Challenge: Keeping CUs Top Of Mind

Register now

ANAHEIM, Calif.-Keeping the interests of credit unions top of mind for legislators in Sacramento, Calif. and Washington is a priority for Eileen Rivera, the new chairman of the California CU League.

Rivera, who is president and CEO of $316-million SkyOne FCU, Hawthorne, Calif., told Credit Union Journal it is important for the movement to realize there are still "many" legislators and regulators "wanting to fix" the financial services industry.

"It is good that they do, but we need to stay on top of things to get rid of ideas that won't help or will cost too much," she said during the California and Nevada CU Leagues' Annual Meeting and Convention here. "We need to be better about having one voice in the industry, which is difficult because not everyone feels we need the same thing."

2 Issues Lack United Front
Two of the issues Rivera identified as important but lacking unanimity within CUs are alternative capital and risk-based net worth, which she said are "tools" that some CUs feel strongly about while others do not. "We have to be able to strengthen our reserves," she said. "We have to figure out legislators and regulators and help them make the right decisions and get rid of bad ideas. It is going to be a crazy year."

Although many businesses-financial institutions included-feel at the mercy of a stagnant economy, Rivera insisted "a lot is in our control." "We have certainly done a lot at our credit union. The external environment is not in our control, but how we step up and react is. We need to be more efficient, be more proactive and be better sales people."

SkyOne FCU has made several changes internally during 2010, which Rivera said will help in 2011. She expects loan demand will be lax to the point of "almost non-existent, which forces us to be more creative with our investments. We have to generate revenue if loans are not going to be there."

Other priorities for next year: building relationships with members and reminding potential members what SkyOne does in the community and for its field of membership.

As for what all credit unions can do moving forward: "We need to build trust compared to the banks," she declared. "We have stood out as the 'good guys,' but consumers are still reluctant to switch financial institutions. We expect provision for loan losses will still be high and bottom lines will be lower than we would like, but it is a good time to get consumers to credit unions. They don't trust financial institutions in general, but they don't know about credit unions. We need to do more to raise awareness, but at the same time we have to be conscious about our balance sheets and the ratios regulators look at."

She noted William Taylor, founding editor of Fast Company magazine and a speaker at the conference, said the important question remains, "Why should we do business with you?" "We want our board and our employees to answer that question when consumers ask us, but we struggle. If we can answer that and prove our money is where our mouth is, that is the key. There is a huge difference between banks and credit unions but it is hard to articulate. We say anything we earn goes back to the members, not shareholders like the banks have-who wouldn't want to do business with an organization like that?"

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER