MADISON, Wis. – Credit unions reached out to their select employee groups during the push for passage of H.R. 1151, and now they're implementing a plan to strengthen their SEG relationships as a way to increase membership. A nine-member Small Business Task Force, including two league CEOs, has been appointed by CUNA Chairman David Maus and charged with strengthening CUs' relationships with SEGs by putting together "a package of services which will benefit small businesses." "It's apparent that those credit unions that have strong ties to their sponsor and with their select employee groups have higher degrees of penetration of their fields-of-membership than those that don't," said CUNA Chairman David Maus, president/CEO, Public Service Employees Credit Union, Denver, Colo. In addition to Maus, named to the committee are the following presidents/CEOs: Gene Poitras, Credit Union Association of Oregon, Beaverton; Gary Base, Community Credit Union, Plano, Texas; Gordon Dames, Mountain America CU, Salt Lake City, Utah; Charles Grossklaus, Royal CU, Eau Claire, Wis.; Bob Hoefer, Dupaco CU, Dubuque, Iowa; Grace Mayo, Telesis CU, Chatsworth, Calif.; Paul Mercer, Ohio Credit Union League, Dublin; and Marc Schaefer, Trulient CU, Winston-Salem, N.C. Poitras has been appointed chairman of the committee. Maus said the members of the task force were chosen based on their "extensive experience dealing with SEGs." According to Maus, the committee's mission statement is: "To focus on the development and implementation of a national program to help credit unions retain and attract members who are part of their field-of-membership and those who own small businesses. The committee will attempt to identify, initiate and consolidate separate small business initiatives and resources in an effort to maximize optimal benefits to small businesses and their employees while minimizing redundancy and building a unified program." "Credit unions have done an excellent job with providing traditional credit union services to employees of select employee groups, but they have not done as good a job serving the employers with things like employee benefit services and building a strong bond with the employer. There are a lot of resources available to credit unions for them to use to do this, such as through CUSOs," said Poitras. Kevin Lytle, vice president of national marketing for CUNA is working with the small business committee as the staff liaison to Poitras. Among Lytles' responsibilities to the committee is researching the credit union market and assess CUs' small business opportunities. Lytle said it's difficult to determine how many credit union members have a small business or home business. The Internal Revenue Service estimates that as many as 12 million income tax statements filed show the filers had a small or home business. "By default, we can assume that a large number of credit union members also work at this type of business," said Lytle. In addition, findings from research conducted by Arthur Anderson for CUNA during the push for passage of H.R. 1151 and other information extrapolated by CUNA Chief Economist Bill Hampel show that approximately 300,000 small businesses make up credit unions' fields-of-membership. There are no statistics that show CUs' penetration of their SEGs, however Lytle reported that data show credit unions have about 50% penetration of their entire FOMs. There are several reasons why credit unions have not been as diligent working with employers as they can be. For a time, offered Poitras, credit unions just pushed to get numbers of select employee groups in their field-of-membership. Now credit unions have to turn their attention on improving how they serve these employers. Schaefer offered his own reason for why credit unions haven't been more involved with providing services such as member business loans to small business members. Credit unions, said Schaefer, haven't always had the vehicles to provide these types of services. "H.R. 1151 essentially legitimized member business lending by credit unions, it created the regulations around it," he said. "There are a host of services credit unions can provide to select employee groups, and that's what the committee is about – finding out what those opportunities are and implementing programs to advance those opportunities," Schaefer said. Besides employee benefit services, the package of services would also include loans, automation products and various turnkey operations. The package would be put together and offered by what Maus referred to as "the committee's partners." They include CUNA, CUNA Mutual, and AACUL (American Association of Credit Union Leagues). Visa has also expressed an interest in being a committee partner. Poitras said CUNA has been pursuing discussions with the company to get a credit union person on the Visa Board. Likewise, the company for some time has been looking for a way to work with small businesses with credit card services, "so this would be a good partnership opportunity between Visa and credit unions," he said. According to Lytle, Visa has shared proprietary research with CUNA that shows small businesses are extremely dissatisfied with the service they've received from banks. "This represents a tremendous opportunity for credit unions to serve these consumers," he said. Poitras is hoping to have a committee meeting in Chicago within the next couple of months. At that time, the committee will discuss its mission and identify realistic priorities on what they can do to help credit unions do a better job serving small employee groups. -

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