The Savings/Member Ratio

Forum Solutions' Doug True wrote an interesting post on OpenSourceCU today about some credit unions' palpable complacency and unwillingness to take risks in product/service offerings.

"Folks, we can’t offer “free’er” checking. In my opinion, there is too much cookie cutter product offerings that are copied and launched with very little thought on what your members want or how they will see the new offering as relevant. Too many times a credit union simply just buys a new product from a vendor and launches it – differentiation is almost non-existent from the beginning and if it does exist it quickly disappears." - Doug True

When the industry's idea of innovation and collaboration is a "best practices" mentality, it's no wonder many credit unions struggle finding a discernible, relevant role in the financial services marketplace. Fear, reasonable or not, is the major factor here. Fear of regulators. Fear of losing one's job. Fear of rocking the archaic boat that has been too cozy for too long.

As not-for-profit cooperatives, I believe our biggest issue has been our success metrics. If members, assets, net income, number of branches, deposits, loans, capital/assets ratio and number of transactions continue to be our primary measurements, I believe we're doing our charters a huge disservice. "Grow or go away"?!? Says who? Honestly, that bugs the hell out of me.

How's this for an idea? Why don't we define success by the amount of money we save the average member? The savings/member ratio. And by savings, I certainly don't mean deposits. Calculate real value that your credit union is delivering to members. Consider your deposit rates compared to the competition. Look at comparative loan rates. How about fee income? Isn't this what we're in business to do? Aren't we supposed to be saving members money?

Listen, I'll be the first to admit that being responsible stewards of members' assets is an irrevocable charge - and I'm not suggesting we fall anything short of that. What I'm suggesting is that growth for growth's sake is not beneficial to members. I'm suggesting that most of our current metrics are too easy to manipulate to the detriment of our memberships. I'm suggesting that big successes require big risks.

I'm suggesting we start being credit unions again, not bank wanna-be's.

How to turn $3,200 in debt into $10,700 in debt - Use a Bank!

Despite making an average of $1,000 in payments every year, an Ohio man turned $3,200 in credit card debt into $10,700 in debt! Lima, Ohio's Wesley Wannemacher (according to Marcy Gordon, AP Business Writer) used a Chase card for $3,200 in purchases in 2001 only to see that debt level balloon 334% thanks to $4,900 in interest charges, 47 over-limit fees for $1,500, and $1,100 in late fees.

This is a trap many consumers are falling into. Whether it's from deceptive rates, misunderstood terms, financial illiteracy, or simple bait-and-swith tactics, many Americans are falling deeper and deeper in debt. Budgeting is a big part of the solution, but taking the time to fully understand your revolving credit agreement will go a long way in reversing this horrible trend. Take advantage of your credit union's expertise - let them help you compare and contrast credit card offers. Some are great deals, for sure...others can leave you with a mountain of debt (just ask Mr. Wannemacher).

http://www.kansascity.com/mld/kansascity/news/local/17008711.htm?source=rss&channel=kansascity_local