WEST LAFAYETTE, Ind.-When Purdue Employees FCU President Bob Falk decided to host a public "town hall" meeting to address the financial crisis, he knew he'd field some tough questions-like one from a member who asked if his credit union could handle a run on deposits.
"She asked, 'What if members rush in tomorrow and you lose $100 million in deposits. What are you going to do? Walk me through your balance sheet.' I did, and it's not a good story," acknowledged Falk about the explanation he shared to a group of more than 70 who turned out for the meeting at the Purdue University campus. "I don't care how good we look today-and we are doing well-I can't handle a large run. I told the group that I might be able to pull off a $100-million run. But I can't handle much more than that."
Falk explained to attendees, comprised primarily of credit union members, that he held the town hall meeting to educate them about the causes of the financial crisis, apprise them of the CU's strength, and let them know their money is safe. Falk told members that, "I'm providing this information because I don't want all of you to start pulling your deposits out. That's not good for any of us. Leave your money here. It's safe."
The 90-minute meeting included Falk handing out copies of PEFCU's balance sheet and going through it line by line.
"That was really fun to do because there is nothing hidden, no surprises-here are our loans and here are our members' deposits," Falk said. "I told them to ask me anything they wanted about the balance sheet and members really got into it. Some noticed that we were borrowing last year and asked why. I explained that we were heavy into student loans then, but that business has gone away this year because of changes Congress made and we are not borrowing now. We got into that level of detail. It was neat to see members grasping the information, understanding it, and caring about it."
While the meeting's goal was to boost members' confidence in the credit union through education, the event also created CU "ambassadors," who Falk believes will spread the word about PEFCU's safety.
"I had several members come to me afterward and tell me that they're going to tell their friends that everything is fine at the credit union," Falk shared. "This is a group of people who obviously care enough about this organization to come to the meeting, and I am guessing they are pretty vocal. And I felt it was a good demographic mix. I expected a lot of retirees, and I had some. But equally, I had a mix of people in their 40s and 50s."
The $520-million PEFCU alerted members about the town hall meeting through an e-mail message. But Falk said that's as far as the credit union will go with using electronic communication or advertising to carry a strong explanation about the causes of the financial crisis and the credit union's safety.
"To really explain what's going on you can't do that in an ad," Falk said. "Plus I wanted the personal interaction. I think that is most effective, and you can find out what's on your members' minds. I even got to talking about credit default swaps and how those have affected the big banks. You can't describe credit default swaps in an e-mail."
Falk said the credit union plans to take the meeting "on the road," shortening it to an hour to fit into "lunch and learn" opportunities at its large SEGs.
"I think the next six months are very important to get out the message about the credit union's safety," Falk said. "I would like to do one lunch and learn in each of the next six months."
