Credit union executives in private settings have begun whispering the "D-word" in discussing the current economic crisis: depression. While the first credit union in the United States was formed in 1908, a president named Franklin Delano Roosevelt felt that creating a federal system of credit unions was a good idea in 1934, on the heels of the Great Depression.<p>I certainly wouldn't put our country's current financial status on that level, but there's no denying there is a crisis. And credit unions are just as relevant today, if not more so, in providing services to those of modest means when they're having trouble getting financial services anywhere else.</p><p>The situation is ripe with opportunities for credit unions to play a role in the economic recovery of the American people and the nation. Credit unions are already doing their part to extend mortgages to those in need of refinancing from predatory subprime mortgages and providing loans to those who might not get them elsewhere, or at least at a much higher price. In just the last year, credit unions have doubled their foothold in the mortgage market; it's still small, but there's still plenty of time to take advantage of this opportunity while other credit sources are drying up.</p><p>The current problems in the student lending market also present credit unions with an opportunity. Serving college students with no assets of their own and parents of college students who can't afford to foot the entire bill–these are just some of the people credit unions were meant to serve. These are middle-income families plagued with rising home heating prices, high gas prices, growing grocery bills and struggling to pay for the skyrocketing cost of a secondary education.</p><p>Along the way, credit unions should plan for losses. Just playing the percentages, if you're going to loan more, you will lose more. Credit unions need to be sure they are mitigating their risks prudently by charging a high enough percentage rate for an auto loan to someone with B- or C-level credit, extending a loan to someone with little or no credit history based on other factors like rent and utility payments, and small-dollar loans to help repair a single parents' 10-year-old vehicle so they can get to work.</p><p>But if credit unions play their cards right–and by that I mean continue doing what they were founded to do–they could have much more to gain long-term than they might lose short-term. Providing services and loans now will create goodwill among the membership, generate priceless word-of-mouth advertising, and give lawmakers and regulators even more reason to give credit unions the authorities they need, despite outcries from bankers.</p><p>Credit unions got an athletic leg up last week when Treasury Secretary Henry Paulson, a former investment banker–notably from one that is still in business–noted that credit unions would be among the tools used to help whip the economy back into shape. That came as the result of some intensive lobbying by the NCUA, CUNA, and NAFCU, but their work is certainly not done.</p><p>After this week, after this year, as the country steers back out of the glare of economic meltdown, the lobbyists will need to hear all the stories of how each and every credit union served its membership, grew its financial strength and expanded its membership. Better yet, tell your lawmakers directly. These efforts, too, will provide a return on investment many times over when the Credit Union Regulatory Improvements Act or the next flagship credit union bill passes.</p><p>One item I've read that caught my attention was that the community banks could get a tax break for losses incurred from their Fannie Mae and Freddie Mac stockholdings. I'm sure they deserve it, but what are credit unions getting out of the current crisis? Obviously not a tax break but, as part of the solution to a problem they didn't create, credit unions deserve more than a pat on the back. Credit unions should decide collectively what they want from policymakers and then go get it.</p><p>I also couldn't help but notice that in President Bush's remarks last Wednesday he highlighted Paulson's Blueprint plan, the one that would eliminate a separate regulator for credit unions and others. This is absolutely something credit unions do not want–maybe credit unions should remind the Treasury Secretary of that.</p><p>–Comments? E-mail [email protected]</p>