WASHINGTON-With public awareness of credit unions reaching a "tipping point," some are urging CUs to make greater use of their board members to represent them in their markets.
During a recent webinar, "Expanding your reach in the community through active board member ambassadors," on CUtv, Callahan & Associates' online webinar channel, two Callahan representatives, along with current and former credit union CEOs, detailed how CUs should take advantage of the current climate.
Chip Filson, president of Callahan, said both internal and external drivers are exerting an influence on credit union boards. The internal factors he cited are CU performance, CU strategic plan assessments, and leadership transitions as many CEOs retire. External: field of membership changes in local markets, the economy, regulations, competition and consumer expectations.
Regarding the latter, Filson said the market is witnessing a tipping point for credit unions. "I believe the sleeping giant has finally awakened and this is now being recognized across the nation," said Filson. "Credit unions received a lot of positive awareness from the media during the credit crisis. The crisis part is over now, but that doesn't mean problems do not exist. We think 2010 will be the year of the consumer. Boards must consider their credit union's role in their local economies. There is no single model for best board practice."
Sharon Simpson, director of marketing and administration for Callahan, noted two positive trends: credit union membership growth is up the last two years, and over the last decade some 1,900 CUs have expanded their membership by more than 200%.
"This shows the size of the opportunity we have," she said. "There is a big opportunity to benefit more consumers in our communities."
However, Simpson said, penetration rates are declining as the number of potential members rises. "There is a tremendous amount of work to be done, and engaging board members makes sense. It is a cost-effective way to enhance visibility in the community because board members have ties with other organizations. There is a synergy there credit unions have not yet tapped."
Perhaps more significantly, consumer attitudes are changing. Simpson said Arianna Huffington is promoting her "Move Your Money" pledge as a way of boycotting the big banks.
"I think that idea really resonates with people today," Simpson declared. "They don't like the government bailouts and are looking for local solutions. Credit unions have made a lot of strides and are poised to take a bigger market share-but we have to be smart."
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VACAVILLE, Calif.-Travis CU is a $1.6 billion credit union in Vacaville, Calif. that formerly served Travis Air Force Base but became a community charter in 2002. Patsy Van Ouwerkerk, the credit union's president and CEO, said its former seven-member board was 100% retired Air Force personnel and 100% Caucasian in 2002.
"We wanted to be more representative of the communities we served, and we also needed to replace aging board members," she explained.
The solution: a "Volunteer at Large" program. The program consists of educational classes conducted by Van Ouwerkerk and other senior staff plus heavy community interaction. Topics for the class portion include the history of Travis CU, the differences between credit unions and banks, the roles and responsibilities of the board and supervisory committee, back office and other operations, business services, lending and marketing.
Today, Travis CU has 12 volunteers. Its board has expanded to nine members, plus three on the supervisory committee. Of these dozen, six are retired Air Force, three are in education, one is from local city government, one is a contractor who serves the base and one is active duty military.
All volunteers are required to participate in community involvement, political advocacy and attend CU conferences, Van Ouwerkerk stressed, as such actions are reviewed annually at time of renomination.
"Our board members are very passionate about our credit union," she said. "We do a large number of events every year and the board helps us by representing the credit union. The Volunteer at Large program has increased awareness of our board, adds to the pool of available volunteers and gives us an orderly succession plan."
As a CU changes, so should the volunteer make up, she advised other credit unions. "Boards should be representative of the membership. We are able to communicate expectations for the board to the new volunteers through the program."
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GERMANTOWN, Md.-Charles Thomas is a current board member and former CEO of $240-million Mid-Atlantic FCU, Germantown, Md. He said it has a community FOM for Montgomery County, one of the wealthiest and most over-banked in the country.
"We were chartered as an IBM credit union in 1968," he recalled. "We took on the entire county in 2003. We had a very stable board, with a 25-year average term. Initially, the board was 100% IBM employees or retirees."
As with Travis CU, Mid-Atlantic's board has adapted with the switch to a community charter, Thomas said. Today its board remains 60% legacy IBM representatives, but "forty percent and growing is people from outside IBM. Because the county is very affluent, our new board members are highly educated."
Mid-Atlantic is targeting and recruiting specific individuals to become board members, Thomas continued. He said the new role for volunteers is to help the CU understand the needs and activities within the community.
"They network on behalf of the credit union, and they have given us significant leads on business affiliates," he said. "These folks have been valuable."
