All Members Created Equal

I hope that credit union members are not treated like customers as advocated by Tom Farin, a Wisconsin consultant in the October 5th issue of Credit Union Times. There is a big difference as most of us know. Credit unions should not mistreat the most loyal members by classifying them as non-rate sensitive members. Loyal members will stick with the credit union based on the great service they have received over the years. It’s about more than just money. If it isn’t, where have we failed? It has been very difficult, if not impossible, for us to profitably serve the rate-sensitive members. If you don’t have a need for the funds and cannot profitably invest the rate-sensitive funds, why attract them? We don’t want to gamble by losing money now by mismatching maturities, hoping to make a profit later when rates rise. Also, by not having a large amount of rate-sensitive funds, we are able to pay higher overall rates on regular share accounts, which benefit the majority of the members. Segmentation based on discrimination has no place in a credit union operation. It is basically unfair to plan to pay lower rates to the majority of members, in order to pay higher rates to a select group. Also, we have no interest in paying the top rates in the area if it is unprofitable to do so. Currently we return about two and a half times more of our gross income to our members in dividends and refunds than the average for other federally insured credit unions. We would rather put member fairness first and be out-priced by the banks on certain types of accounts. Our regular share accounts are now nearly double our loans, and we have no need for costly excess funds. We will never compete by upgrading our armament as suggested by Farin, if it results in penalizing the majority of our members. Whose credit union is it? Jeff Rush President/CEO Firestone FCU Akron, Ohio