The Only Thing We Have to Fear Is Fear Itself

At the thoughtful and timely suggestion of Mark Meyer, executive director/CEO of the Filene Research Institute, I reviewed President Franklin Delano Roosevelt’s inauguration speech. The words crafted in the early 1930s were eerily prescient on the eve of President-elect Barack Obama’s 2009 inauguration as I write this column.FDR became president of the United States well after the stock market crash and more than three years into the Great Depression. Obama is inheriting his greatest challenge earlier in the fight with seemingly just as ambitious a drive as FDR, each recognizing that something must be done right away.However, times have changed. Today’s society is less patient with everything, including government, and exceedingly more skeptical. The general population of America is much better educated thanks to greater access to information, and Obama won’t enjoy the same gracious press that allowed FDR to mask his disability.And, I am certain that true to character, he will give every bit as eloquent a speech at his inauguration as he is known for. But, he should also heed the immortal words of FDR’s inauguration speech-as should credit unions.One line that particularly drew my attention from Roosevelt’s address was this: “Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.”Think about this in today’s scenario. Have they? Sure people are disenchanted every time they read about a Madoff scheme, but the thing to note is whether he and others will truly be “rejected by the hearts and minds of men.” In a time when there seems to be a Jack Abramoff or Kenneth Lay lurking under every rock, today’s American public has been worn down. Americans in general are too disillusioned, not to mention tied up in their increasingly hectic daily lives, to be outraged enough to affect change.One way that credit unions can help their members care about the betterment of our country is to continue being the trusted source for financial services. This status is proven time and again when there is a so-called flight to safety, but when the coast is clear, the money runs right back out again.Credit unions need to look at ways to make those members and their funds stick around long after the all clear signal. While I understand that most if not all budgets are getting slashed, one mistake that probably nearly every business makes is lopping off the ‘soft’ line items, like marketing (budgets that are already notoriously small at credit unions). If members and potential members don’t know that you’re there or offer a specific product they need, they won’t know you have a solution to fit their financial problems, and with them go your potential profits and deeper or new relationships.Of the scoundrels who caused much of the problems of the Depression era, Roosevelt said, “They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision, the people perish.”Credit unions have the vision, but they need to be able to express it more effectively. In part, this will come from marketing themselves appropriately to their members. Also, get creative with free or nearly free marketing, like providing financial education sessions at a local community center or retirement savings counseling for your SEGs. Involve your sponsors in promoting credit union membership as an employee benefit.“This nation asks for action, and action now,” is as true today as it was in 1933 when Roosevelt uttered the words. Credit unions are sure to feel the good and the bad that come along with this action, but hopefully the results will be a bit gentler than inaction.FDR characterized the resolution of the crisis he was facing this way: “Finally, in our progress toward the resumption of work we require two safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people’s money, and there must be provision for an adequate but sound currency.”The time-worn saying, history repeats itself, comes to mind. Similar legislative and regulatory maneuvering toward greater oversight of financial institutions will occur. Unless credit unions rise up in the political arena to defend themselves from unintended consequences, they will be crated up with the rest of the bad apples as political playmakers shake the trees to see what falls out; this only leaves you with bruised fruit. Credit unions may face a battle for their very existence if the regulatory consolidation recommended in Treasury’s Blueprint is given credence in the Obama administration, which has already floated combining the Securities and Exchange Commission with the Commodities Futures Trading Commission.The manner in which the pendulum swings between less and more oversight is made possible by the enabling doctrine (to borrow a phrase from my former constitutional law professor) this country was founded upon. As President Roosevelt said in his 1933 inaugural speech, “Our Constitution is so simple and practical that it is possible always to meet extraordinary needs by changes in emphasis and arrangement without loss of essential form.” Affect its flexibility to enable, and not disable, your credit union.–Comments? E-mail [email protected]