A few years back U.S. Rep. Barney Frank of Massachusetts told a CU group that he has never ceased to be amazed that in every meeting he has ever had with representatives of any and all industries, they invariably complain that the playing field is tilted in favor of some other provider or competitor, a complaint also voiced by those very same other providers and competitors when they meet with him.
It was hard not to recall Frank's comments after spending several days at the meeting that likely represents the biggest commingling of credit unions and banks outside of a courtroom or legislative hearing-the Bank Administration Institute's Retail Delivery Show a few weeks back.
The message you get from nearly everyone on hand? The money is always greener on the other side of the charter.
For credit unions it's hard not to be envious of the budgets, branch networks, media buys and reach of their big bank competitors, such as Bank of America or Wachovia, when those banks talk about their strategies and plans.
These very same banks, on the other hand, express envy at the bond credit unions have with their members, of the ability to move quickly without bureaucracy, of not being hampered by disparate legacy systems, and, even though they don't say it directly, of not having to drive to work every morning with one thought-how can I squeeze a few more pennies out of each of my customers so I can meet analysts' quarterly expectations? (The upside is this gives them something to take their mind off of worries it will be their job getting axed as one of the "eliminated redundancies" in the next merger.)
So which is best, to be a bank as the 21st century gets underway, or to be a credit union? This is one of those much bigger questions than just which institution has what total assets or what powers under its respective charter. Ultimately, it's really about what drives each individual and what is his or her value set. "Values" are more commonly associated with credit unions than banks-indeed, if you're talking values at a bank it's likely to have something to do with collateral-but that isn't to say there aren't thousands of people who haven't found value in a career in banking. During that career those very same people have likely presided over larger market share, enjoyed a higher profile and earned a bigger paycheck than a co-op counterpart, the latter pay gap being something that might chafe at some credit unionists as they head into work each morning.
And yet when that banker is driving home, he or she is likely envious of their credit union counterpart's ability to make a difference in someone's life that day, and the life of a community overall. You don't read many obituaries, after all, in which a person's ability during their lifetime to add a few basis points to the ol' ROA is acknowledged.
What really matters in the end isn't in which direction the playing field is supposedly tilted, but rather what you did while you were on it.
Speaking of the Bank Administration Institute's meeting, two more points:
* As reported in The Credit Union Journal Nov. 28, BAI has released research showing that almost three-quarters of all consumers have no interest in any type of "relationship" with a financial institution. That would seem to be pretty startling, given that most credit union conferences, especially those concentrating on business development and marketing, spend so much time talking about relationships it sounds like an E-Harmony convention.
The risk here is that credit unions will dismiss the findings as somehow only relevant to banks (the data is based on a survey of 3,700 consumers) or, at least, not applicable to their specific credit union, where every member loves them. (Consultant Rory Rowland was speaking to a credit union crowd a few months back when he asked them how many of them offered the best service in town. Every hand went up. When he then asked how many had the biggest market share in town, nearly every hand went down.)
Financial services has in large part been commoditized, and BAI's findings that 70% of consumers described themselves as either "uninterested" or even "skeptical" of any relationship with their financial institution, is worth further discussion and examination. In fact, that skepticism, rather than being reason for discouragement, should encourage credit unions, which have been rated highly in separate surveys as more likely to act in a consumer's best interest. Explaining what a credit union is and why it would do so would seem to be step one in developing those much sought-after relationships.
* Just a few years ago credit unions at the BAI show were like hemophilacs at a jousting tournament-the few on hand walked carefully about. That's changed in a big way. Credit unions have become a significant presence with more than 300 in attendance. But the respect afforded them both on the agenda (credit unions were all but insulted by the opening keynoter) and the exhibit hall floor (credit unions still are seen more as tire kickers than buyers) is lacking. All that seems at odds with what we continue to hear in Washington, where I believe it's been noted, the playing field is unfairly tilted in credit unions' favor.
Frank J. Diekmann is Editor of The Credit Union Journal.
