SAN DIEGO - If credit unions expect to celebrate a 200th birthday, they are going to need to a lot of adapting or risk withering away and creating the kind of vacuum other providers will fill.
That was the cautious advice offered up by NAFCU President Fred Backer during the association’s annual meeting here, when it paused for a moment to cut a birthday cake marking the 100th anniversary of credit unions. Quoting the conference’s keynote speaker, Marshall Goldsmith, Becker noted that relying on the same strategies used in the past will not get credit unions “to the next level. To continue our great success for the next hundred years, we’re going to have to continue to adapt and work harder than ever.”
Becker pointed to the example represented by San Antonio, where there are numerous large, thriving credit unions with strong marketshare. The reason, he said, is due in part to the failure of savings and loans, which created a big hole in Texas when the industry crashed in the 1980s. Credit unions stepped up and seized the opportunity, he said. “Of course, if credit unions are going to seize the opportunities they have today, they will need to keep up with the changing times–and the changing needs of their members.”
The new opportunity, according to Becker, lies in the financial crisis facing many Americans today. He noted he has talked with numerous CEOs who have shared stories of homes credit unions have had to foreclose upon or cars that have been repossessed. What those CEO stories shared, Becker said, was the “element of surprise.” The credit unions didn’t know the members were in crisis.
“Why are we seeing a spike in delinquencies, a rise in foreclosures, and increased loan losses,” he asked. “Especially when our lending standards have remained just as strong as they ever were? Well, even though credit unions did not make poor mortgage lending decisions, many of our members got bad loans from other lenders. “
Still, Becker said the economy is actually doing better than many have suggested, and despite declines in ROA at credit unions the average net worth remains north of 11%.
“As President Kennedy inspired us to rise to the challenges of the time–let’s turn our trials and tribulations into opportunities and accomplishments,” said Becker. “Let’s make certain that the public understands we were not responsible for this mess. Let’s do all we can to help our members–and future members–who have been impacted! (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
