Tampa Bay Buccaneers, Kansas City Chiefs, and Buffalo Bills decided to fire their offensive coordinators before the 2009 season. This isn't that uncommon in the National Football League. General Managers, Coordinators, and Head Coaches are paid something in the neighborhood of Russia's Gross National Product to be responsible for getting many millions of dollars worth of assets (players) to perform well enough to fill the stands, sell merchandise, and keep fans interested in the franchise they represent. These are high risk, high reward positions that can earn the incumbents many millions of dollars and the respect of the masses, or a sudden pink slip and a one-way ticket on the next thing smoking.

What is uncommon, however, is firing such high profile/impact personnel in the middle of preseason -- mere weeks before the regular season is to begin. That's exactly what these teams did. Some sportswriters praised the moves. Bucky Brooks said, "The unexpected dismissals of three offensive coordinators on the eve of the regular season has unquestionably rankled the NFL landscape, but the preseason is an evaluation period, and even assistant coaches can't escape the scrutiny of evaluators looking to field winners in 2009."

Winners in 2009, eh? So far, the Buccaneers, Chiefs, and Bills are a combined 1-11. The only win enjoyed by this group of under-achievers came when the Bills defeated the Buccaneers in week 2. In effect, these teams are 0-10 against teams that did not fire their offensive coordinator in the preseason.

My take? Managers are only as good as their last "season." They deserve huge rewards when they succeed, and deserve to get canned when they don't. That said, a change in leadership is not something you can approach on a whim. You can't spend an entire preseason training your team a particular style of play, using a specific leadership style, and making personnel decisions to support those styles, then completely change course when the bright lights of the regular season get turned on. There certainly are examples of mid-season management changes in sports that have worked out swimmingly, don't get me wrong. But often, these in-season moves simply make bad situations worse. Major management changes should only take place, barring blatant misconduct or mutiny, after the conclusion of a season. Preferably, such a move should be made as quickly as possible to maximize the preparation time for the replacement manager going into the following season.

At credit unions, we don't have set seasons. Sure, we have annual and sometimes semi-annual reviews. We host planning sessions with our boards. We have board meetings on at least a quarterly basis. Is that enough? How can you organize your credit union's operations into seasons so you can reward managers who are productively leading your team in the right direction? How can you replace non-performing managers with as little disruption as possible?

Answering these questions properly may be the difference between steering your team in the right direction...and another disappointing season.

The Keith Leggett Watch - Part Deux

2009-10-01T13:33:00.000-07:00

Keith Leggett is at it again. It seems that he wants his nineteen readers to read about every single credit union failure as they happen. His most recent post celebrates the failure of Victorville, California's Members' Own FCU.

Let's see...

National Bank of Commerce, Berkeley, IL., January 16, 2009
Bank of Clark County, Vancouver, WA., January 16, 2009
1st Centennial Bank, Redlands, WA., January 23, 2009
Ocala National Bank, Ocala, FL., January 30, 2009
Suburban FSB, Crofton, MD., January 30, 2009.
MagnetBank, Salt Lake City, UT., January 30, 2009
County Bank, Merced, CA., February 6, 2009
Alliance Bank, Culver City, CA., February 6, 2009
FirstBank Financial Service, McDonough, GA., February 6, 2009
Pinnacle Bank of Oregon, Beaverton, OR., February 13, 2009
Corn Belt Bank & Trust Co. Pittsfield, IL., February 13, 2009
Riverside Bank of the Gulf Coast, Cape Coral, FL., February 13, 2009
Sherman County Bank, Loup City, NE., February 13, 2009
Silver Falls Bank, Silverton, OR., February 20, 2009
Heritage Community Bank, Glenwood, IL., February 27, 2009
Security Savings Bank, Henderson, NV., February 27, 2009
Freedom Bank of Georgia, Commerce, GA., March 6, 2009
TeamBank, NA, Paola, KS., March 20, 2009
Colorado National Bank, Colorado Springs, CO., March 20, 2009
FirstCity Bank, Stockbridge, GA., March 20, 2009
Omni National Bank, Atlanta, GA., March 27, 2009
Cape Fear Bank, Wilmington, NC., April 10, 2009
New Frontier Bank, Greely, CO., April 10, 2009
Great Basin Bank of Nevada, Elko, NV., April 17, 2009
American Sterling Bank, Sugar Creek, MO., April 17, 2009
American Southern Bank, Kennesaw, GA., April 24, 2009
Michigan Heritage Bank, Farmington Hills, MI., April 24, 2009
First Bank of Beverly Hills, Calabasas, CA., April 24, 2009
First Bank of Idaho, Ketchum, ID., April 24, 2009
America West Bank, Layton, UT., May 1, 2009
Citizens Community Bank, Ridgewood, NJ., May 1, 2009
Silverton Bank, NA, Atlanta, GA., May 1, 2009
Westsound Bank, Bremerton, WA., May 8, 2009
BankUnited, FSB, Coral Gables, FL., May 21, 2009
Strategic Capital Bank, Champaign, IL., May 22, 2009
Citizens National Bank, Macomb, IL., May 22, 2009
Bank of Lincolnwood, Lincolnwood, IL., June 5, 2009
Fist National Bank of Anthony, Anthony, KS., June 19, 2009
Cooperative Bank, Wilmington, NC., June 19, 2009
Southern Community Bank, Fayetteville, GA., June 19, 2009
Mirae Bank, Los Angeles, CA., June 26, 2009
MetroPacific Bank, Irvine, CA., June 26, 2009
Horizon Bank, Pine City, MN., June 26, 2009
Neighborhood Community Bank, Newman, GA., June 26, 2009
Community Bank of West Georgia, Villa Rica, GA., June 26, 2009
First National Bank of Danville, Danville, IL., July 2, 2009
Rock River Bank, Oregon, IL., July 2, 2009
John Warner Bank, Clinton, IL., July 2, 2009
First State Bank of Winchester, Winchester, IL., July 2, 2009
Elizabeth State Bank, Elizabeth, IL., July 2, 2009
Millennium State Bank of Texas, Dallas, TX,July 2, 2009
Founders Bank, Worth, IL, July 2, 2009
Bank of Wyoming, Thermopolis, WY, July 10, 2009
Temecula Valley Bank Temecula, CA, July 17, 2009
Vineyard Bank Rancho, Cucamonga, CA, July 17, 2009
BankFirst, Sioux Falls, SD, July 17, 2009
First Piedmont Bank Winder GA,17-Jul-09
Security Bank of Bibb County Macon GA,24-Jul-09
Security Bank of North Metro Woodstock GA,24-Jul-09
Security Bank of North Fulton Alpharetta GA,24-Jul-09
Security Bank of Gwinnett County Suwanee GA,24-Jul-09
Waterford Village Bank Williamsville NY,24-Jul-09
Security Bank of Jones County Gray GA,24-Jul-09
Security Bank of Houston County Perry GA,24-Jul-09
Integrity Bank Jupiter FL,31-Jul-09
First State Bank of Altus Altus OK,31-Jul-09
First BankAmericano Elizabeth NJ,31-Jul-09
Peoples Community Bank West Chester OH,31-Jul-09
Mutual Bank Harvey IL,31-Jul-09
First State Bank Sarasota FL,7-Aug-09
Community National Bank of Sarasota County Venice FL,7-Aug-09
Community First Bank Prineville OR,7-Aug-09
Union Bank, National Association Gilbert AZ,14-Aug-09
Dwelling House Savings and Loan Association Pittsburgh PA,14-Aug-09
Colonial Bank Montgomery AL,14-Aug-09
Community Bank of Arizona Phoenix AZ,14-Aug-09
Community Bank of Nevada Las Vegas, NV,August 14, 2009
First Coweta Bank, Newnan, GA, August 21, 2009
Guaranty Bank, Austin, TX, August 21, 2009
CapitalSouth Bank, Birmingham, AL, August 21, 2009
ebank, Atlanta, GA, August 21, 2009
Bradford Bank, Baltimore, MD, August 28, 2009
Mainstreet Bank, Forest Lake, MN, August 28, 2009
Affinity Bank, Ventura, CA, August 28, 2009
First Bank of Kansas City, Kansas City, MO, September 4, 2009
InBank, Oak Forest, IL, September 4, 2009
Vantus Bank, Sioux City, IA, September 4, 2009
Platinum Community Bank, Rolling Meadows, IL, September 4, 2009
First State Bank, Flagstaff, AZ, September 4, 2009
First Bank of Kansas City, Kansas City, MO, September 4, 2009
InBank Oak Forest, IL, September 4, 2009
Platinum Community Bank, Rolling Meadows, IL, September 4, 2009
Vantus Bank, Sioux City, IA, September 4, 2009
Corus Bank, Chicago, IL, September 11, 2009
Brickwell Community Bank, Woodbury, MN, September 11, 2009
Venture Bank, Lacey, WA, September 11, 2009
Irwin Union Bank and Trust Company, Columbus, IN, September 18, 2009
Irwin Union Bank, F.S.B., Louisville, KY, September 18, 2009
Georgian Bank, Atlanta, GA,,September 25, 2009

These 99 banks have failed in just the past nine months. In fact, there have been more bank failures in Georgia (19) and Illinois (16) in 2009 than there have been credit union failures in the entire nation combined (14). The FDIC expects $70 billion in losses due to failures over the next five years, and there are currently 416 banks on its "problem" bank list. This, even with $600 billion in TARP funds allocated to fortify the banking industry's financial statements.

What was your point again, Mr. Leggett?

This isn't a contest, Mr. Leggett. If it is, I just told you the score. Instead, we are talking about thousands of jobs, billions of dollars, and immeasurable consumer confidence lost. Instead of celebrating, why not use your position at the ABA to help your member banks prevent the next global financial meltdown? Seems like a better way to spend your time than throwing mud on the only financial institutions in America interested in helping common, everyday people get the affordable credit they need and deserve.

Lessons from Cheesesteaks

2009-09-21T20:04:00.000-07:00

Last year, the Credit Union Skeptic and I had a relatively public debate about the appeal of the credit union structure to the public. The Skeptic's take was essentially (paraphrased), "who cares what your structure is? People care about the products, services, and experiences you offer them."

My take was (and is) essentially "everything that makes credit unions great starts with their structure. I’m not talking about organizational structure, I’m talking about constitution – the basic building blocks of what credit unions are. The democratic control of an individual CU, and how each individual institution puts their philosophy into action is what causes differentiation and unique appeal to FOMs."

According to Frank Olivieri of Pat's Famous Steaks in Philadelphia, the Skeptic won that round. Frank says of his legendary steak sandwiches, "if the sandwich wasn't tasty and good, no matter how much passion you have no one would come back to buy it again."

He's right. The structure of Geno's and Pat's would mean absolutely nothing if their food was terrible. Their attitudes wouldn't matter. Their passion for cooking philly cheesesteaks wouldn't matter. While structure does mean something, long lines wrap around these two establishments because people love the product being sold.

Here's why I'm still right. The people in those lines aren't just buying cheesesteaks. Instead, they're buying a piece of Philadelphia. They are buying an experience. If Subway could create an equally great philly cheesesteak, I'd bet you an ice cold Mountain Dew that they still wouldn't be able to attract the huge lines of customers that Geno's and Pat's enjoy.

Structure is important for credit unions not only because of how it engineers our service offerings, but also for how it creates a distinction between what/who we are in business for versus what/who banks are in business for. For the cases in which credit union sandwiches look similar and taste similar to bank sandwiches, structure can be the sales incentive. It's why we buy the ProjectRED iPod instead of the blue one (or Zune). It's why we buy the pink Campbell's Soup can, instead of Progresso brand. It's why we buy our outdoor gear at REI instead of Cabela's.

While our sandwiches should taste better anyway, it's nice to know that we have the power of our structure behind us to sweeten the deal.

I Guess CU Blogs Aren't Dead

2009-09-16T16:56:00.000-07:00

It wasn't long ago that I lamented the near-death of the credit union blogosphere. Boy, was I wrong. In the past few months I have discovered a wealth of new blogs that have revitalized the online conversation.

Here are some of my favorite new (or at least new to me) credit union land blogs:

AndyJanning.com
Andy Janning is the training guru from Indiana's Forum Credit Union. I had the pleasure of seeing him speak at the Forum Solutions Partnership Symposium in 2008, and have been a fan of his ever since. Turns out, his blog is as good as his speech. Well-written, well-conceived, and full of takeaways for anyone interested in employee development.

Marketing Tea Party
Our old friend Ron Shevlin brings his unique wit, wisdom, sarcasm, and keen analytical ability to a new blog that calls out the insanity of commonly accepted marketing practices. His posts will make you laugh, think, and, often, feel ashamed of your marketing ineptitude. It's a slap in the face for financial services marketers like myself, packaged as a brilliantly written online rant fest.

That's So Northwest
Northwest Community Credit Union has really done a great job with their "That's So Northwest" blog. What I'm most impressed by is the personal stories and informal voices the authors use. I don't know a soul at NCCU, but I already like them. I think they have a clear understanding of what they want to accomplish with their blog, who their audience is, and how to write compelling posts.

Verity Mom
I don't think I could be more excited about this program. Seattle's Verity Credit Union has launched an elaborate search for a "mommy blogger" to manage content on their new Verity Mom site. At last count they have 34 excellent candidates to get the job, along with some amazing perquisites. This is a program to keep an eye on...Verity never ceases to amaze me with their creative initiatives.

Shared iDiz
I've really enjoyed the posts I've seen on this effort from the marketing agency iDiz. Multiple writers, including Twitter pal Kelley Parks, bring a variety of perspectives and creative insight into the world of credit union marketing. Definitely worth checking out.

Credit Union Cheatsheet
This blog by Tom Dluzen is billed as "Cliff Notes for Credit Union Managers and Board Members." Content is regularly updated, well-researched, and clearly written by someone with extensive experience in the movement.

The Thing About Tough Decisions...

2009-09-14T11:02:00.001-07:00

Eight years ago, my wife (my girlfriend at the time) and I drove to Johnson City, Tennessee to pick up the new love of our lives. She was cute as a button -- even better than we had expected from the pictures -- although she was still getting used to her body. Some body parts were way too big. Most were way too small. The combination was absolutely adorable.

This precious gift was an 8-week old English Bulldog we named Leota.

For the next seven years she went everywhere with us. She was the content back-seat driver for thousands of miles as my wife and I tried to maintain our long-distance relationship (for two years I lived in Richmond, Virginia, while my wife studied for her Master’s degree at Wake Forest University in Winston-Salem, NC). She was the flower girl at our wedding. She was our biggest responsibility, and our greatest source of pride. She was our first “child.”

Last week, we sent Leota to live with my wife’s cousin in Greensboro. Just like that. An hour and a half drive east, and the Leota chapter in our life was over.

I won’t waste much of your time discussing the reasons behind our decision, but we are confident that we did what was right for the parties involved: Leota, our son, my wife’s cousin, and our unborn son who is due in January. Right or wrong, it still hurts. It’s uncomfortable to make decisions like this. It’s tough to admit that your baby is better off with someone else...and that, perhaps, you would be better off as a result.

How many credit union executives, organizations, and volunteers are struggling with similar situations? At what point do you decide that your “baby” (project, trade association, credit union, seat on a board, business model, etc.) would be better off with someone else? New eyes. New ideas. New passions. Fewer preconceptions. Could a better life lie ahead for all parties concerned?

Uncomfortable decisions are much easier to put off until tomorrow, but who are you harming by doing so?

We wanted Leota to have a better life. We wanted our sons to have a better life. We found the perfect caretaker to help us make this happen.

How should you approach your little piece of the credit union movement?

Thumbs Down, Bank of America

2009-09-03T16:05:00.000-07:00

I don't have thumbprints. I mean, I guess I do, but not very defined ones. I was burned when I was very young, leaving my hands, face, and thighs considerably scarred for the remainder of my life.

I've never really talked about the accident. Or the scars. Or the effect they have had on my life. In fact, there are many people who have known me my entire life that have never heard me say a word about it. Sure, I get asked from time to time "what happened to your fingers?" (mostly by children). I try to answer politely, "I fell into the remnants of a fire when I was very young."

The reasons I don't discuss this, aside from the amazing amount of discomfort the conversation causes, are these: I can wear long sleeves. I can sit on my hands in certain social settings. I can wear long gym shorts. Sometimes I can even forget that I'm different.

There are way too many people who don't have that luxury.

Many burn victims simply cannot hide their accidents. They inspire me to be thankful that my scars are where they are...mostly concealable. They remind me that no matter how bad you think you have it, there is always someone out there who wishes they could be more like you. They also remind me that boo-hooing about something outside of your control is senseless. Accidents happen. Life happens. The only thing you can do is try to make the most out of what you have.

I have never allowed myself to be put into the category: burn victim. Truth be told, my scars have always been one of my biggest sources of drive. You see, when you're different all you want to do is fit in with those who are not. It's stupid, but it's true. I have always felt that I needed to be a little bit smarter, a little bit friendlier, a little bit more out-going, and a little bit more confident to get others to accept me as an equal. Again, it's stupid...but it has always been true. So, in that light I'm thankful for my uniqueness. It's always been one of my biggest strengths.

I am disclosing this information to you here to frame my thoughts about the story making waves in the world of social media about the Tampa Bank of America branch that refused to cash a customer's check because he had no thumbs. Turns out, Bank of America customer Steve Valdez has prosthetic hands. He has no thumbprints. He could not possibly comply with the branch's security policy that requires employees to verify customer identities via thumbprint scanning.

My take? Don't be offended by the policy. Don't automatically label this discrimination. (I get offended by people who are easily offended). Let's face it, the policy wasn't very well thought out. The way the staff reacted to Mr. Valdez' physical disability was inexcusable. The entire situation was simply an admission that the bank doesn't know their customers very well, doesn't empower its employees to use their own judgment in situations that require breaking policy, and/or doesn't hire employees who are smart enough to figure which situations require such action.

I am much more outraged by the inflexibility the staff demonstrated in this case than the policy itself. Get the smartest, most compassionate people on the planet together to make a policy, and there will be something or some group that they simply didn't consider. There are plenty of people without thumbprints, but let's be honest here...how many of you would have thought of them when developing a security policy? I may have, but that's only because I don't really have thumbprints. I don't fault Bank of America for that oversight.

I do blame them for not empowering their employees to serve with compassion. I blame them for not knowing their customers. I blame them for refusing to accept two forms of identification from a man who clearly has no other way of verifying his identity. I blame them for being a bank that has proven time and time again that service is, at best, an afterthought. I blame them for making someone who desperately wants to feel normal feel anything but.

Hat Tip to Bucky Sebastian, CreditUnions.com

2009-08-31T19:43:00.000-07:00

Bucky Sebastian wrote an excellent article for the July 2009 Callahan Report entitled "New Thinking about Affinities." The good folks at CreditUnions.com posted the story today for your reading pleasure.

I'm honored that he referenced my presentation "Oprah, Chicken, and the Future of Credit Unions." The test of course is seeing if we have the will-power, as a movement, to find some ways to facilitate the creation of new affinity group based credit unions as proposed.

For those who did not see my presentation from earlier this summer, here it is again:

Bringing Back Optimism

2009-08-27T18:27:00.000-07:00

"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.

The Economy's Biggest Credit Union Casualty

2009-08-24T18:15:00.000-07:00

Optimism.

(let's find a way to bring it back).

Things That Made Me Happy Last Week

2009-08-21T13:17:00.000-07:00

I have been getting a little cranky on my blog lately. That stinks. The thing is...I'm just as passionate about things I like as I am about things I don't like.

So, after an amazing week at CUDE training, I thought I'd write about some of the things that really made me happy in the last seven days.

Jeff Hardin's friendship.
Mout Rainier's beauty.
Matt Vance's passion.
Tom Decker's quiet intellect.
Bill Myers' creativity.
Carol Schillios' inspiration.
Safeway.
Jeremy Cybulski's comedy.
Jill Nowacki's drive.
Tim McAlpine's modest brilliance.
Jill Vicente's mastery of all things marketing and friendliness.
Larry Blanchard's love for credit unions.
Mike Banks' playfulness.
Gigi Williams' kindness.
Deer.
Teamwork.
Credit unions.
Pike Street Market.
Friends.
Fun.
Forgiveness.
Family.
Shari Storm's aura.
Terrell Meek's clever sense of humor.
Andytastic's wit.
Debbie Wege's Michael Jackson impersonation.
Brian and David's hospitality.
Bainbridge Island's peacefulness.
Islandwood's uniqueness.
Steve Delfin's perspective.
Jeanne Saarinan's patience.
30-minute ferry rides.
Ocean air.
Jason Lindstrom's calmness.
Pat Sterner's sharp mind.
Ava Milosevich's room presence.
Cassie Brown's ability to light up a room.
Jimmy Goodrum's smile.
Matt Kaudy.
Dress codes.
Una Townsend's accent and eloquence.
Shannon Tackett's extroversion.
Juan De Lora's dance moves.
Milly Cramer's animal identification skills.
Jimmy Marks' maturity.
South Africa.
History.
Future.
You.

A Multi-Party System?

2009-08-20T18:36:00.000-07:00

Several months ago, I tweeted the seemingly random comment: “credit unions should go to a two-party system.” One person responded “What are you proposing? The Credit Union Civil War?” Others wondered if I was joking.

Quite the opposite, actually.

Turns out, this was an issue that had been bugging me for some time. Not all credit unions share the same operational philosophy. Sure, we are all not-for-profit financial cooperatives, guided by democratically-elected volunteer directors, that return earnings to member-owners. This basic structure leaves a lot of room for interpretation, however.

How does your credit union empower member-owners to control their credit union’s operations? How are earnings returned to members? How does your credit union cooperate with other credit unions? The community? The credit union system? How does your credit union stand on the idea of growth? When is growth bad? What’s your position on risk-based pricing? Tiered deposit rates? When is profit from product offerings, even profit that is returned to members, bad profit?

The ways credit unions answer these questions can vary widely...but I’ve always wondered if we could generally put credit unions into two or more distinct, and official, categories.

Let me explain.

The Tampa Bay Devil Rays decided a few seasons ago that they would build their team around speed and defense. They started assembling young talent to fit this mold, and put their plan into action. While most teams were stocking up on proven power hitters and veteran pitchers, the Devil Rays were creating a style of their own. It was still baseball, and it was not to be considered better or worse that the prevalent model, but it was a distinct approach to the game.

Credit unions use distinct approaches as well. Increasingly, there seems to be a divide between a few general approaches to the way credit unions do business. Our reactions to the Corporate Stabilization issue give a unique insight to my point. Many credit unions adamantly opposed a taxpayer-funded solution to the problem. Others saw access to TARP as being a responsible solution. It was a healthy debate (that doesn’t need to be rehashed in this post), and very telling about what we have become as a movement.

Disagreement among credit unions is natural, but how do we balance our individual credit unions’ stances on the issues with the overall consumer view of credit unions? More specifically, how do credit unions organize amongst ourselves into political-type parties? How does a consumer know how an individual credit union stands on important philosophical issues? Not all democrats think alike, and not all republicans think alike. Generally, however, we can pretty much know how each will approach a decision.

“How’s the U.S. two-party political system working out for you these days?” you are no doubt murmuring.

Well, you make an excellent point. It’s dysfunctional. But it’s no more dysfunctional than confusing the marketplace with differing views on credit union philosophy. If our core principles are our keys to differentiation, shouldn’t consumers know generally how you implement those principles?

So, here’s the idea.

Organize a group of credit unions to spell out certain philosophical principles that member credit unions within the group must abide by. Credit unions could voluntarily join the group based on their general belief in that framework. Multiple groups could emerge, and each would present a distinct alternative to how credit unions should operate. Consumers would then know exactly what a credit union stands for before joining, and would more easily decide which values he/she aligns with.

For example. A group of credit unions could decide that their soul focus should be on democratic control, member ownership, and organic growth within the individual credit union. This would totally change this group’s approach to an important issue such as credit union to bank charter conversions. It would also dictate how those credit unions attract members. Want an equity stake in a credit union? This is your model.

Maybe another group emerges that says “to heck with individual credit unions, our goal is to make the movement as a whole bigger.” This group would truly believe in the notion that we are a cooperative of cooperatives. How would that affect this group’s stance on corporate credit union bailouts? Inter-credit union competition?

Another group could emerge that believes credit unions are purely social service organizations. Outreach, consumer education, advocacy, and development would clearly drive these credit unions. How would this change how this group approaches pricing? Would members of these credit unions then choose to receive lower returns on their deposits or higher loan rates in the name of philanthropy?

The number of philosophical divisions could be endless, but I would imagine that you could generally develop a small enough group of subsets that it isn’t overwhelming for the audience. Imagine the democratically-elected leaders of these divisions being at the table when our trade associations or regulators assess their positions on a matter.

The intention is not to create disunion within the movement. Instead, it’s a way to create better debate within the movement about key issues. While I truly believe credit unions need to speak with a unified voice, I also know that the reality is that we simply don’t have that consensus. Maybe this structure would allow us to better reach agreements on transformative issues? Maybe it will allow credit union boards to do some soul searching about what it is they are here to do? Maybe this exercise will simplify complex ideas like national branding campaigns, specific legislation, or opportunities for collaboration?

Maybe it won’t.

The Keith Leggett Watch

2009-08-03T18:27:00.000-07:00

There are few organizations on this planet with less political capital right now than the American Bankers Association. Amazingly, though, they have still decided that the time is right to continue their attacks on credit unions.

I stumbled upon ABA Senior Economist Keith Leggett's "Credit Union Watch" blog today, which held no punches in responding to USA Today's story about credit union payday alternatives. Upon first glance, Leggett makes an excellent point - credit unions are supposed to, as he puts it, be "an alternative to usurious money lenders." He points to payday alternative loans at Kinecta FCU and Nevada FCU that amount to an annualized 275% and 455% APR, respectively.

Written that way, any reader should be disgusted. That's Leggett's plan.

Here's reality.

Credit unions are not-for-profit financial cooperatives owned by members and directed by democratically-elected volunteers. While we serve members of all income levels, we are particularly adept at helping those who have been shut out by the rest of the financial services world - people of modest means. This is precisely the target market of the "usurious money lenders" Leggett describes. The moral dilemma many credit union boards are faced with is: how do we help this segment avoid the payday lending trap (high fees, high interest rates, terms that disallow borrowers from ever getting rid of their debt), while protecting the credit union's (read: members') assets?

Many credit union boards have decided that offering lower cost payday alternative loans is in line with the credit union mission of people helping people. What I personally love about a lot of these programs is the unique ways they are addressing the issue. North Carolina State Employees' Credit Union, for example, has been amazingly successful at reaching out to this population with small, short-term loans (maximum 31 days and $500) at 12% APR. A key component of these loans is a 5% automatic deduction of the loan amount that is placed in the member's savings account. So, through time, the borrower isn't digging him/herself deeper in the hole. Conversely, the borrower is building savings with which the cycle can be broken.

That is looking out for the little guy, Mr. Leggett. That is a conservative credit union doing a remarkable job of reaching out to those who need a credit union's touch more than anything. These are the exact same people who the financial institutions you represent have either fleeced for every nickel and dime they could squeeze out of them, or shut out of the system completely. All of this while nearly screeching the entire world economy to a halt and requiring bailouts bigger than the GDPs of several continents.

I won't take one moment of anyone's time trying to defend Kinecta FCU or Nevada FCU, especially since I know no more about their products than what I've read in USA Today and the NCLC Report. I get even more disgusted with poor credit union behavior than I do with bad bank behavior. We expect it out of the latter. We expect much better out of credit unions.

And while I cannot stand people who justify bad behavior with worse behavior, I must point out the amazing timing of Mr. Leggett's comments. On the same day of his post, we learn that Bank of America was fined $33 million for misleading investors about $3.6 billion in Merrill Lynch bonuses paid to failure executives that needed $10 billion in taxpayer bailouts, California banks have cost the FDIC $15 billion, and Colonial BancGroup gets raided by the feds. Maybe you could have waited a day or two...or is there even worse news on the way?

There are bad apples in the financial services world, Mr. Leggett. Unfortunately, there are even a few on my side of the discussion. You have a lot of problems to fix on your side, however, before anyone anywhere will be able to come close to forgiving the banking industry for the nearly irreparable harm you have caused.

(PS...I would have written this on your blog, but you don't allow comments. That's not a blog, Mr. Leggett.)

What Would Happen? A Fresh Start.

2009-07-24T18:50:00.000-07:00

What would happen if credit unions started fresh? Fresh fresh...like 1852 Eilenburg and Delitzsch fresh. Or 1901 Lévis, Québec fresh. Or even 1908 Manchester, New Hampshire fresh.

If we could start again, what we would do differently? Would our leaders take the same path if they were given the opportunity?

Here's a sample of what I would have done (if of course the stupid law, and common sense, wouldn't get in the way).

I would make democratic control mean more on the individual credit union level. I would make ownership mean more than just an annual vote. I wouldn't pay monthly dividends. Instead of encouraging member investments in various share accounts, I would make member deposits THE investment. Members would get equity shares in the credit union instead of regular dividends, and would be able to cash out at any time as long as there is a willing buyer (which could be the credit union itself). As the credit union becomes more successful, the value of member shares increases. As the credit union makes poor decisions, those values dip. Thus, members would have a vested interest in the health of their credit union.

I would place a cap on an individual's deposits in any one credit union, and lower the share insurance on each account to, say, $50,000. No single member should be allowed to have excessive equity in, or control over, any credit union. Likewise, no member should be allowed to deposit less than the credit union's par share value each year. This membership requirement will encourage growth and member involvement, while weeding out the members who do not value their membership.

I would rethink the idea of dues based memberships in trade associations. We are a cooperative movement, directed by volunteers. Any trade group we form, then, should be on a free and voluntary basis. Don't want to share ideas? Cool, don't. Want to? Nice, welcome to the club. Credit unions shouldn't have to pay to collaborate with other credit unions.

Trade associations, instead, would take the form of think tanks...staffed by democratically-elected volunteers with strict term limits. These associations would help form a national brand, serve as representatives to community groups and government officials, come together to address concerns of the movement, and decide, with the help of their constituents, which technology investments to make. These investments would be the property of the credit union movement, and could be used at no charge by any credit union that contributed (personnel, money, or any other assets) to the project. Start up credit unions would also have access to these technologies for a period not to exceed five years. At that point in time, they would be required to pay their portion of the initial investment that all other credit unions made to develop the technologies.

Corporate credit unions would only be able to invest in or borrow from other credit unions. Likewise, natural person credit unions would only be able to invest in or borrow from other credit unions or their own members.

Finally, no member could apply for a loan unless he/she has been a credit union member for at least 12 months.

Of course, my credit union system probably wouldn't have survived 10 years...but I thought it would be fun to think about this. The fact of the matter is that most credit unions have done a very good job of staying true to our mission. That's what keeps me passionate about the movement. I do think, however, that we can do better. Your thoughts?

P2I2I2P Lending? Why Not Just Return to Our Credit Union Roots?

2009-07-01T17:29:00.000-07:00

I really like the idea of Peer-to-Peer lending. Based on what I know of the history of credit unions, that's pretty much what we were formed to do: cooperatively save money to provide ourselves with an affordable source of credit. Member owners (peers) lend to other member owners (peers). Of course, there's an intermediary - whether that be credit union loan officers, a branch manager, or a paid/unpaid (perhaps elected) credit committee. But it's still P2P lending.

I'm told that this isn't as sexy as allowing an individual member to select an individual borrower, using a credit union as an intermediary (taking a percentage of the transaction as compensation). As an individual investor or potential borrower, I totally get that. This is precisely why I have always been a fan of the P2P models that have come to the United States in the past several years. I've just never seen them as true P2P arrangements. Instead, they are more like Peer-to-Intermediary-to-Peer lending (P2I2P).

Why do I spend any time at all pointing out this distinction? Because it indicates that this mindset is somehow different from what credit unions, by definition, already do - albeit Peers-to-Intermediary-to-Peer as opposed to Peer-to-Intermediary-to-Peer lending. Truth is, most loans in the supposed P2P landscape are Peers-to-Intermediary-to-Peer arrangements anyway. (I'd even argue that the current P2P models are really P2I2I2P arrangements, but that's another topic for another day). The mindset is exactly the same as the credit union model.

"Wait, you idiot," you're thinking, "credit union members don't get to pick an individual borrower. That's a big difference."

True. But there's nothing stopping us from doing that. In fact, early credit unions kind of did pick individual borrowers. They knew their members and used credit committees to evaluate potential borrowers' risk profiles (used to be known as the 4 C's of credit - collateral, capacity, character, and capital). It was members loaning to members - arguably even more intimately than today's P2P models. There's nothing stopping a credit union from returning to the days of credit committees comprised of members who are empowered to make lending decisions.

"That's the dumbest thing I've ever heard," you laugh...considering clicking away from this post. "What do members know about making loans? Loan decisions should be made by trained loan officers."

I agree. In fact, Desjardins himself said that there is no greater responsibility a credit union has than making smart lending decisions. Loans are investments, and there is no quicker way to bring down a financial institution than poor investments. I wonder, though, why couldn't members be the trained loan officers? Why couldn't they be taught how to make smart lending decisions and enjoy the rewards and risks of their actions?

"Uhhh...that's what the P2P models do, dummy."

I guess that's what I was suggesting last year when I proposed that credit unions allow members to form sub-credit unions:

I’ve always wanted to do that as a promotion at my credit union: “Start your own credit union.” Part P2P lending, part membership “pods,” I think it would be neat to allow users/members/etc. to form their own “virtual credit unions” housed within an existing credit union.

Here’s how it would work. Joe Blow and his softball team want to create “Raging Rhino Credit Union.” They pool their money together (say, $10,000) and deposit it into ABC Credit Union under the name “Raging Rhino Credit Union” (RRCU). ABC facilitates transactions, prints statements, etc. in exchange for a monthly fee based on assets within the RRCU (say, two basis points annually, charged on a monthly basis). Collections and other CU functions can be charged at separate rates.

RRCU as a sub-credit union with its own board can set deposit types/rates and loan types/rates in any way they see fit as long as they have the assets to support their decisions. This way, a parent credit union could contain hundreds of “pod” CU’s operating semi-autonomously. Their own websites. Their own marketing. Their own corner of the cooperative universe.

My point is simply that we aren't embracing the principles that originally attracted members to credit unions. The fact that many people don't see credit unions already as P2P lenders highlights this point. That's exactly what we are (should be). It doesn't matter if you decide that a Kiva, Prosper, LendingClub, etc. model is right for your credit union/members, my crazy idea about virtual credit unions may work, or that business as usual satisfies the public that you are a P2P lender. We must make sure that that's what we are seen as: financial institutions that empower members, through democratic control and cooperation, to help each other save and borrow more affordably. It's mutual self-help: precisely what we should have been promoting all along.

Friends of Ed - Marketing Lessons from Dairy Farmers

2009-06-28T18:56:00.000-07:00

I just saw an ad for Borden cheese. Come to find out, Borden is a cooperative of dairy farmers. In the ad, Borden boasts "Our cooperative is 100% farmer-owned. That means 100% of our proceeds go to American dairy farmers." On the accompanying website, friendsofelsie.com (named after Borden's mascot, a cow named Elsie), visitors can read about the spirit of cooperatives and how supporting Borden supports the community.

"What does it mean to be a friend of Elsie?" the site rhetorically asks:

It means you choose to support dairy farmers who work hard every day to put the best the American farm has to offer on your table. That’s because Borden® Cheese is made by a cooperative of dairy farmers. And since our cooperative is 100% farmer-owned, 100% of our proceeds go back to American dairy farmers. Some probably near you. So, be a friend, and look for Elsie the Cow. She’s a long-standing symbol of good things from the farm and good things for families and communities everywhere.

The site lets users share recipes, stories about important contributions to the community, and even has a cool interactive map of dairy farmers and other fellow "Friends of Elsie."

It's a social network built around cheese.

My take? It works. My opinion of Borden cheese, which was, frankly, non-existent two hours ago, is now quite positive. They do a great job assuming the "little guy" role, make a "local" connection, state their purpose clearly, and make you want to root for their success. Credit unions can take a cue from this. The ad doesn't mention price. It doesn't even mention quality per se. What it does do, quite effectively, is highlight the impact of doing business with Borden. Powerful stuff.

What also strikes me is that in the marketplace for pre-sliced cheese, there really isn't a bad guy. I mean, there's the big guy - Kraft. But last I checked Kraft didn't fleece Americans for billions of dollars in fees, billions more dollars in bailouts, and reward themselves with billion dollar bonuses. Should be easier for credit unions to make this message resonate, shouldn't it?

Wouldn't You Like to Get Away...

2009-06-19T08:31:00.000-07:00

It's a loose connection, but here goes: Woody Harrelson went to school at Hanover College in Hanover, Indiana. I grew up in Scottsburg, Indiana, about 20 miles from Hanover. Woody's character on the sitcom Cheers was from a small town in Indiana. I love Indiana. I love Cheers.

I've always enjoyed the idea of living in a small town, knowing my neighbors, having conversations with people I love and respect, feeling influential, and feeling connected to my surroundings. I enjoyed those feelings growing up in southern Indiana. I experienced those precious gifts night in and night out, whether it took the form of a waving neighbor as you're driving by, a "long time no see" beer on the house at Hardy's Cafe, or a trip to the grocery store that took 30 minutes too long because you talked to everyone in the store.

- Cue the music. -

Making your way in the world today
takes everything you've got.
Taking a break from all your worries,
sure would help a lot.

Wouldn't you like to get away?

Sometimes you want to go
where everybody knows your name.
And they're always glad you came.
You want to be where people know,
people are all the same.
You want to be where everyone knows your name.

Twitter used to be Cheers for me. It was this little hole in the wall that connected me with some of the brightest and most interesting minds in the credit union world. We'd talk about credit union innovation. About technology. About the world of financial news. About politics. We made each other think, laugh, grow, and achieve. It had nothing to do with self-promotion...it had everything to do with self improvement.

Those days seem to be gone. Not the connections...those are here to stay. But Twitter is no longer Cheers. Shari Storm recently wrote on the CUES Skybox blog that Ashton Kutcher and CNN deserve a lot of the blame for making Twitter less special. In her post, Shari asks a wonderful question:

"Which is better, having a small group of people who love you a lot or a large group of people who are familiar with you?"

Without question, I'd rather have a small group of people I love (and that loves me) a lot. I have no doubt that's simply small-town Indiana coming out in me, but that's what made Twitter special to me. I still love Twitter, but in a much different way. It's now Facebook, MySpace, LinkedIn, and the countless other social networking sites that have popped into our lives as the new flavor of the month. Each has been bastardized by self-promoters, sales people trying to sell to salespeople, "Britney Spears" sex tape SPAM, and "[fill in the blank] has sent you a gift" messages. Each, I have no doubt, will be replaced by the new flavor of the month when it arrives.

I have written several times on this blog about how much I disagree with some credit unions' "grow or go away" mentality. What I feel about Twitter these days only highlights my argument. The more popular things become, the less special they become. We each have a maximum number of relationships that we can maintain well. That number differs greatly from person to person, but I can almost assure you that it is much fewer than the number of followers you have right now on Twitter. I have created well-researched, graphical depictions of this phenomenon below:

Your value shouldn't be measured by the size of your network. Instead, you should focus on the strength of your connections. If you are able to manage more than my Cheers size network, so be it. Norm, Cliff, and I are content with the usual.

Oprah, Chicken, and the Future of Credit Unions

2009-06-12T17:30:00.001-07:00

Wednesday, I had the honor of speaking at the 75th Anniversary of the Federal Credit Union Act Symposium hosted by the Honorable Gigi Hyland from the NCUA. I was asked to discuss what I thought credit unions needed to focus on to make sure the next 75 years are as good as, or better than, the last.

There were many things I wanted to discuss, but only 15 minutes were alotted to each speaker on my panel before it was opened up to Q & A. So, I focused on communications, attracting new markets, forming new credit unions, and relevancy.

Promoting Thrift in an Age of Excess

2009-05-22T18:26:00.001-07:00

Just thought I'd make the following presentation available to everyone. I was lucky enough to be asked to present on this topic for the CUES Experience webinar series. If you have any questions about this topic, or would like to brainstorm ideas on how your credit union can promote thrift please let me know.

Thriftinageofexcess

View more PDF documents from Matt Davis.

Credit Union Cookies?

2009-05-14T17:00:00.000-07:00

In Reader's Digest's June 2009 publication, a little blurb in the "Hello/Goodbye" section caught my eye. It seems that the Girl Scouts are battling declining membership (an 8% decrease since 1999). To rebrand the organization into one that will be more attractive to modern girls, they plan on de-emphasizing badges, stuffy textbook-based learning, and having moms as troop leaders in favor of focusing on web-based learning, computer literacy, the environment, engineering, and...wait for it...financial literacy.

I've always thought that credit unions should be THE force behind mandating financial literacy courses and standardized testing. I've also argued that credit unions should prepare, teach, and pay for the educational content.

But lookie what we have here! If the Girl Scouts are correct that financial literacy education can help them reverse their membership trends, maybe this is a more manageable first step? Studies show that women are typically their household's CFO, so why not reach out to the future CFO's through the Girl Scouts? Clearly this won't entirely solve America's overall lack of financial literacy education, but it would be one heckuva start.

Plus, I love Caramel Delights...

and Thin Mints...

Is "I'm Dull" Marketable?

2009-05-12T15:50:00.000-07:00

“Banking should not be exciting,” Clay W. Ewing, president of retail financial services at German American Bancorp, a community bank in Jasper (Indiana), told The Times. “If banking gets exciting, there is something wrong with it.”

The preceding quote was taken from a New York Times article "We're Dull, Small Banks Say, But [at] Least We're Profitable." As a marketer for a $200 million credit union, I'm not sure how to take this statement. On one hand, Ewing is absolutely correct. The flashiest financial institutions (read: WaMu, Bank of America, Lehman Brothers, Citi, Bear Stearns, Wachovia, et al.) who made high-priced gambles on mergers, acquisitions, lending, investments, and promotions took the hardest falls in the credit crisis. By trying to be "exciting" (read: wildly profitable), these banks took on wild risks that have clearly proven to be devastating to the world economy.

Sure, small banks and credit unions have felt the collateral damage from the credit crisis. Rising unemployment, investment losses, lost consumer confidence, and their associated effects were virtually unavoidable for all businesses, financial institution or not. But these scrapes have been very minor in nature compared to the blows goliath, more "exciting," banks and credit unions have suffered. The financial institutions that took the conservative (read: boring) approach to lending and investments over the past 20 years are the ones to escape this banking crisis with the cleanest balance sheets, the least public disdain, and the more promising futures.

On the other hand, my family's livelihood (and I'd argue the livelihood of our credit union) depends on my ability to help make banking (err, credit unioning) exciting...or at least more exciting. I work for a credit union that carefully controls operating expenses, makes conservative lending decisions, and invests in only the safest instruments on the market. But that doesn't stop us from trying to make our organization as "exciting" as possible.

So the question is this: Can a financial institution, long-term, be exciting AND profitable? Is "dull" the best way to run a credit union? If so, why don't we have more than our current, paltry share of the nation's deposits?

The Credit Union Receptionist (Someone Had to Write About It)

2009-04-29T16:25:00.000-07:00

A credit union receptionist blogged today about her "pet peeves" at work. I'm not going to link the blog or go into detail about what was written. Not that what was written was all that bad. In fact, many of her mentioned frustrations are quite commonplace - shared by plenty of frontline personnel across the entire universe of service organizations.

I'm not going to go into detail because it doesn't matter...it's not the point. These rants take place all the time. Most of the time, however, they take place privately...amongst a group of friends, to a trusted colleague, or with family members. In this case, it took place on a public blog.

In the world of Google Alerts and Twitter, this was a very, very bad call. Dozens of people found this post first thing in the morning, and the link was quickly tweeted to hundreds of credit union folks. This was a bad reflection on the author's employer, on credit unions in general, and on the author herself. That said, I have reason to believe that it was an honest, albeit naive, mistake.

The point of this post is not to rub salt in her wounds. She took the post down as quickly as she realized her misjudgment (thanks to a phone call from Jeffry Pilcher), wrote a public apology, and hopefully nipped any potential damage to her employer and her career in the bud. Rather, I'd like to discuss the points that this situation brought to light.

1. Nothing on the Internet is private. I've heard this explained in several ways, but my favorite analogy equates posting something on the internet to putting up a billboard on a busy stretch of interstate. If you value your job, don't post negative things about your position on your blog. It's kind of like putting up a billboard that says "ABC Credit Union, along with its members, suck." Not a cool career move. The same thing goes for pictures of you doing keg stands at a frat party, taking bong hits with Michael Phelps, or putting boogers in Domino's pizzas. If you don't want the world to see that stuff, don't put it on the Internet. If you don't care, expect to deal with the consequences.

2. Word travels fast. It takes only a few clicks for thousands, even millions, of people to see what you have written. This can be a very good thing...or a very bad thing. Just because your blog doesn't typically have a huge audience, doesn't mean something you write won't end up on millions of computer screens. Fame is often cool, infamy usually isn't.

3. Credit unions need to decide if we are a cooperative of cooperatives, or an industry of competitors. I've argued for years that if the credit union movement doesn't start holding its member credit unions to consistent and higher standards, we will never be able to create a meaningful national brand. This means calling out other credit unions that have strayed from our founding philosophies, and doing what we can to control our public message. I was criticized today for encouraging the writer to rethink her post. I also saw the critics of her post be compared to an "angry mob". This mindset is unfortunate. To me, credit union employees have a responsibility not only to our employers, but to the movement as a whole. When a credit union rips people off or asks for TARP money, it's a black eye for the movement. When a credit union employee publicly complains about his/her job and members, it's a misleading public account of the entire system. Whether I'm in the minority on this stance or not, I feel like it's my duty to call people out on these misrepresentations.

If we're an industry of competitors, then I totally see the other side. In that case it's much easier to let the writer get fired, her members get ticked, and her credit union become weaker for it. I prefer to believe that our overall health depends on each and every credit union in the system. If we can help one another, we should.

The comments written on the post in question were pointed, but respectful. Had she kept the post as published, these comments would have given the counterpoint to her message. Credit unions are great places to work, and we work every day to serve our members in the best ways we possibly can. Thankfully, she removed the post, presumably saved her job, and gave us an excellent credit union social media case study from which to learn.

Social media rules aren't concrete...they're still being written, and will no doubt be re-written ad nauseam. Some truths, however, remain constant - no matter what the communications vehicle may be: some things are best left unsaid, think before you speak/write/blow smoke signals, and never discount an audience's passion for or against your opinion. While we all have the freedom to write or say anything we wish, we are also free to deal with the associated consequences - positive or negative.

Kicking the Tires - CUECU

2009-04-20T17:12:00.000-07:00

Screenshots and white papers aren't enough to sell most credit union decision-makers on an innovation - no matter how promising it may be. Instead, the sheep among us wait until another financial institution is brave enough to implement said innovation before it is truly considered as a viable option. This mentality creates a network of precious few innovators, and a glut of late majority slackers or, worse, laggards.

What if there were an easier, more timely, way to prove an innovation's worth? I realize that not everyone has innovation in their blood...the risk is too high, and the potential reward simply isn't worth it to them. I get that. But what if we could speed up the time it takes for this group to kick an innovation's tires? What if we could allow them to experience a financial services innovation risk free?

Could we set up a Credit Union Employees Credit Union (CUECU) that could adopt innovations FOR credit unions? I picture it like this. Credit union employees across the nation deposit money into the credit union (call it dues, deposits, investments...I don't care). The credit union, then, negotiates with vendors to get free use of their newest innovations. Better yet, the credit union can also create their own. Member owners can choose a la carte which innovations they want to kick the tires of, and test them out for themselves in a real-time environment. Members could choose any core processor and any associated interfacing products they like from a menu of available innovations...and change their account settings any time they wish.

Vendors will want to be involved because it gets their product in front of their target market. It would also give them an opportunity to find bugs in their plans before launching to the "public". Operations would be extremely inexpensive, with very few staff positions or physical office space needed.

This won't turn laggards into innovators, but it may shorten the time it takes for the former group to come aboard. For a cooperative movement of cooperatives, this improves us all.

Your Symposium - October 7-8, 2009

2009-04-03T18:20:00.000-07:00

In 2007, the North Carolina Credit Union League's Jeff Hardin and I decided to take a trip out to Fishers, Indiana, for the Trabian/Forum Solutions Partnership Symposium. We had both recently gotten involved in the credit union blogosphere, and saw it as an excellent opportunity to meet in person with the personalities behind our favorite industry blogs.

What we experienced far exceeded our expectations. Sure, we got to meet wonderful people like Tim McAlpine, Gene Blishen, Nala Henkel, Brent Dixon, Trey Reeme, Matt Dean, Doug True, Jeff Stephens, Robbie Wright, Shari Storm, Denise Wymore, Ron Shevlin, Rob Rutkowski, Charlie Trotter, Guy Messick, and many others, but the content and discussion that the speakers and attendees generated were second to none. I credit this event almost entirely with inspiring me to create Members Credit Union's "What are you saving for?" program, and building lasting friendships that have grown infinitely stronger as the years have passed.

If you would like to attend the most rewarding conference in America for innovations in financial services, I highly recommend that you try to attend this year's Partnership Symposium. This is completely a break-even type event, so pricing is unbelievably low. $225 will get you two full days of speakers, six meals, and a priceless amount of inspiration, knowledge, and fellowship.

Last year, I was lucky enough to be voted in as a guest speaker at the event. This was a nerve-racking experience for sure, but will always be considered a highlight of my career. Would you like to be a speaker this year? Do what I did. Create a video. Submit it to Forum Solutions. Campaign for votes. The following video describes the process in more detail.

Find more videos like this on Your Symposium

Do yourself a favor, and do all that you can to attend or speak at this event. You won't regret it, I promise.

The Email I Never Sent (Off-Topic)

2009-03-22T18:48:00.001-07:00

November 7, 2000, I sat glued to the television as election returns from one of the most talked about elections in history flashed on the screen. It was Williamsburg, Virginia, and I was sitting on a couch next to my closest college friends. Most of them were totally not into politics, so they came and went. But to the left of me (in more ways than one), determined to stay up with me until the bitter end, sat Andy Crapol. Andy was a member of the William & Mary soccer team, and was the son of the mayor of Williamsburg.

Andy was an extremely likable guy, and always at the center of the campus social scene. But this night he was uncharacteristically at home - more interested in world events than where the night's biggest parties were. He not only enjoyed politics...he understood them. This was well-evidenced in the way he skillfully avoided a full-fledged political debate with me.

The election was called both ways that night, but an official resolution would not be clear for many days. But one thing was immediately clear - Andy and I shared a moment that, despite our dramatic differences, would live on forever.

Or at least I thought.

Cancer took Andy's life on March 13, 2009. I had received an email from a mutual friend in January that cancer starting in Andy's esophagus had spread to his lungs and liver. The prognosis was grim, and we were encouraged to email our good wishes and memories to help pick up his spirits as he went through treatment. My wife, who also went to school with him, wrote right away. I started writing five different times...and never finished. I never brought myself to complete or send a note of any size or significance. I failed.

I wanted my words to be perfect. I wanted to bring up the right memories. And maybe deep down inside I was looking for a way to insulate myself from the pain of losing a friend forever. Truth be known, we hadn't talked in years. I'm guessing the last time I saw him was at Homecoming in 2006. But here was a young, vibrant 30 year-old who was always one of the most likable people in the room no matter where he was...dying of cancer? How do I respond to that?

When I found out the news of his death, I instantly opened up the last version of an email draft I had intended to send. It wasn't poetic by any stretch of the imagination. But it should have been sent.

Friday, I flew from Boston to New York City on my way back to Greensboro. Flying over the Big Apple, I was amazed by how huge the city is. Not just how big the skyscrapers are, but how wide the city stretches. Millions upon millions of people, with millions upon millions of personalities, stories, wonders, pains, and joys, live there. As this amazement started to take over me, my eyes drifted to the largest graveyard I've ever seen in my life. And I wondered, of the thousands of people represented by the various headstones and monuments...how many left this earth wondering "whatever happened to that friend I knew back then?"

Is there something that you should be telling someone right now? Please don't do what I did. Say it. Hug him. Remind him of that time way back when. Give him a call. Take him out for a drink.

Friends are supposed to be there when friends need them. Sorry, Andy.

The Perfect Gen Y Branch

2009-02-19T15:54:00.000-08:00

Your job is to design the perfect credit union branch for 18-25 year olds, and the sky's the limit. How do you equip it? How do you make this place as appealing as possible for this group?

My temptation is to think of recent successes in retail design. Take the Apple Store's hands-on, help yourself, kick the tires, roaming cashiers/geniuses approach. Consider the U.S. Army's recent arcade/virtual immersion approach to recruiting. Mix in some neat features like Starbucks' "Now Playing" initiative. Free Wi-Fi? Makes sense, right? Extend the branch to the outdoors, recognizing that this group appreciates open air bistros just as much as they love all-night Rock Band marathons in dungeonous bedrooms.

Think about Lowe's/Home Depot's regularly scheduled "do it yourself" demonstrations. Have car dealers bring by their newest youth-targeted vehicles and accessories for test drives. Let them build their own cars virtually on large monitors, huge touch-screens, or computer stations. Let them see how adjustments to each build will affect their monthly payments, total cost to own, etc. And don't limit these demonstrations to financial products and services...have community groups come in to talk about upcoming service projects. Have musical groups perform. Make the place a cultural center. It's a crazy idea, but it might work.

Deposits? Withdrawals? Why do these transactions require human interaction? Use interactive kiosks that allow members to help themselves. Think "self check-out". Branch personnel are there for transaction assistance, in-branch demonstrations, and loan services. In essence, employees are there to help members help themselves. Hands off until requested by the members to do otherwise.

Then, realize that these people don't want to be at your branch anyway...and that many of these investments will be all for not. Make sure that everything you do in branch, you can do online, and cross your fingers that somehow, some way, you pick the perfect combination for your field of membership.

This post isn't to claim that I know what the perfect Gen Y branch is...because I don't. This post was to get a discussion started about this topic. Honestly, I want to be wrong because the above ideas are over-the-top, and potentially impossible to justify financially. What would make up your perfect Gen Y branch? (I feel a snarky Ron Shevlin comment coming soon) What would make your office stand out from a crowded marketplace eager to attract this large group of consumers?

Thanks in advance.

Hate the Game, Not the Players...

2009-02-15T20:23:00.001-08:00

The year is 2005. You are the CEO of a $50 billion bank. You crunch the numbers and realize that there is no possible way that: a) there are enough qualified home buyers to justify the number of new housing starts; b) housing prices are rising so much faster than wages that there is no way for people to continue to be able to afford them; and c) investments in subprime and alt-a loan packed mortgage backed securities are soon going to backfire horribly. You look at the data over and over again and come up with the same conclusions.

Things are good, though. Your stock price is up. Your investors are being rewarded. Your bonuses have been out of this world. And your bank has been making record profits for three consecutive years.

What do you do? Do you pull out of the mortgage business? Do you invest in less risky, and less rewarding investments? Do you go to Congress and say, "Woah...something really bad is going to happen if we don't put a stop to this!"?

For the first time in this blog's life, I'm going to defend the bankers. I argue that most bankers had little choice but to continue doing what they did. A bank's job is to maximize profits for shareholders. Banks were making record profits off of the gravy train of the real estate bubble. So were their investors. If a large bank's CEO were to decide to pull out from this line of business, their financial performance (though it would still be strong) would have lagged dramatically behind the competition. What would that mean? Lower stock prices, and the loss of his/her job. If a bank CEO made any of the above moves, he/she would be replaced with someone who believed in never-ending record profits. Boards don't like pessimists...nor do investors.

It's easy to vilify bankers...especially these days. But the problem here is even the banks that played it relatively safe have paid a heavy cost. Hate the game, but don't hate the players. There aren't enough fingers in North America to point out all of the people responsible for the mess we're in. Bankers were simply doing their jobs.

This is yet another reason I'm glad we have credit unions.

CUES Experience (Denver, CO) - April 14-17

2009-02-11T05:45:00.000-08:00

Come to CUES Experience...seriously.

Legends of Financial Services

2009-02-08T10:27:00.000-08:00

I went to Salem, Virginia, on Friday to watch country music legend George Jones in concert. This was my first time seeing "The Possum" live, and quite honestly, part of me wishes I hadn't. It's not that it was a bad concert. Quite the opposite, actually. For a 77 year old man, Jones can still entertain. His amazing voice, beautiful songs, self-deprecating jokes, and youthful enthusiasm have a magnetism that few other performers can claim.

But I noticed something odd at the side of the Salem Civic Center stage. There were two laptops lit up on a small table adjacent to the stage. One was clearly controlling the backdrop display - an amateurish powerpoint-type collage of pictures and animations that changed from song to song. The other laptop had scrolling text on it - almost like a karaoke monitor. When you looked at the front of the stage, you could tell that that's exactly what was going on. There were two monitors facing away from the crowd that were clearly feeding/reminding/coaching Jones his lines.

This setup consumed me for the entire show. He still forgot his lines 6-7 times. Seemingly, the crowd (whose average age was somewhere in the neighborhood of 85) knew his songs better than he did. And I would wager that Jones was sober as a judge. Compounding matters, he announced after the first few songs that this was his 51st year of performing. Many of the songs he sang Friday, he has performed every show for 51 years!! Most of them, he wrote!

And he still needs his lines fed to him?

It made me think about credit union news of the past several months. Have we forgotten our lines? Have we forgotten our 7 Cooperative Principles? Are our 100 years of age starting to show?

When Johnny Cash died, I promised myself that I would try to see all of my favorite artists while I still could. Since then, I've been privileged enough to go see Willie Nelson, Bob Dylan, and now George Jones in concert. Those memories are mine forever, but I'll admit that each let me down in their own unique ways. The trouble is once you place someone or something in your mind as having legendary status...it's really tough for it to live up to expectations.

In the middle of Jones' set, he started joking about drinking. He said that he had recently discovered his new favorite drink...water. "I wish someone had told me about this sooner," he laughed. Then, he did something that really made me sad. He started pitching his George Jones branded water - White Lightning. Are you freakin' kidding me?!

Is that what credit unions have become? An aging legend who can't remember his lines, and looks to make a sleazy buck at every opportunity? Sometimes I wonder...

If your credit union doesn't want to do things the right way, I hope you'll consider ending the tour. Convert to a bank charter, and allow those credit unions who still care about our founding principles to take the stage.

Tinfoiled

2009-02-03T05:30:00.000-08:00

One of the people I most admire in the credit union movement, Gene Blishen, wrote a post yesterday that, like most posts on Tinfoiling, leaves me enveloped in introspection and philosophical turmoil. He was responding to a Tweet I posted indicating that I was considering pulling the plug on my blog. I've never been so touched by a blog post - not just because of the sentiment, but because of the source.

So, instead of writing a three page essay comment on his blog, I figured I'd write a response right here to communicate what's going through my mind.

A few things are happening in my life that make me question how my time is spent. First, I have a two year old son who does nothing but entertain, enlighten, and amaze me every moment he's awake. Unfortunately, time is a zero sum game. Every second I spend blogging is a second I do not get to spend with my son.

Second, I am a month away from turning 30. When I was 17, I set some very lofty professional goals for myself to be met at certain ages. By 30, I was supposed to accomplish A, B, C, and D. To date, I have partially accomplished A and B. While I don't view these necessarily as failures (rather, crazy notions 13 years in the making), it does make me question if I have misspent time.

Third, while 2008 was one of the most fulfilling, productive, and rewarding years of my career, it also resulted in the lowest pay raise I have received since graduating from college in 2001. Clearly, there are external factors involved with this decision, but it certainly makes one question a few things...especially when coupled with current credit union news.

Let me explain.

Most of my career goals, like is the case with most ambitious kids, centered around income and power. When I got involved in credit unions, that changed. Sure, income and whether or not I am in a position to be heard are still important...but the movement made me rethink what was truly important in a career. With credit unions, I had an opportunity to truly make a difference in people's lives. I was part of something special - a cooperative of cooperatives that did things differently than their bank brethren. We did things the right way. We made decisions based on what was right for our members, not what was right for our own pockets. For that reason, I have always been OK with earning less than maybe my market value outside credit unions might be. In exchange for fame and fortune, I argued, at least I could look myself in the mirror each morning knowing that I was making a positive impact on hard-working men and women that make up our membership. Tasked with telling the world how credit unions are an infinitely better option for consumers than banks, this was a story I have been more than happy (proud, even) to tell.

Fast forward to recent credit union news.

After spending the last five years preaching the credit union difference, I now find out that CUNA, NAFCU, and NCUA want parity. After months upon months of telling us that credit unions have been well-insulated from the credit crisis' fallout, our trade associations are effectively saying the sky is falling. After standing by idly for years as some credit unions (still a small minority) made the exact same lending mistakes as the big banks, the NCUA finally wants to take action - and they do it with precious little communication to their member credit unions.

So, my struggles are these: Do I continue to spend an amazing amount of time posting, commenting, researching, guest posting, etc. about a movement whose founding principles I truly believe in at the risk that the movement's actions make me look like a hypocrite? Am I being economical with my time? Is the opportunity cost of blogging justified? Do I still believe in credit unions...or just the dwindling number that are sticking to their for service, not-for-profit, conservative roots?

The conversation on credit union blogs has become decreasingly passionate/active over the past 4-5 months. Probably due to economic variables. Maybe due to some of the same concerns I have above. Not sure. But no one can argue that this has not been the case. Most of the best posts I've seen in the CU blogosphere over the past several months have received an embarrassingly low number of comments. That's not why we do this...or at least that's not why I do this. I want a conversation. I want a debate. I want to learn and to discuss and to grow. I want to see passion for the movement again.

I love my little piece of the internet whether I'm getting thousands of visits per month, or the paltry 539 I received last month. I just need to figure out if I'm getting out of it as much as I'm putting into it. In that sense, I totally understand Ron Shevlin's decision to pull the plug on his amazingly well-executed blog. He (just like me) sets an incredibly high bar for himself. It was obvious how much energy, passion, and time he put into his blog. And it was obvious that he made a huge impact in doing so.

But this is draining. While I can't speak for Ron, I feel confident that mental exhaustion was a big part of his decision. It's tough to come up with compelling things to write on a regular basis. And it's even tougher when you do so in spare time that simply doesn't exist. And it's absolutely devastating when your supposed "conversation", unsubsidized and developed with time you don't have, becomes essentially a one-way street.

I have a loyal group of readers and commenters that I love dearly - both professionally and personally. I just need to refocus on things that, right now anyway, are more rewarding: time with family, my employer, and my career goals, for example.

I have always thought that blogging about a cooperative of cooperatives should be more...cooperative. Thanks to Gene's post, and some really kind Tweets from Jimmy Marks, Denise Wymore, Ginny Brady, and Christopher Stevenson, I am rethinking axing this blog. Instead, maybe there's a way to get some of the best CU bloggers together to create a multi-voice, credit union editorial blog. Sure, my Google Reader account aggregates content in a way that this blog already, sort of, exists...but why are we duplicating so much energy? Last month, I approached Mark McSpadden about a potential CU Warrior/CU Skeptic video podcast series to debate credit union issues. Why wouldn't additional collaborations work?

Just a thought.

Thank you for all of your support, and for reading this way too long rambling about things that are much more revealing than I intended. I just thought it was important to hear my side of the story.

A Credit Union without Deposits and Loans?

2009-01-27T17:50:00.000-08:00

I have always seen credit unions as being consumer advocates. I mean, aside from typically offering great rates, low/few fees, and a wide portfolio of personal finance solutions, our job is to help members become better savers, better investors, and better money managers. Doing what is best for members is supposed to be what's best for the credit union, right?

Well, according to our current business model, that's not necessarily true.

If a member wants to open a new savings account, employees are compelled to offer the credit union's best possible product to fit the member's deposit profile and term requirement. There's nothing wrong with that. But what if the member can get a better rate elsewhere? What if the member can get a MUCH better rate at another financial institution? This situation puts the credit union's mission, and its bottom line, in a precarious position.

Could a credit union model emerge to address situations like this? Not just a gentle paradigm shift...a dramatic change? I mean, what about a credit union without deposits...without loans?

What I'm proposing is adapting the travel agency model and the Progressive Insurance model to the financial services world. This new credit union's purpose is completely selfless: find members the best possible pricing on all financial services, whether it's in house or not. For an annual fee, members basically get a completely unbiased advocate who scours the marketplace to find the best deal.

This credit union could generate operating income by negotiating contracts with major financial institutions. Because in a small way this credit union becomes a marketing arm for these financial institutions' services, it would be worth paying some sort of "subscription" or "broker" fees to be included in the search process. Membership dues, educational seminars, and a dramatically reduced operating budget as compared to traditional credit unions would further help this model work.

To avoid conflicts of interest or "pay to play" scenarios all relationships with any financial institutions would be disclosed to members up front. As the credit union builds capital, future deposit and loan products could be offered...but only if they are priced at on a "price match" basis. In other words, if the credit union cannot offer (based on current spreads) the best possible price on a product they simply lead the member to the market leader.

This model saves members time, money, and gives them something they don't necessarily have in today's marketplace: a totally non-biased, trusted guide through the complicated world of personal finance.

CUWarrior Featured on the CU Soapbox

2009-01-14T15:20:00.000-08:00

A funny thing happened this week when sending out a press release about my credit union's Holiday Skip-a-Pay program...Jimmy Marks at Digital Mailer, facilitators for the CU Soapbox, asked if he could feature the story on the blog. Of course I agreed, happy to see this wonderful reminder of credit union magic get some publicity.

This program was not unlike many Skip-a-Pay programs you have seen at other financial institutions...except one very important detail: we had absolutely no fee attached. Members were allowed to skip any non-mortgage loan payment for the month of November or December just as a courtesy to help their families through a tough holiday season. The results were amazing, over 20% of our loan agreements were amended for a total over $870,000.

To me, these results were made even more amazing (remember, I work for a $200 million credit union) by comparing them to the results of a recent ING promotion (thank you to Jeffry Pilcher for the heads up on this one). ING forgave January mortgage payments for 500 lucky customers. Now, keep in mind that having your payment forgiven is a much better deal than simply skipping a payment and extending the term. So, in that light, ING's program was a better deal for those select few who won. But our program was open to everyone. And, the fact that we gave up the monthly cash flow from over 4,000 of our loans outstanding is no small feat in this or any other economic environment.

To read more about this story, please visit the CU Soapbox. This is a great forum for passionate people in around the credit union movement to sound off on topics ranging from TARP to Blago, and everything in-between.

Unique Banking Needs? Hogwash.

2009-01-11T07:17:00.000-08:00

A topic I have become increasingly consumed with is the misconception and overestimation of financial services market fragmentation. There is great focus these days on the emerging Gen Y market and all of their "unique" and "distinct" needs and preferences. I have no doubt whatsoever that this generation is unlike any that has come before - if for no other reason in the way we integrate technology, especially communications technology, in our lives.

I have had trouble, however, agreeing that our needs and preferences are all that "unique" and "distinct" as they pertain to financial services. We need loans, payment vehicles, investment vehicles, convenient access to our cash, and financial advice all at the best price possible...just like every other generation. We'd prefer not to be forced to deal with a financial institution.

So, to me it is the financial institutions, and particularly our marketers, that have fragmented (or tried to fragment) the market. I believe, to the contrary, we are a very mature industry with a very stagnant set of customer/member needs and wants.

This isn't exactly a bad thing for credit unions. I think we have unique ways with which we can deliver and price these services - dictated by our ownership structure. But let's not fool ourselves into overestimating this generation's uniqueness in terms of their financial service needs.

'Twas the Night Before Christmas

2008-12-24T09:14:00.000-08:00

'Twas the night before Christmas, and my blog was amiss
Not one Morris(s) was lurking, neither Partee nor Chris;
The posts were written and developed with care,
In hopes that commenters soon would be here;

The Twitterers were nestled all snug in their beds,
While visions of trackbacks danced in their heads;
And me in my helmet, and rossgram in his hat,
Had just settled down for a virtual chat;

When on my Skype App there arose such a clatter,
I sprang from the keyboard to see what was the matter.
Forty-three windows were closed in a flash,
Along with sixty-five firefox tabs clogging my cache.

The screen paled my skin with its ghastly glow,
As those with with 12Seconds most assuredly know,
When, what to my wondering eyes should appear,
But a collection of friends, I highly revere.

With a little old driver, so lively and keen,
I knew in a moment it must be Trey Reeme.
More rapid than a Trabian cursor they came,
And he whistled, and shouted, and called them by name;

"Now, SHARI! now, SHEVLIN! now, HARDIN and BLISHEN!
On, DIXON! on ROBBIE! on, WYMORE and WILLIAM!
To the top of the porch! to the top of the wall!
Now dash away! dash away! dash away all!"

As sharp as a Pilcher and kind as a Ginny,
As playful as Jimmy and as cute as Mac Mini;
So up on my screen this collection they flew,
With a sleigh full of comments, and a few laughs too.

And then, in a twinkling, I saw on my screen
A beautiful picture from Kelly and Matt Dean.
Just one of many beautiful kids born this year,
To Hostettlers, and Reemes, and Trotters, and Chatfields (soon, I hear).

As Gracie and Landon and Avie reveal,
Friendships on Twitter are most certainly real.
Comments and tweets and trackbacks are great,
But connections with people carry the web's most weight.

I sprang to my bed, gave my wife a big kiss,
And she whispered softly "Is there something I missed?"
"I'll blog about it later if I find time to write,
HAPPY CHRISTMAS TO ALL, AND TO ALL A GOOD-NIGHT!"

(I'm not much on rhyming, so sorry if I didn't put your name in here. No disrespect was meant. For example, you try rhyming Gerbino, Williams, LaFlamme, McAlpine, Henkel, Garland, McSpadden, Randolph, or Meek with...well, anything.)

Pizza Hut Requires SPAM Opt-In?

2008-12-06T15:53:00.000-08:00

Pizza Hut has decided forced email opt-in is perfectly acceptable for customers who choose to order online. News flash: this tactic is not acceptable at all.

I couldn't imagine requiring my credit union members to sign up for our electronic newsletter just to be able to use our drive-through windows. Or, what if my grocery store required me to give them my email address to use the 12 Items or Less checkout lane? Would that be OK for you? Of course not.

Nonetheless, that's exactly the type of thing Pizza Hut is doing to customers who attempt to order online. At the end of the PizzaHut.com registration Page 1 (of 2), you are required to opt-in to receive email solicitations, offers, etc. from the red roofed pizza giant. Are you kidding me?! Forced opt-in to SPAM?!? For making your job easier?!?

Pizza Hut has every right to ask for permission to send me marketing material - I don't blame them for that at all. What in the world makes them think, however, that forcing me to "receive information about Pizza Hut® coupons, promotions, announcements, events and specials" is OK?

Not only am I not going to accept that agreement, I'm going to go find something else to eat...like a Papa John's pizza.

Warrior's Playlist 11/24/2008

2008-11-24T17:24:00.000-08:00

Not sure how many of you will share my musical tastes, but I thought I'd share with you the last ten songs I've added to my iPod playlist:

Clay Pigeons, John Prine
Enough Rope, Chris Knight
Chasing Pavements, ADELE
Whiskey Bent and Hell Bound, Hank Williams, Jr.
A Pirate Looks at Forty, Jack Johnson
Long Monday, John Prine
Chicken Fried, Zac Brown Band
Taking the View, Thad Cockrell
I Never Did Like Planes, Robbie Fulks
Good Man, Josh Ritter

TARP: Sometimes the Means Justify the Ends

2008-11-20T16:44:00.000-08:00

As a young boy, I loved watching the Indiana Hoosiers play basketball. Under Bob Knight's tutelage, you could always expect the cream and crimson to play tough man-to-man defense, run a nearly flawless motion office, take only high percentage shots, and minimize turnovers. You also knew that their student-athletes were going to class. They were going to graduate. They were going to toe the dramatically conspicuous line that the General drew for their academic, public, and private lives. Otherwise, they had no place at Indiana.

You can't beat the results, either. From 1971-2000, Knight's Hoosiers went 661-240 and won three National Championships.

Here's the thing, though. Even when they didn't win...they played the game the way it was meant to be played. Philosophically, they were as pure as a Steve Alford jump shot. Basketball fans, whether they loved Bob Knight or thought he was the devil incarnate, had no choice but to be drawn to the purest form of basketball since Dr. Naismith's peach baskets became iron rims.

How is the credit union game supposed to be played? If Raiffeisen, Desjardins, Filene, Bergengren, and Maxwell are our Naismith, Wooden, Newell, Smith, and Knight, how would they define a successful season? Is winning the focus? If so, what does "winning" mean? If not, what is the objective? Is the goal to fill the bleachers, the classroom, or the coffers? Is there ever justification to set aside credit union core principles for a specific end result?

I'd argue no.

I'm a cheerleader for the credit union movement because I think, with extremely few exceptions, we're playing the game the right way. I know that the purists among us -- the credit unions that are doing things the right way -- didn't get involved in the risky lending and investment practices that led many banks down the path to ruin. Subsequently, the vast majority of these credit unions are healthy, well capitalized, and continuing to provide the same, top-notch member service and dedication to constant improvement that they always have. Failure by any of these credit unions will only come as a result of uncontrollable environmental factors: loss of a primary SEG, natural disaster, massive staff reductions in partner SEGs, etc. They are playing the game the right way, but are simply losing.

That scenario, while sad, is much easier for me to digest than hearing about a select few credit unions, whose particular environmental factors suggest that the fundamental credit union model should thrive, reaching out their hands for TARP money. It's one thing to display blatant contempt for our founding philosophies. It's quite another to tarnish the good name of all credit unions because of your actions. The 99.9% of us who are doing things the right way deserve better. Your members deserve better. Our credit union founding fathers deserve better. Taxpayers deserve better.

Knight is the winningest coach in NCAA history because he preached discipline, respected the game's history, and held his program to the highest of standards. Thank God most credit unions do the same. I wish our trade associations would take note - and stop lobbying for legislation that would permanently scar the movement's image just to save a few Kelvin Sampsons. Or at a minimum, set up a public forum within which your member credit unions can openly discuss the pros and cons of such moves.

Decisions, Decisions: iPhone, Storm, or G1?

2008-11-16T14:48:00.000-08:00

How's this for ruining a Christmas surprise?

My wife and I are going to get each other smart phones for Christmas. The only problem is: we have no idea which one. I've been set on buying an iPhone since the 3G was announced, but we were already locked into a Verizon contract and chose to wait it out to avoid the early termination fees.

A lot has happened since then.

First, the T-Mobile G1 powered by Google was launched. This little device is very cool, boasting wi-fi access, location detection, the Android operating system, 3G network, and the Android Market for add-on applications. It also sports a full QWERTY keyboard that slides out from underneath the screen.

Then, the Blackberry Storm was announced. The Storm does a lot of what the iPhone can, and allows my wife and I to stay with Verizon (and, hopefully, take advantage of further price discounts through the "new every two" program). What I LOVE about this phone is the prospect of a "clickable" touchscreen. I have fat fingers, and the few times I've used an iPhone/iPod Touch I have had quite an annoying time with their "virtual" keypad. There is absolutely no way this phone will attract the types of apps that the iPhone and G1 will, I realize, but Blackberry has a strong reputation for its useful out-of-the-box application package.

So here I am. A little over a month from making quite an expensive decision, and I am more confused than ever. I love the iPhone. I'm a huge music fan, and have become somewhat of an Apple fanboy. But the iPhone keypad may be its Achilles heal for me. The G1's physical keypad and the Storm's "clickable" twist on the touchscreen may be enough to sway me away from a device that otherwise (well, besides its camera) seems to be a very solid choice. The prices attached to these three options are very similar, so really the decision is going to boil down to the above considerations and recommendations from people like you.

So, which one would you choose? This is a very expensive purchase, and I don't want to choose incorrectly. Thanks for your help.

Maybe It's Time to Laugh About the Credit Crisis?

2008-11-14T17:24:00.000-08:00

I spent a great amount of time in the past month creating, editing, and publishing the following video about the causes of the current credit crisis. My focus was nearly 100% on subprime mortgage lending.

I have always been sure that better explanations and better presentations existed, but I was quite comfortable with my finished project. It wasn't until today that I realized where I goofed. I was too serious. Sometimes, when things get really bad, the best thing you can do is sit back and laugh about it.

William Azaroff linked this video on his blog today that pulled off what I absolutely could not. You see, I tried to make the material digestible by simplifying the subject matter. This presentation makes people listen because it's, well, funny. Though you won't be able to figure out whether to laugh or cry sometimes, one thing is for sure: this video keeps your attention. Thank you, William, for unearthing this!

Why I Support Filene and Obama (not a typo)

2008-11-07T16:34:00.000-08:00

Take away his fortune, fame, success, leadership, entrepreneurial achievement, philanthropic accomplishment and charming good looks, and I would consider myself a modern-day Edward Filene. OK...it's obviously a stretch. But let me explain.

Filene was a man who put philosophy into action. So am I. Filene believed in consumerism, capitalism, and the power (good and bad) of marketing. So do I.

He believed that one of the most important obligations that an American has is to his/her job - with hard work, dedication, innovation, and passion for creating satisfied customers being imperative. I believe that too. Filene also believed that in return for these qualities, workers should be taken care of by their employers. I couldn't agree more.

He believed in the power of self-help - that people, at the end of the day, must take responsibility for their own betterment. Amen, brother. He believed in cooperative self-help - that by electing to cooperatively tackle a problem, people had a better chance of allowing each other to help themselves. Preach it, Ed!

He hated usury, and believed that there is nothing more important than delivering the best possible product at the best possible price to consumers. Anything outside of that was inefficient and unsustainable on both macro and micro levels. My philosophy exactly.

He believed in credit unions. He believed that democratically owned and operated, not-for-profit financial cooperatives could play a vital role in providing low-cost access to credit to individuals who, outside of the credit union structure, seemed doomed to inefficient bank usury. You see, Filene knew that a democratically-operated financial institution had no choice but to serve its members. They are the shareholders. Thus, any earnings, profits, gains, etc. directly improved the lives of member-owners. So, what you have is this system in which members dictate the financial services they receive - from pricing, to products offered, to fee structure. Essentially, then, members are receiving the best possible products and services at the best possible prices. How cool is that?

Bad organizational decisions, when made, are made in good faith. At the end of the day, though, all decisions in such democracies are the will of the people: the members. I take comfort in that.

That takes me to my point (finally, I know). Anyone that knows me knows that I am a conservative. I believe in small government, low taxes, and a strong national defense. I believe that in America all people of all walks of life enjoy the promises of our Declaration of Independence: life, liberty, and the pursuit of happiness. I believe in the greatness of people - that at the end of the day truly free people are compelled to be good to one another.

I believe in less laws, not more laws. I believe that being successful in America should result in national praise, not punitive actions. I believe that in most cases hard work and a little luck are all it takes to succeed in the land of the free. And I believe that the combination of free markets and democracy, while imperfect, are the secrets to sustained economic and social greatness.

I did not vote for Barack Obama.

I happened to be in San Francisco on election night. What amazed me was the palpable feeling in the air. Aside from the dancing in the streets, horn honking, and pedestrian cheers, you could just see a sense of happiness on people's faces when Obama was announced as the winner. People were downright giddy - like kids on Christmas morning. Granted, this may have totally been a function of being in one of America's most liberal cities. But, the sense that I got was that America had spoken. I take comfort in that.

Democracy doesn't mean your "side" always wins. It means that, collectively, the people win. My political views will likely never allow me to vote for Barack Obama, but my patriotism and belief in American democracy requires that I respect and support the will of the people.

So, my vow to you is this: you will never hear me bash Barack Obama, the President. His election is the will of the people. And even though I know that many Americans did not afford this luxury to President Bush, I pledge my support, despite our dramatic disagreements, to Obama and his remarkable story. I must now trust that he will hold true to his word and be a representative of all of our people - no matter how we voted.

Filene and I could totally support that.

Current Issues in Credit Unions Episode #30

2008-11-01T03:56:00.000-07:00

Three lawyers and a Credit Union Warrior log onto a Skype teleconference....

Last week, I was afforded the sincere honor of guest starring on a Current Issues in Credit Unions podcast. Hosted by the amazing Rob Rutkowski, and joined by Hal Scoggins and Katherine Weber, Current Issues in Credit Unions Episode #30 gave me a wonderful opportunity to speak with three of the best minds in credit union law.

What I love about this group is their approach to regulation. While many in their field seem to look for reasons why a new project will NOT work, this crew looks for ways to foster innovation within the confines of regulation. That's ideal for marketers like me who like to come up with wild ideas. Don't tell me why something won't work. Tell me what I need to adjust so the initiative will be both legal and effective.

Check out the podcast here, and make sure you go through their entire library for amazingly detailed discussions on current credit union issues, regulations, and their implications.

Our Structure 'Tis of Thee

2008-10-28T16:13:00.000-07:00

I reject the notion that America's greatness comes from its people alone. Don't get me wrong, our nation can boast some of the finest human beings the world has ever seen. But I believe that every country has great people. Our people simply aren't, by themselves, a competitive advantage.

We are a country rich with natural resources: vast, fertile farmland, plentiful water sources, oil, natural gas, coal, etc. But other countries certainly have their fair share of mother nature's blessings. That's not it either.

I contend that it is the United States' Constitution, our structure, that makes us truly special. It's a system that rewards hard work, protects those who can't protect themselves, and gives our citizens a voice in how we are governed. It's a structure that encourages entrepreneurship, innovation, and self actualization. It's a government that, while far from perfect, has allowed America to be one of the most prosperous, generous, and socially responsible nations this world has ever seen.

Credit Union insiders often claim that it is our people that make us special. I halfway agree. I DO think we have great people - the best employees the financial services industry has to offer, and the best group of members on the planet. But it's our structure that attracts those employees. It's the sincere belief that we are making a difference in people's lives that drives our workforce's passion. Trust me, most of us could make a lot more money in other fields. But we love what we do. We have our structure to thank for that.

It's our structure that attracts members by the millions. Our member owners like knowing they have a say in how their financial institution is run. They like knowing that our business purpose is not to take advantage of unwilling customers with high fees and unfavorable rates. Rather, credit unions' mission is simply to help members become better savers, wiser consumers, and more comfortable borrowers. We serve our communities with financial literacy education, outreach programs, and cooperative missions because our member owners demand it - not because of any associated tax implications.

See, to me it is our structure that makes credit unions special. Thankfully, it's a structure that attracts the best resources, the best people, and a better alternative to traditional banking.

Describing the Financial Crisis

2008-10-17T09:24:00.000-07:00

I'm a curious critter. "Why?" is my favorite question, which will come as no surprise to anyone who knows me. You see, I have an insatiable desire to understand not only the gravity of each situation, but how we got there. What were the causes? Who was involved? What were the motives? What were the causes of the causes?

That makes the current international financial situation both extremely interesting, and annoyingly baffling. The causes are many. The solutions are blurry. The public understanding of these complexities is dubious.

Thankfully, though, organizations have grasped the general failure of news organizations to fully (and truthfully) help consumers understand, and come up with their own solutions. My Alma Mater, The College of William & Mary, hosted a town-hall type meeting to do just that on Wednesday (see it here). I enjoyed the honest, unbiased discussion, but the main thing I took from this session was comfort that, while things are bad, the doom and gloom that many chicken littles are exclaiming are overblown at best.

That same day, I launched the "Ask Jack" blog at my credit union. This site allows members to ask our president direct questions about what they see, read, or hear in the news. My feeling was that if people are seeking honest answers to their pressing questions, who better to answer than the CEO of a not-for-profit financial cooperative who has always exhibited conservative, member-first business practices?

This morning, I got to hear John Allison (BB&T's CEO) give his take on the current financial crisis at a breakfast forum hosted by the Winston-Salem Chamber of Commerce (they plan on making video of this session available online). This was another re-assuring look at our current situation. Though he admits things are certainly rough right now, Allison asserted that failed banks should have failed - that it was actually a good thing long-term.

He also suggested the best plan (policy wise) I've heard thus far to deal with the mess: a 10% housing purchase tax credit. This would only be good for existing homes (used?). Essentially, he made the argument that house prices are still about 10% too high. To help battle off the sudden deflation of home values, this plan would allow purchasers to get houses at a "discount," while preventing sellers from suffering any further (well, at least that 10%). In essence, his plan would allow the housing market to lick its wounds and get back to its feet. Still a lot of money, but a far cry from $700 billion.

Allison did, however, just like the William & Mary professors from earlier in the week, caution against knee-jerk policy reactions. You see, the solutions will not be political. The solution will come in the form of Americans starting to save more and spend less. The solution will come in the form of American ingenuity. The solution will come in the form of returning to consumers, investers, and businesses alike a sense of responsibility for their actions. The solution will come in the form of credit unions taking a bigger share of the personal finance market.

Next week, I am offering the first of three presentations for our credit union's SEGs about the financial news of our time. I'm confident that, though I will not be able to replace lost wealth in their 401(K)'s, lower home value, or lost trust they have in many for profit financial institutions, I can continue to cement in their minds that credit unions are safe, sound, and determined to be part of the solution.

CU Dream Teams

2008-10-15T10:10:00.000-07:00

Say Bill Gates, Warren Buffett, or some other filthy rich dude decided to create a credit union as their next charitable project. Their approach would be simple: collect the best talent the industry has to offer, and back them with all the capital necessary for that “dream team” to establish the perfect credit union.

Would it work?

Let’s look at the New York Yankees for clues. Their approach for as long as I can remember has been to buy as much talent every off-season so they have All-Stars at every position, and an ace throwing every pitch. In the mid- to late-nineties this worked like a charm. Every year, it seemed Joe Torre, Derrick Jeter, and Mariano Rivera were being joined by an amazing cast of talented (and highly-paid) free agents. And every year, it seemed the New York Yankees were winning 100 games and going to the World Series.

Fast forward to the last 5-6 years. The Yankees’ strategy is still the same. They keep building the best team money can buy. Names like Mussina, Clemens, Giambi, and A-Rod have all come aboard, but the winning ways have for the most part gone away.

No help there.

 Let’s look at Hollywood, then. Have you ever seen a “dream team” cast work? I have. But for every Oceans 11, The Godfather, or Casino, there’s an Insomnia, Get Shorty, Wild Hogs, The Royal Tenenbaums, or Batman & Robin.

No help there, either.

How about music? The Traveling Wilburys and The Highwaymen were good, but didn't enjoy lasting success. They certainly didn't prove that the whole was greater than the sum of their parts, anyway. Each of the artists in those collaborations were much more successful individually. Bands like New Edition and Temple of the Dog further proved that sometimes star performers are better separate from each other.

So what gives?

To me, it all boils down to grouping the right superstars with the right roles with the right mission. Just throwing a lot of money and a lot of talent at a problem doesn't guarantee success. I don't think you can just cast a net, gather a ton of talent and expect to be successful. You need to make sure that they are all working toward the same goal, don't have excessive overlaps in specific talents, and are placed in the appropriate chairs with which they can make the biggest difference.

Here's the deal. The talent you should be looking for wants to be around other talent. They want to be a big part of something big. They want to know that their passion to manifest the highest levels of effort, imagination, and teamwork are matched only by their co-workers' energy in the same regards. They want to be compensated for their efforts, don't get me wrong, but they don't want to be unjustly rewarded. These people truly want to earn their paychecks - and want to continuously improve upon their standards of living through well-deserved pay increases.

The Tampa Bay Devil Rays are proving as we speak that chemistry goes a long way. One player on the Yankees (A-Rod) makes more money than the entire Devil Rays squad. They succeed by minimizing egos, and maximizing performance. And I will bet my bottom dollar that they will reward their players to the best of their ability (however limited). Can your CU do the same thing? Can your CU build an effective Dream Team? An All-Star at every position, working toward a common goal, excited to be a part of something special. That's my dream...and it should be your CU's dream, too.

Partnership Symposium Takeaways

2008-10-05T15:53:00.000-07:00

After a few days and finally a few hours of sleep with which to collect my thoughts, let me share a few of my takeaways from the Partnership Symposium hosted by Forum Solutions/Trabian at Forum Credit Union, October 1-2, 2008. This was a truly amazing conference, and I would encourage any of you that get a chance to attend next year. At a minimum, check out the sessions recorded by Brent Dixon here.

1. Be Careful Who You Vote For. I was lucky enough to be voted in as a guest speaker for this conference. I'll be the first to admit that as speakers go, I'm not particularly good. Heck, in the first 5 minutes of my session I thought I was going to pass out from nervousness. I've felt very guilty about my lack of polish since the second I walked on stage. Not that I didn't think I had a compelling story to tell - it's just that I could have told it a lot better. Hopefully, I at least encouraged attendees to reexamine the concept of promoting thrift, and how the services they offer help define what they stand for. Simple passion does not make for a good presentation, but I hope it helped.

2. Technology isn't redefining credit unions - it's allowing us to better implement our founding principles. Matt Dean, William Azaroff, Gene Blishen, and Morriss Partee all discussed how technology can help credit unions build tighter community with members, collaborate with other credit unions, and promote thrift. What was striking to me was the fact that even though their solutions were high tech, they were deeply rooted in traditional credit union philosophy.

3. Forum CU gets it. This is something that became quite clear to me after the Partnership Symposium last year - Forum Credit Union is as classy as classy gets. From the types of attendees and speakers they attracted, to the friendliness and professionalism of their staff, to their unique hosting style, it's immediately apparent that this is a credit union that is progressive, in-tune, and focused on innovation.

4. Ron Shevlin gets it. What made this year's Partnership Symposium for me was the implementation of Ron Shevlin as moderator. Ron's obvious goal was to keep speakers honest about how they presented their information, how/if their stories were relevant to attendees, and whether or not they substantiated their claims. This was no doubt a great experience for speakers and attendees, as it enhanced our presentations, better defined conference takeaways, and (for anyone like me who welcomes constructive criticism) educated us on how to improve our messages. He was seemingly harsh at times, but never irresponsibly. Those who disliked his methods are missing the educational opportunity he provided. Those who listened to his critiques, and tried to understand the reasons behind his lines of questioning, will become better listeners and better speakers.

5. Every credit union needs an Andy Janning. Employee training is an extremely difficult (and often thankless) job - especially in an industry with such frequent changes as credit unions. Forum CU's AVP of Training and Quality Service, Andy Janning, has the perfect perspective on the irreplaceable role a top-notch training program can have on your organization's performance. "Knowledge isn't power, performance is," Janning quipped. You see, he knows that the only measurable in his performance is his trainees' performance. He's not passionate for recognition, he's passionate for people - and his success is evident with every Forum employee you meet.

6. Web 2.0 is cool, but it sucks compared to live discussion. It's strange how much adoration I had for blog/Twitter friends I have never met. It's even stranger when you actually meet those people and they're better than advertised. My virtual buddies, and you know who you are, are true inspirations for me.

7. The right people are unified. I have been distressed over the past few years about an apparent shift from inter-cooperative credit unions to inter-competitive adversaries. I have always thought that we are better off working as a team against banks, than against one another. Some people don't get that...but the attendees at this conference did. This wasn't a place for competition or one-upsmanship, this was a place to learn from one another to improve the services we offer to members. Simple as that. What a refreshing change! Now let's hope it spreads.

8. I've never been more excited about the future of the credit union movement.

Short and Sweet Post About Relevancy

2008-09-15T19:25:00.000-07:00

The following comment was just made on OpenSourceCU.com in response to a debate about a Resource One campaign that blatantly ripped off Currency Marketing's Young & Free initiative:

no amount of tutt-tutting here will actually affect public perception of R1. Why? Cause the public doesn’t read this, and more than likely, doesn’t care.

My first instinct is to try to argue this point. I mean, after all, apathy concerning the credit union movement is what we are desperately trying to change in our little piece of the blogosphere. Have we been successful? I'm not sure. I do know, however, that the attempt has been pure. I take solace in that fact.

But the point I will make is simply this: this network of credit union people about which James scoffs are writing, debating, and sharing ideas about a movement that they truly love - and for which they have a genuine passion for improving. If a consumer stumbles upon one of our posts (even the stupid ones I write about McRibs and Brett Favre), the result will no doubt be overwhelmingly positive. That's why our industry is special. Our Technorati rating, comment totals, or site visits will not change that.

McRib - the Brett Favre of Sandwiches

2008-08-30T07:25:00.000-07:00

McDonald's just dealt my waistline some devastating news: the McRib is back. Deemed disgusting by 85% of America (53% of statistics are made up), the 15% of people like me who love this processed meat delight get positively giddy when they learn that it's available for sale.

In the 1990's the McRib was available periodically as a specialty sandwich, but never on the permanent menu. Then, in 2005, a clever McDonald's marketer created the McRib Farewell Tour to scare fanboys like me into believing this was our last chance to have our beloved sandwich. I ate a world of McRibs that year...effectively reducing my life expectancy from 76 to around 49 years. When the "Farewell Tour" ended, so too did my passion for McDonald's.

Then came 2006, when McDonald's proudly launched the McRib Farewell Tour II. I was again a loyal customer, visiting nearly on a weekly basis. Then, the Brett Favre of fast food sandwiches was back again in 2007 for the McRib Farewell Tour III.

And now it's back again...

Enough already!

Consumers are smarter than this aren't they? Surely the reaction to these publicity stunts is negative, right?

Not sure. At the end of the day, whether I think McDonald's is playing me like an idiot or not, I will continue to buy McRibs (and totally disgust my wife). Is there a credit union lesson in here?

OK, I'm not going to encourage you to mislead your membership. But how about seasonal offerings? One of my favorite examples of a seasonal CU offering was Industrial CU's share certificate program last year that tied their rate to the number of yards the Seattle Seahawks gained each week. If they gained 450 yards in total offense, a 4.50% APY certificate was available. Cool program, right? It generates excitement, plays on local interests, and gives members a compelling reason to think about their credit union each time they see their favorite team's box score.

How about making every, say, February your credit union's official online bill pay month with incentives given for new sign-ups and number of bills paid?

Take a page from Discover Card's book, and offer extra rewards points or cash back on purchases in certain categories at different times of the year.

I think my point is that maybe McDonald's has learned that having the same menu 24/7/365 is boring. So too, is offering the same financial products/services at your credit union all the time. If you're creative, who knows? Maybe you can expand your membership like McDonald's has expanded my waist.

It's Not Nice to Tease

2008-08-26T16:45:00.000-07:00

I hate teaser rates.

Don't get me wrong, I understand why financial institutions use teaser rates. After all, getting new customers/members in the door is immensely easier when you can boast 0.9% APR car loans or 10% APY certificates. Truth be told, I have taken advantage of at least two credit card offers that promised a 0% APR intro rate for 12-18 months. For the responsible, intelligent consumer these teaser/intro offers can be great deals. Let's be honest, though, these companies don't offer teaser rates to be nice. And they surely expect to make money off of the deal.

What does that mean to most consumers? At least one of three things: 1) Deep in the 45 lines of fine print there is a "GOTCHA" line (assuming you can decipher the legalese) that explains how the deal will make your financial institution very wealthy; 2) The CMO behind the offer understands that most people receiving the offer will be either too irresponsible or too lazy to take full advantage of it; or 3) The deal you THINK you're getting is likely a far cry from what you are actually getting in the long run.

The message that your company is willing to deceive people to get their business is bad enough. But something I received in the mail yesterday has convinced me that teaser rates are wrong for yet another reason.

Sallie Mae sent me a letter to tell me that they lowered my interest rate on student loans to 3.010% APR because I have made 48 consecutive on-time payments. A reverse teaser rate? What a concept! Instead of raising my price over time because I'm hooked into a contract, Sallie Mae lowers my rate because I am paying as agreed. I scratch their back, they scratch mine.

Financial institutions, take note. Want a relationship with me? Want loyalty? Then don't give me your best deal up front. Instead, reward me through time for being a good customer/member. Offer a good rate up front, and promise your audience that the deal only gets better through time.

Want transience? Want disloyalty? Keep proving to me that my first impression was as good as it's going to get.

Will you be able to sell this to everyone? Maybe not. But you won't find yourself wondering why you can't retain your membership/customer base when your competitor down the road comes out with his latest/greatest teaser rate.

Dear Mr. Direct Mailer...

2008-08-17T18:14:00.000-07:00

Dear Mr. Direct Mailer,

I don't hate you. As a marketer myself, I understand that sometimes direct mail is the best way to get your message in front of your target market.

You've gotten sloppy, though. A few weeks ago, you sent me a customized catalog from the NFL Shop "personalized" with Philadelphia Eagles gear. Uhhh...I hate the Eagles. I know you may think I like the Eagles because I bought a Brian Westbrook jersey from you last year as a prize for a Football Pick'em 2007 monthly winner. Of the eight items I've bought from you in the past, your database will clearly show, seven of them were Indianapolis Colts items. That makes me a Colts fan...not an Eagles fan.

A few days later, you sent a letter to my wife on behalf of John McCain. This was very nice. In the package, you included an autographed picture of Senator McCain and his wife, Cindy (along with a "picture receipt confirmation" to be mailed back in with a sizable monetary donation). My wife's name is Devon. SHE is a woman. In fact, she's a drop-dead gorgeous woman. So why did you address the package to MR. Devon Davis? Do you think she likes it that you assumed she was a man? Though I on occasion dress in drag, I do not like it when you call my wife Mister. Besides, why risk using a title anyway? There's no reward and a reasonable chance of being wrong.

And why do you on behalf of Capital One, CitiBank, and American Express send my wife and I the exact same direct mail piece on the same day? If the offer is "exclusive" why do two people under the same roof get the same offer? Do you think this makes it more likely that your message will be read or considered? Does your database not know to eliminate duplicate entries at the same mailing address?

You see, Mr. (Mrs.? Ms.? Madam?) Direct Mailer, I totally understand that sophisticated databases have made modern mass mailings possible. I just think you should realize that a successful campaign doesn't risk using incorrect and unnecessary information.

Sincerely,
Mister Mr. Devon Davis