ARLINGTON, Va. - While there's wide agreement the current economy has opportunities for credit unions, disagreement remains over how to best leverage it.
Both NAFCU and CUNA insist that they are putting forth their strongest efforts yet to ensure that potential new regulations are tilted in favor of CUs and that the public understands that credit unions are the good guys in an ugly chapter for the financial world. But others say that the movement has not done enough to get its message out there and has not taken the fight to the banks the way it should.
National organizations are stepping back and allowing state leagues and individual credit unions carry the message of safety and soundness to the nation's airwaves, on the Internet and in print publications.
Why No Full-Court Press?
When asked why CUNA was not leading a full-court press on the national level to try and further leverage the situation, SVP-Communications Mark Wolff cited costs and a "lack of appetite" for such an effort. He said a nationwide campaign would have cost about $26-million, and its effectiveness would be questionable. Wolff believes the de-centralized efforts will ultimately be more successful.
"We have an opportunity to keep doing what we've been doing because all predictions that this very weak economy will continue well into 2009 and perhaps into the year after that," he added. "There have been a number of stories in the media about how lending institutions are cutting back... when people need to borrow and how credit unions can step in and fill the void. A lot of this kind of coverage is taking place on the state and local level through the state leagues. I think they are doing a phenomenal job in working with their local media."
Both CUNA and NAFCU plan to keep the message positive, seeking to avoid anything that might contribute to the crisis in confidence being felt by many consumers.
"I think you can emphasize things like a better value and a different set of values compared to banks, but I think that can be done without questioning the safety and soundness of other (institutions)," Wolff said.
NAFCU CEO Fred Becker concurred. "You can say what you are instead of what you're not and still make the same point," observed Becker. "The economy at this stage is in a tough position, there's a lack of confidence and instability. We don't want to add to that. What we want to add is stability, we want to restore confidence."
CUNA does plan to push hard for credit unions' inclusion in any stimulus package by demanding that the members-business lending cap be eliminated, or at least increased. Vice president for Congressional Affairs Ryan Donovan estimates that credit unions could inject up to $10 billion into the economy via business loans should the cap be rescinded.
At Texas Dow Employees Credit Union in Lake Jackson, Texas, CEO Ed Speed is less than enthused by the national trade groups' positions, saying they send mixed messages.
"The fiery rhetoric of CUNA and NAFCU when they are strictly with credit union audiences does not match their public stance, which is far more timid," he maintained. "You get inside any meeting and you hear fiery rhetoric about the bad the banks are...It's almost like televangelists dancing across the stage riling things up."
TDECU's own rhetoric was recently found to be a bit too fiery. Both the Texas state regulator and the FDIC asked the credit union to stop claiming in advertising that credit unions are safer than their banking competitors. While the ads running "comparative superlatives" about safety are no more, TDECU has run a fresh set emphasizing superior member service and stressing its position in the community as a trusted financial advisor.
"Our fundamental philosophy, and our reason for being is so radically different from the for-profit banking institutions that led into this financial disaster, is that we are really better for people; we are better for the economy," Speed said. "That message still goes out strong."
Patrick Harris, director of media relations for the Ohio Credit Union League, however, stands behind CUNA's perspective, saying that the association has done an "excellent job" in its dealings with Congress. Though the Ohio league is not running advertisements on its own, it is distributing talking points and sample ads to its member credit unions; those messages also avoid directly attacking the banking industry and focus primarily on educating the public.
"We think by taking the education route is enough because it really brings credit unions to the forefront to a lot of people who didn't even know what a credit union is in the first place," said Harris. "People are suffering, and it's not time to take an opportunistic approach and use people's suffering to promote one financial institution over the other."
Striking The Right Balance
To his north, the Michigan Credit Union League believes it has struck the right balance to take marketshare away from banks while not undermining their implied security. The league is running its $700,000 "Credit Union Difference" campaign on the radio for six weeks "promoting credit unions as the trusted provider during this economic crisis," noted MCUL CEO Dave Adams, who has heard from some member credit unions pushing to be more aggressive and others who want to back off.
Adams said it is difficult for credit unions to properly differentiate themselves from banks without attacking them in some manner, but believes it's a mistake to attack any bank's soundness, given that its deposits are insured by the FDIC, which is in turn backed by the same body that backs credit union deposits-the federal government.
"We don't say banks are bad, we don't go after banks per se, but we draw attention to the credit union difference, which we think we have to do," he added, noting that MCUL's advertisements focus on the issue of trust, instead. "All federally insured credit unions and banks are safe, but this isn't just about safety, this is about trust. Who can I trust as my financial provider, as my advisor?"
