BankThink

Last fall I participated in the Eastern European Credit Union Congress where I was asked to speak on credit union advocacy in the United States. The U.S. is not unlike other movements in that governmental bodies determine the fate or vitality of credit union movements based on the powers they provide and the corresponding regulatory structures they implement.

As I read the article on Professor Jackson’s recent Filene research paper on credit union capital in the Dec. 10 issue I couldn’t help but wonder what conclusions might be different if the selected base line of 1990 had been, say 1980 when the Carter year’s inflation peaked.

In our January 2008 issue of cent$, our American Airlines Federal Credit Union magazine, I took the opportunity to remind our members of some “hows” and “whys” we are different than other providers of financial services. For all business entities strategic “differentiations” are critical to long-term success and that is even more so the case for smaller niche players such as credit unions. In fact, Michael Porter, in the Harvard Business Review article referred to, sort of defines strategy as tightly linked-differences.

Welcome to 2008. Let me be the first to also say, “Happy 100th Birthday, U.S. Credit Union Community!” Let me also be the first to say, “Happy 99th Birthday, U.S. Credit Union Community,” as I like to cover my bases.

As I was leaving a board meeting on a fall afternoon in Northeast Ohio, I cut through a colleague’s office and exchanged pleasantries. “How’s your family? How are things going?” She said her headache from the morning had finally subsided–it began when a credit union member starting yelling at her on the phone.

Credit unions often misapply marketing resources because they don’t understand the youth market. Since “youth” ranges from newborns to those in their early 20s, it’s a wide audience with significant differences in product usage, interest and financial institution awareness. Only when the needs of each age group are analyzed can marketing entice youths or their parents to open accounts.

In honor of the Credit Union Journal’s 10th anniversary I collected the top 10 reasons I believe the credit union industry has the opportunity to grow and prosper in the coming decade. It turns out that the evolution of credit unions as service oriented financial services providers with strong community ties has positioned credit unions for success in our rapidly changing culture. Of course we need to educate the marketplace on what sets credit unions apart and deliver on our service promises to live up to our potential.

It’s a curse and it could be far worse–but it’s a tradition nonetheless,

An unhappy systems administrator who may want to teach a seemingly unappreciative credit union a lesson. An employee who is passed over for a promotion or a raise. A technically savvy database administrator who, for the right price, is willing to change someone’s credit history so they will be approved for a loan.

Much focus has been placed on Treasury Secretary Henry Paulson’s misguided plan to bail out subprime ARM borrowers facing initial resets. But not much has been said about the “Mortgage Forgiveness Debt Relief Act” (H.R. 3648), which would eliminate the taxation of losses on foreclosed homes as ordinary income. Under the existing tax code, a homeowner whose home is foreclosed and sold at a loss is liable for income tax on the loss, presumably to offset the tax break the lender will get.