Need To Be 'Vibrant': The Post-Durbin Dilemma

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RANCHO CUCAMONGA, Calif.-Figuring out how to make money in a "post-Durbin environment" and demonstrating they remain "vibrant" should be at the top of most credit union's strategic planning lists, according to CO-OP Financial Services.

Caroline Lane, SVP-business development, marketing, believes taking a hard look at debit card portfolios will yield some new revenue opportunities. "It's certainly time to look at debit portfolios, do portfolio optimization, and really understand how members are using their debit card," Lane suggested. "Offer them incentives to do transactions in merchant categories in which you earn a little more money. There are all kinds of insights you can get if you dig into the data. Just a few basis points change in usage patterns can really improve your debit income."

CUs should be on the lookout for activities that are siphoning off of debit transactions, such as different types of ACH transactions and payment of bills through bill payer sites outside of the CU, and create plans to recapture those lost funds. Policies around cost-cutting and outsourcing, two practices that have become much more prevalent among CUs during the recession, should be carefully examined, as well, Lane advised.

She cautioned that credit unions may have become too "draconian" in their attention to lowering expenses and should be careful not to cut into technology budgets, as that money is needed to drive growth and maintain a progressive image with members.

"I would encourage credit unions to strike the phrase 'hunkering down' from their vocabulary," Lane said. "We've all been riding out the storm but it's time to show members we have a pulse."

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