Internet Rates Part Of Puzzle

ORLANDO, Fla. - There's a piece missing for most credit unions when it comes to setting rates. In addition to ALM drivers, most credit unions also price according to their competitors-but not all competitors, according to Dr. William J. McGuire, president and CEO of Scottsdale, Ariz.-based McGuire Performance Solutions.

"What you almost never see is the national rates; what are those people on the Internet paying?" he said. "The competitive scale has gotten much larger. When I look at what people are doing to make decisions they are looking at Main Street, they are not looking at Wall Street. That was OK 10 years ago."

Despite Internet-based competitors paying rates above what most CUs are offering, McGuire does not expect all member deposits to eventually go out the door. "Won't all this money go away tomorrow as soon as everyone figures out how to use a mouse?" he asked. "Well, most people know how to use a mouse and this money sticks around. The problem with the Internet is there is no convenience. Try calling one of their 800 numbers. Try finding someone on this side of the globe to help you. Try walking into one of their branches."