There are so many trends which have the potential to transform how we do business in the future. Shrinking margins, increasing regulatory pressure, and in our market, financial institutions struggling to gain competency serving a newly [since 2005] credit-impaired population are just a few trends that will be relevant in 2012.

We're ahead of the curve in reaching out to credit-impaired members. Serving families and businesses in the margins of the financial mainstream has been part of ASI's institutional DNA for fifty years. The national trend to differentiate ourselves in an increasingly competitive environment is something we have long taken very seriously.

As a community development credit union and CDFI, we are closely following the anti-Wall Street movement. This is a trend which has the power to transform the national consciousness regarding what credit unions do and why we exist. As an industry, we teeter on the precipice of great, unprecedented opportunity. 

Mignhon Tourné
President/CEO
ASI Federal Credit Union
Harahan, La.

The most significant trend occurring among the work of credit union volunteers, both board and committee members, is a need for formal commitment to remain current and informed on both trends and changes in the worldwide financial market place.

Volunteers must remain current on governmental regulatory changes, the systematic development and expansion of financial technology and on the worldwide economic and financial trends.  Each of these three areas significantly impact the success, both today and tomorrow, of a cooperative financial organization be it large or small. They also impact the current day-to-day operational decisions and the development of long-range strategic plans for growth and service to the member.  Whether it's the euro's stability, the possibility of a country's financial default, the direction of Wall Street today or the new regulation just issued by NCUA, these  must all be considered in the decisions the credit union volunteer board or committee member is making today that will affect the credit unions' future.

NCUA has defined a basic level of financial competency that a credit union board member must have and that level of knowledge is directly related to the level of complexity of the financial organization.  Part of a credit union's annual strategic planning must be to insure its volunteers have the resources and understanding that continuous education and development is a requirement to continue effective member service. Financial services are being redefined and changing and new methods to communicate between the credit union and its members are being announced daily.

The credit union volunteer on the board of directors or a committee cannot afford to become complacent. Tthe credit union industry's survival and ability to continue being a people helping people industry depends on their competencies. 

Curtis Collins
Vice Chairman
JSC Federal Credit Union
Houston

The current trend that concerns me the most is margin compression. The net interest margin for mid-sized credit unions as of Sept. 30 was 3.35%. With net operating expense at 2.92% and provision for loan loss of 0.43% of assets, bottom-line return on assets is approaching 0%.  Interest income as a percentage of average assets is currently about 4.00%.

As more time passes, that interest rate remain at these historically low levels, loan and investment payments and payoffs continue to be reinvested at lower rates. This dynamic combined with reduced loan demand could easily cause a decline in the interest income ratio to 3.00% by January 2013. Current cost of funds is approximately 0.82% and with most deposit account rates already at psychological floors, the continued repricing downward of time deposits will likely only bring down cost of funds to 0.75%.

Most credit unions have addressed operating expense aggressively and it has declined significantly, but there is little more to be squeezed out of this number. Additionally, recent legislation is causing noninterest income to decline, which will likely offset any further expense reductions. A new paradigm is being created and the same old business as usual ideas will not magically create a positive bottom line. If there ever was a time for out of the box thinking, this is it. 

James Pendulik
Senior Vice President, CFO and COO 
Fairfax County Federal Credit Union
Fairfax, Va.

I currently see the role of the chief information officer changing in that it involves more operational strategy than technology. I spend more time aligning technology initiatives with corporate strategic initiatives. Personally, I do not think that the CIO should be driving corporate vision, however, they should have a seat at the table when important decisions are being discussed to insure efficiency.

To achieve overall success, the CIO and the IT department need to establish a relationship with each business unit to support overall objectives. IT is no longer a cost center but a value-added department that helps define and implement key business strategies. 

Heather Moshier
Executive Vice President
San Diego County Credit Union
San Diego, Cal.

Like the credit union industry itself, human resource management professionals face increasing challenges in our current economic environment.  These challenges take the form of increased government regulation and involvement, a focus on costs and efficiency, and an ongoing war for talent.

Government regulation has increased both in terms of the amount of legislation and the amount of scrutiny we receive from regulatory agencies. Claims for both discrimination and retaliation with the Equal Employment Opportunity Commission, and wage and hour claims and fair labor practice with the National Labor Relations Board have increased.  Making decisions about and setting policy for new areas of employee relations, like social media, have become increasingly important.

Human resources is being asked to do more with less. One of the easiest ways to gain efficiency is to turn to technology to facilitate many of the administrative tasks that we do in order to comply with regulations and to provide meaningful business metrics for decision makers.

Unemployment remains high, yet many jobs go for long periods of time without being filled.  That is because the skills needed for these jobs are not available in the unemployed population.  Technical skills in computer programming, data mining, web marketing and others are at a premium in the marketplace, and recruiters have had to be creative in finding and enticing these individuals. 

Lynn Stephens
Senior Vice President of Human Resources
Mountain America Credit Union
West Jordan, Utah

I think the value of grassroots engagement is becoming more widely accepted. After several years of grassroots movements that have successfully defined the debate on public policy issues [such as] the Tea Party and Occupy groups, I believe a heavier focus is being placed, once again, on grassroots activism.

As member-owned cooperatives, I think credit unions are in a great position to further incorporate this tactic into their advocacy efforts. 

Over the past 18 months we saw how effective a strong grassroots effort could be during the interchange fee debate. 

While we were not successful in getting the 60 votes needed for Sen. John Tester's (D-Mont.) bill, we came close and policymakers noticed.

 Credit union grassroots activities were critical in moving the Fed's interchange rule from the original 12 cents to the current 21 cents and can continue to be a strong force moving forward on other legislative issues. 

Nathan Muniz
Public Relations Manager
PSECU
Harrisburg, Pa.