Check 21, New FOMs Seen As Opportunity
What does the Check Truncation Act (Check 21) and more open fields of membership have in common?
Both offer vast opportunities to credit unions-but only if they recognize the potential pitfalls as well as the expected benefits, according to Milton King, CEO of TWS Systems, Dunedin, Fla.
"It's been exciting to watch credit unions really get the opportunity to stretch themselves and spread their wings, growing from just focusing on their one sponsor to community charters," King told The Credit Union Journal. "But while that made it easier to grow, it also opened them up to more fraud."
Similarly, Check 21 offers ample opportunity to trim costs and add efficiencies, but the credit union that doesn't educate its about the reduction in float time, for example, is likely to have angry members complaining about unexpected bounced checks.
"Members won't notice that the checks they're depositing are clearing faster and that they can get their money faster if the credit union doesn't pitch that," King said. "But they will notice it when they bounce that first check."
Credit unions need to take the next 12 months prior to enactment of Check 21 to market what the bill means to members.
"When Check 21 passed, I went out and got a bunch of [mainstream] newspapers and there wasn't a word about it, and that means the average member hasn't heard a word about it, either."