BIRMINGHAM, Ala.-Despite the toll the corporate failures and the economy in general is taking on credit unions, most are sticking with to their gameplan, experts told CU Journal.
In his current capacity as a consultant, former NCUA Chair Dennis Dollar has spoken with a number of credit unions that know the corporate rescue plan is going to make a dent in their balance sheets in 2009 and 2010, but they are largely staying the course they had mapped out for themselves before these problems came down the pike, he said.
"The majority of those credit unions are choosing to press on, provided they have the capital to do so. If they are treading close to the 7% level then it is a tougher decision to proceed on with branching plans, new products and marketing initiatives," Dollar pointed out. "Yes, the crisis is real and it must be monitored, but this, too, shall pass. If you wait until it passes to begin marketing again, you will have missed a two-year opportunity that may have been the best opportunity for credit unions in the last 20 years."
Cardwell Group CEO Jim Cardwell stressed the need for a credit union to revisit and clarify its business plans by closely examining strategic focus, project priorities, measurements and the overall business model, noting that the landscape could look very different "if you designed your focus even just six months to a year ago."
As assessments pile up and the macroeconomic news remains grim, Truliant FCU CEO Marc Schaefer is taking cues from former FDIC Chair Bill Seidman and has been straightforward with his employees about the hits to the bottom line.
"You treat them like adults," he said when asked what credit union execs should say to staff in these trying times. "We make it to the point and brief, but we don't withhold any critical information."
"The best strategy with employees is total transparency and openness," agreed Dollar, adding that leaders need to trumpet the upside potential in a down market because "how much upside is achieved is based on the day-to-day operation of the institution."
Tony Walker, CEO of NARFE Premier Federal Credit Union in Alexandria, Va., is opening up the communication lines even further by delivering "State of the Credit Union" addresses to SEG audiences and at financial education seminars.
"We were concerned about the perception from a membership standpoint and we wanted to stand there in front of our membership to give them an idea not only where the credit union stands today, but what is currently happening in the movement and the potential impact [to them]," he said. "This is a time that I want to stand up; I want my brethren to stand up and really understand the importance of understanding membership needs."
Walker is also holding frequent internal town hall meetings with staff, going over the challenges and opportunities that the credit union faces, but also reiterating the fact that there are real people behind the metrics that employees see every day.
"Some of the information we have is imperfect, but we're trying to reinforce that we're here to help members and re-emphasize the mission of people helping people," he said. "We really feel that we have a longstanding reputation and that perceived member confidence is extremely important. We want our members to have a voice within our credit union and protect the identity and legacy of this institution."
