Credit Unions in 2020 (or Will We Have Flying Cars?)

I read this article on CUNA’s web site a couple of days ago detailing how Dennis Dollar (how cool is that name) thinks the credit union landscape will look in the year 2020 (thanks to Deb Trautman for passing the article along). Now, I’ve never been one to put much faith in forecasts that stretch for a period more than 5 days (even the weatherman can’t get THAT period of time right) because things never look like you think they will. Heck, we were supposed to have flying cars 8 years ago according to many “forecasters”.

Distrust of long term outlooks aside, some of the predictions don’t quite jive with me.

• Credit union service organizations will exceed the number of credit unions;

My understanding of a CUSO (and please correct me if I’m wrong on this) is that they are cooperative organizations of credit unions designed to help them deal with regulatory issues and the like. They are like a credit union’s credit union. From Wikipedia:

A Credit Union Service Organization (CUSO) allows a credit union the ability to conduct business that they would otherwise be restricted from due to regulatory constraints. Most CUSOs are limited liability companies (LLC) which also provide a measure of protection to the credit union from the actions of their CUSO. CUSOs are usually wholly-owned subsidiaries of their corresponding credit union, and most if not all of the profits generated by a CUSO are returned to the credit union. CUSOs can also sell stock, usually to other credit unions, to help fund the creation and operation of the CUSO. In this situation, the profits are then converted to dividends and paid out to shareholders as specified by the CUSO's charter.

CUSO’s, like any other business, operate based on demand. I don’t see the demand for CUSO’s ever warranting more CUSO’s than actual credit unions. In fact; wouldn’t that be bad business?

• Credit unions will face greater regulatory pressures, and this will drive mergers;

Credit Unions may face an increase in regulatory pressures in the coming years. Some of it can be avoided by staying true to the credit union mission, and beyond that, showing people that we stay true to that mission.

Beyond the fact that some of this regulatory pressure might be avoided, the first bullet point about CUSO’s seems to be contrary to this one. If CUSO’s are there to help groups of credit unions stay in compliance with regulations, and there are more CUSO’s than credit unions, shouldn’t all the bases be covered?

It would be a shame to see so many unique, small credit unions disappear due to being unable to stay within regulatory guidelines. There is much to be said for a small credit union, dedicated to staying small, and dedicated to its membership. A prime example is Mt. Lehman Credit Union. They have, with the guidance of their General Manager, Gene Blishen, positioned themselves perfectly to serve their members. They know what those members want, and offer it to them. Things like their TextUs product cater to the people they serve. It isn’t a giant marketing campaign, but a product that connects the credit union with its members in a way many CU’s struggle with. As Morriss Partee would put it, they are a microbrew of a credit union; unique and incredibly awesome.

• Credit unions will market cooperatively nationwide

This is kind of a vague one. By “market cooperatively” does he mean a nationwide brand? If so, I think you already know my opinion. Credit Unions are a diverse animal. To brand something, it takes a common thread, product, or culture. By trying to put all credit unions under a single brand, it smothers so many cool, unique credit unions (like MT. Lehman) that have a brand that works for them and their field of membership.

Not only does it smother uniqueness, but branding credit unions under a single banner would be nearly impossible. There are so many different cultures, each credit union has it own way of doing things, and a brand requires a coherent culture throughout. When you walk into a Starbucks, you can pretty much tell what your experience will be. Credit unions are totally different. Walking into Boston Firefighters’ Credit Union is necessarily different than walking into Maine State Credit Union because the demographic served by each credit union requires a different approach.

In the first part of the article, Dollar is quoted stating that, “The megabanks will lead to a disconnect with local citizens.” If credit unions end up nationally branding/marketing how would we be able to connect with local citizens any better than a megabank? Our strength is in our diversity, not our size.

• Shared branching will be a key credit union differentiator, with nearly all credit unions participating nationwide, thus reinforcing a national branding campaign.

I’m sorry, but shared branching is not a differentiator. Shared branching is a way for credit unions to compete with the nationwide banks, but that’s as far as it goes. With BoA having branches on every street corner, the fact that you can do business at many credit unions nationwide does not make us different, it makes us the same. It is something we certainly need to educate our members about more often, but to say it differentiates credit unions from banks is nearly outrageous.

My take on credit unions in 2020?

Credit Unions, in my opinion, will be the main provider of community banking. Not based on national branding, not based on shared branching, not based on mergers, but based on diversity. Our strength has always been, and will always be, our ability to listen to our members and provide them with the things they want. Credit Unions will collaborate, rather than merge, to deal with regulatory pressures. They will collaborate to form marketing efforts if it applies to a shared demographic. They will collaborate to pass innovative new products and services from one credit union to another, allowing each credit union to tailor the innovation to their members’ needs. What we need is not a national brand, but to work as a team of unique, individual credit unions. That is where the strength, differentiation, and innovation lie.

The Loop Out & About Episode 2

This Saturday, Maine State Credit Union hosted our Third Annual Walk to Stop Hunger in Maine. The past couple years we held it at the University of Maine in August. This year we moved it to Capitol Park, right in front of the capitol building here in Augusta.

Here’s some information from our Leagues site (the total number of Maine households differs slightly depending on the site you are looking at, such as The Good Shepherd Food Bank site)

More than 40% of Maine kids under the age of 12 show some evidence of hunger
19,375 Maine children are hungry
An additional 64,087 children are at risk of hunger
New data shows that 12% of Maine households, representing 161,000 people, experience food insecurity
Hunger and the risk of hunger are widespread among Maine's low-income families with children
The likelihood of experiencing hunger or the risk of hunger is directly related to income
Children living in households which experienced hunger or the risk of hunger are more likely to experience health or school-related problems.
Several groups are found to be at greater risk of hunger in Maine; children, adults in low income families, disabled persons, persons with special needs, the elderly, those living in rural regions and the inner cities of Maine's largest urban places.
Several factors contribute to hunger in Maine; including income growth that is outpaced by cost of living; high level of underemployment; widening gap between rich and poor; illiteracy; and lack of consumer information on nutrition.

The event has grown every year. The first year had 180 walkers, year two had 196, and this year we had a big jump up to 225. Thanks to all those who attended, donated, sponsored, and walked for this awesome cause.

Since the Campaign for Ending Hunger was started by the league in 1990, credit unions state-wide have raised over 2.7 million dollars for the cause. In 2007 the campaign raised over $360,000 to help those in need in our state. This year we matched last years walk by raising over $17,000.

This year we expanded the event to include a band, bounce house, balloon animals, and a fun run for those under 10. It really was a blast. We all had a great time hanging out after the walk, enjoying some dogs and burgers and listening to some great tunes provided by the band “Good Friday”, my personal favorite was their cover of “Waiting on the World to Change” by John Mayer.

This year First Lady Baldacci, who graduated with a degree in food and nutrition, joined us for the third year running to speak at the opening of the event and also walked the trail with our CEO, Normand Dubreuil. During her opening remarks she cited some of the above stats on hunger in our state, praised credit unions and Maine State CU for their involvement in ending hunger. My favorite quote from her was “This is something that certainly with the economy we have now is facing all of us, this issue, and is certainly something that we as Americans can end.”

Thanks again to everybody who showed up on Saturday to donate their money, canned goods, time, and services to help Credit Unions put a dent in the hunger problem in our state.

A special thanks goes out to Mike Stewart who raised the most money of an individual (over $700). He’s a great guy with a great attitude and an incredible dedication to the cause.

Also, thanks to Anthony Geroux, collections Manager here at MSCU, who led Team Geroux to raise the most of any team (over $2400).

We all had a blast! I hope anyone who didn’t make it this year will join us next year for this awesome community event for a lot of fun for a good cause.

Edited With: Windows Movie Maker

Filmed With: Cannon Powershot

Music: You Know That (Is Nothing New) - Bill Mallonee

Softball, Irony, and The Joy of Office Sports

On Saturday after our Walk to Stop Hunger (which I’ll have a post on later in the afternoon), a few of us got together for a good old fashioned game of wiffle ball home run derby.

After a few rounds, Shaun (a teller here at MSCU) was up to bat. Hans (who has spearheaded our softball team) was pitching. Hans tossed Shaun a pitch and was promptly hit in the throat by a powerful line drive off Shaun’s bat leaving a sizable red welt on his neck. We all joked that he’d better not do that with a softball at practice!

Fast-forward to last night. Maine State Credit Union’s softball team met for our first practice. We started with a quick game of catch just to warm up, and then set up on the field for a bit of batting practice.

Not a half hour into practice, Shaun was up to bat. We even joked that Hans was safe because he was playing left field, what could possibly go wrong? Paul (our security officer) threw the pitch and Shaun ripped one out to left field. Hans moved in to make the play. The ball caught the top of Hans’s glove and hit him right in the eye. Talk about ironic!

He ended up requiring a trip to the ER, 5 stitches, and sustained a small fracture on his cheekbone. Hans, being “The Man”, still showed up today for work, though he is sporting a Captain Hook eye patch and a pretty good shiner on his right eye.

Despite the minor hospitalization, we had a blast, got to know each other outside work, and got a bit of fresh air. I'm really looking forward to the start of the season next Thursday.

Moral of the story? You never know when lightning might just strike twice.

P.S. It was Hans who wanted me to post the picture :-P

The CU Loop: Out & About

This is a pilot episode for what I hope will become a regular video segment here on The Loop, Hope you enjoy it! Check it out again next week when I'll be hanging out at The 3rd Annual Walk to Stop Hunger in Capitol Park here in Augusta.



As anybody who works at a credit union knows, we get tons of calls for donations and sponsorships each year. This year we were able to help a really great group of kids explore a new avenue for learning by sponsoring a robotics club at Messalonski High School. The team, called Infinite Loop (I knew they were cool as soon as I saw "Loop" in their name!), Competed in the US First Robotics Competition in Manchester, NH.

Mary Dolan and I got the opportunity to go check out a demonstration before the robot was finished. We were very impressed, but seeing the finished product on April 2nd during an open house they held was awesome. This was their rookie year, and I have to say that I'm looking forward to some great advances in their design as the years go on.

They placed 23rd out of 48 teams, a great showing for their rookie year. The team was sent the basic computing parts, sensors, and gyros from the FIRST foundation but the rest was up to the team. They put together the frame, connected the computer, power, sensors, pneumatics, etc. They were responsible for all the design and programing.

Most of these students were starting from scratch when it comes to robotics. With the help of the math team and with several team members in Calculus class, the team programed all the input and even programed the bot to operate autonomously for 15 seconds at the beginning of each event.

I'm very happy that we were able to help out this group of bright people. They got to experience a possible career path, explore new aspects of math they were learning (how great is it to actually get a concrete answer for "when will we EVER use this?"), and get some great hands on learning with everything from engineering to making T-shirts. In my opinion, there is nothing better than some hands on learning to build real life experience and see what the mind can accomplish.

So, Congrats to Infinite Loop for doing such an awesome job during their rookie year. I'm really looking forward to checking it out again next year. I even got invited to help them put the next project together come January.

Music: 86 Degrees - Epilogue
Edited with: Windows Movie Maker
Filmed with: Cannon Powershot

Thinking Outside the Box: Creating Relationships Through Promotions.

Here at Maine State CU we recently decided to bring a lot of the marketing under internal direction. We had the first meeting of our Internal Marketing Committee last week, and as far as I'm concerned it went pretty well.

The only thing I noticed was that most of the ideas that were brought to the table were very traditional and orthodox marketing initiatives.

We were discussing the possibility of a President's day auto loan promotion. We ended up deciding that the best thing to do would be to just promote our indirect lending.

I Would have disagreed, but to be honest I'm still getting used to the fact that my opinion has an impact on what we do here.

The usual rate promotions, or promoting something like indirect lending (which I whole heartedly dislike, but that's a topic for another post) aren't going to change peoples' minds about the credit union or get them to decide to go with us instead of a bank.

My point is, we need to think outside the box if we're going to bring in new members with a promotion. It takes something that Bank of America can't or doesn't offer.

Offer the membership something that they find relevant locally and makes them feel like they are part of the community. It could even be something that makes them feel like they are making a difference by taking out that auto loan.

Offer a discount for fuel efficient cars (I know, the "green" loan is becoming something of a staple these days) or a loan that makes a donation to a local charity or cause on every payment. Something that says "I'm part of this" and makes people feel good about taking the loan out at the credit union instead of a bank.

The whole point of a promotion is to get people to look at your institution, try it out, and build a relationship. With Indirect lending its just that, indirect. Being indirect is completely contrary to the credit union's purpose. One of the big differences credit unions should embrace is being very direct, very involved, and very personal.

Indirect lending might get a few people to take out loans with the credit union, but once that loan is paid off, are they going to stick around and keep their accounts here? Most of the people I see come into the credit union through indirect lending don't even know they have opened an account through the process.

If you want to create a relationship with new members, you've got to be working on that direct relationship from the get-go.

Alleviating the E-Fear: Educating Members on Safe Browsing

When I first started this blog, the IT department here at Maine State CU had a bet on when I would get a virus on an open connection. They gave me a week before my box got infected. Guess what? I have yet to get a virus, and probably won't (knock on wood).

It is IT's job to keep viruses out of the credit union's network, so they are inherently apprehensive about letting employees access the open Internet from their computers at work. There are security risks out there, but most of them can be avoided with a few safe browsing practices.

When you access the Internet it is a lot like traveling to a large city. The largest in the word actually. There are beautiful, stunning, and informative places to visit, but there's a fair share of shady neighborhoods as well. You wouldn't visit NYC without knowing where those areas are, why would you blindly navigate the e-roadway without a knowledge of were you can trust and where you can't.

You shouldn't let your members and employees go blindly into this new frontier. It is our job to protect their financial and personal information, regardless of the medium. We should be giving them a roadmap for this e-city so they can navigate it more safely and effectively.

I grew up in this electronic "city" and have wound up in some of those shady neighborhoods. I know full well the dangers there. Those of us who know the roads should be passing on that knowledge to the people looking to come visit. There is a need for an "Internet Guide Book" to lead members and employees to the roads they'd like to be on and avoid the roads that lead to unfriendly territory.

Education is the best alternative to locking your connection down. Why are we limiting our employees' access to great tools to connect, inform, and educate members? The answer is fear, but this fear should end with a good firewall, anti-virus, and education. Firewalls and anti-virus programs should be a back-up just in case...not the front line. There is no replacement for knowledge of the e-landscape.

I just wanted to share a few of the practices I live by in my day-to-day browsing of the Internet. They seem like common sense, but maybe it will help somebody.

-Your first search for a product or web site should be asking somebody you know in real life...not Google. Google is a great resource and you can find many great sites through it, but you are still visiting a random site you've probably never heard of when you click a link from the search page. Find a nerdy friend of yours and ask them where you can find that curry recipe you are looking for. If they don't have an answer, Google away and just be sure your anti-virus is running and up to date.

This is especially important if you are looking to purchase something or are asked to enter personal information. Know who you are giving your info and card number to. Ask around and see if anybody else has had experience with the site or product.

I'm not saying you WILL get a virus because you Googled for something, just that it runs a higher risk than a personal reference to the site.

-Don't accept a friend request from somebody you don't know. There are lots of exploits floating around Myspace these days and the best way to avoid them is to...well...avoid them. If some random (yet attractive) woman you've never met or heard of wants to be your friend, ignore it. Social networking is about connecting your social circle, not making a collection of "friends" so you can brag about how many you have.

Don't Download anything if you don't know where it is coming from. There is nothing wrong with downloading a widget here and a program there, but do it smart. Know the sites you can trust and don't accept a download you didn't intend to start. If you have any doubts, scan the file before you do anything with it. Oh, and never download a free screen saver you found in a banner ad.

-Speaking of Banner ads, use Firefox and install adBlock and NoScript. Not only will it save you from a possible infection, but it also rids your entire browsing experience of nearly all advertising. It will also block most automatic scripts unless you allow it on pages such as home banking or any other trusted site.

Those few things (along with knowledge of the landscape and a good anti-virus) have kept me virus free for years. Stay aware of your e-surroundings and you'll keep yourself out of trouble.

I'd love to start a program here at MSCU that is all about educating members on the web, its uses, and how to stay safe there. Do any of your Credit Unions run this kind of program?

Maine State CU Hosts the 3rd Annual Walk to Stop Hunger

We have scheduled the 3rd Annual Walk to Stop Hunger for April 26th. This year we'll be walking the newly finished Kennebec River Rail Trail! There will be a BBQ following the walk in Capitol Park and, if my assumptions drawn from the last couple of years are correct, some pretty kickin' prizes. The details are light right now, but expect periodic updates as we finalize the event.

Last year we raised over $16,000 at this event alone. This year we're hoping to get even more of the community involved as walkers, donors and volunteers. This is one of the events I love participating in. Its one of the few times we get to be out in the community trying to get people involved.

Any ideas, comments, or questions are very welcome!