What's on the mind of credit union directors? Let them tell you

WEST PALM BEACH, Fla. – It’s not easy being a board member today considering the ever changing and increasing challenges. In this past year alone, boards have had to navigate their credit unions through the USA Patriot Act, bankruptcy legislation, new competition from thrifts and retailers like GM, payday lenders, the Enron debacle and the economy in general to safety and growth. Credit Union Times has set out to discover what’s on the minds of savvy board members across the country. We wanted to find out what they think are the greatest challenges facing the credit union movement and their credit union in particular. Here is what we heard: “I see several challenges facing the credit union movement today.Competition from non-traditional sources (internet lending services, The Money Store)and the increase of bankruptcy filings are two of my top three. “The biggest challenge from my perspective however, is still the legislative threat of taxation for credit unions. As CUs’ field of memberships become more open due to a trend towards community credit unions, the common bond distinction we once enjoyed is perceived as gradually eroding. This, in and of itself, does not pose a problem for credit unions and in fact opens the door of opportunity for many potential members who otherwise may not have been able to participate in the movement. Still it represents the gradual elimination of one of the distinguishing factors between credit unions and banks and becomes another tool for the banking industry to use in driving us towards taxation.” Willie Everett IBM Texas Employees FCU Board Chairman Austin, Texas “On the short-term, the current economic situation, like any iffy times, is never a good thing for financials. They create a pressure on both credit unions and their members. On a larger, longer-term scale, I think the shortsighted enmity that banks have toward credit unions continues to hurt us. I don’t think credit unions and banks compete, necessarily for the same clients. Credit unions have for years sought out the underserved and served them effectively. Banks on the other hand send a message to their low-income customers of being undesirable by requiring large minimum balances and charging high fees. Given this, the banks’ attacks against credit unions must continue to be answered to safeguard our mission and our members right to choose a credit union over a bank. “Our credit union’s biggest challenge is achieving effective penetration of our field of membership. Our field is so varied it takes continuous effort to educate the masses that we serve not only actors, but also the Broadway community, essentially in its entirety. In order to sustain our growth and success, continued effort and attention need to be expended on this challenge.” Gil Rogers Actors FCU Board Director New York, N.Y. “One of the greatest challenges facing credit unions today is `getting out the credit union message.’ As more and more Americans gain access to credit union services, it’s incumbent on credit unions to effectively convey their benefits and unique nature. The information age is bombarding consumers with a vast array of communications; the challenge for credit unions is to make our message heard and understood using cost effective means. “This challenge will require our credit union to employ new thinking in communicating with current and prospective members. We’ll need to experiment with new avenues such as e-mail and key strategic partners. Our messages will need to be effectively timed, so they reach the consumer when their attention is open to financial issues. And, we’ll most likely be required to commit additional resources to this communication process.” Bill McCoy Nevada FCU Board Chairman Las Vegas “I think boards face the greatest challenge from the following issues: 1. How to balance the investment of funds in service delivery outlets. Is it a question of increased technology or more branches? 2. How to provide new products at the best price to members and at the lowest cost and be competitive in the market.” Bill Hamlin Charlotte Metro CU Board Chairman Charlotte, N.C. “Difficult economic times put a tremendous strain on individuals, affecting their ability to repay loans. The increase in personal bankruptcy has also become a challenge for credit unions. “For our credit union in particular our challenge is responding to members’ need for increased access to convenience services, especially remote electronic access including ATMs, home banking, bill pay, e-mail, applying for loans on-line and much more. Members are continuing to demand 24-hour access to credit union services, and we must have the ability to adapt to changing member needs.” Spike Robinson Vermont FCU Board Chairman Burlington, Vt. “As the number of credit unions continues to shrink, and those of us who remain get larger, our challenge is to remain a credit union not only in name, but also in the type and level of service to our members that we were founded on. We need to continue to do those member service things that made us special in the first place. Credit unions also face the ongoing challenge of generating non-interest income. Many have turned to CUSOs as a way of offering products and services to our members that the credit union cannot. Unfortunately there are probably not as many CUSO success stories as we would like. “Finally legislation aimed at limiting our tax-exempt status and/or fields of membership will probably always be a challenge. We must continue to project a united front in those areas that could do irrevocable damage to our movement.” Larry Ward Riverside County’s CU Board Chairman Riverside, Calif.