BankThink

Remember the good old days when visionary people got together and started the credit union movement? Well, I don’t either. After all, the first “credit unions” were established in Germany in the 1850s (I’m old, but not that old). Their mission, lo’ those many years ago, was to help common folk who weren’t being served by the banks of the time, and guess what? it still is!

In December 2003 I wrote a piece on how consumer debt affects CUs that observed, “CUs will also want to be careful [to] resist ‘chasing’ loans with questionable credit, just as they should resist ‘chasing’ yield in the investment portfolio.”

As I write this column the Dow just plunged 400 points because the price of oil went up–again–to a record high. The oil news, the Dow, mortgage foreclosures, skyrocketing food prices, and unemployment fears. The news today is filled with reasons to fear for our economy and to predict job losses and more loan defaults.

Consider the observation, below, for a moment:

Headlines everywhere are focused on today’s uncertain economy and continuing market dislocation. Daily, we hear of another mortgage lender or other big bank in trouble. To be sure, this is a time not seen in the financial industry in recent years. That’s why it is so critical for the financial press to be accurate and fair in its reporting.

Much has been written over the past few years about the growing threat of mortgage fraud. Beyond the FBI statistics, MBA workshops, and the burgeoning industry in fraud detection software for loan originations, the threat of closing table fraud is being overlooked. The failure to look at the “back end” of the mortgage loan process is occurring to the detriment of credit unions and threatens to derail the many advances made in fraud detection and prevention to date.

I am disappointed with the tone of the CU Journal report of our May 21 announcement about our pending merger with US Alliance CU. We are pleased to be joining with an organization whose 57-year history of service to government employees and other Denver area residents parallels ours in commitment to the best interests of our respective members.

So I’m bumming a ride on a late afternoon last week in Philadelphia with a couple of credit union execs who are giving me a lift back to the train station when the talk turns to member service and whether “today’s generation” is capable of delivering any level of service beyond mediocre.

You are the coach of your credit union. While this may seem like an overly simplistic analogy, the statement is true. Your effectiveness as a leader is directly related to you believing your role as a coach and subsequently understanding your coaching responsibilities.

NASCUS, the professional association of state credit union regulators, applauds CUNA Chairman Tom Dorety’s emphasis on the importance of capital reform in the “CUJ Q&A” feature of the May 19, 2008 edition of the Credit Union Journal.