New Products Help-Not Hinder-Traditional Values
Having worked in the credit union industry now for more than seven years, and having been involved with the credit union movement since I was nine years old when my father opened up my first share account, I've seen a lot of changes.
At one time, credit unions didn't offer checking accounts. Credit cards? Unthinkable! Money market accounts, certificates of deposit? Those were investment instruments and there was no place for those in a credit union!
Looking at this today, it sounds pretty humorous, but there was a time, not so long ago, that credit unions were all about savings and loans, and mostly auto loans at that. The idea of offering a checking account was foreign and strongly resisted by many in the movement. Credit cards encouraged people to go into debt and were counter to the credit union philosophy of financial thrift and planning.
In fact, for virtually every new product type and every evolution that has ultimately been accepted, there has been a strong resistance from the movement, often challenging the assault on our "traditional" values and even on the foundations of our very existence.
Yet here we are. We have survived, thrived, and continued to serve the people who need us, and many more as well. How can that be when so many decried the changes and predicted the downfall of the movement?
We exist because the market, our members, wants us to exist. Our members want what we have to offer-better service, lower costs, fewer (hopefully no) hidden fees. What about all of these changes, though? certainly that is having an adverse impact on the movement?
Not only are these changes not having an adverse impact on the movement, I believe that they are strengthening it. These new products and evolutions are the direct result of market forces acting on our business. These are the products, services and changes the members and potential member want and need.
Can you imagine trying to do business today without checking products? The market demands specific products and services and they will go somewhere else to get them if we don't offer them.
Concern over adding products as counter to what credit unions are all about isn't something just limited to the pages of history. Today there is considerable controversy over business lending and servicing products, not to mention payday lending products, overdraft payment approaches and more. Not surprisingly, we are hearing the same age-old rallying cry of "this is not what credit unions are about," "this is not why we are in existence," and "this is not consistent with credit union values."
I contend that this is the same fear of the unknown and resistance to change that has continued to plague our industry. The banks would like nothing more than to see the credit union movement paralyzed by the fear of change. The banks know that if a provider doesn't change and respond to the market conditions and what consumers want, they will take their business elsewhere and we, as an industry will wither and die.
If credit unions are to survive we need to offer the products that the market demands and we need to stop letting the "traditional credit union values" become obstacles for us. Credit unions, like commercial endeavors, need to turn those obstacles into advantages and leverage what is special about credit unions.
We can use our payday lending and overdraft protection products to help our members break the destructive cycles of over extending themselves and borrowing from predatory lenders.
We can use the profits from business products to help fund lower interest and higher deposit rates. We have options.
In other words, credit unions can remain competitive, and provide our members the products and services they expect, while still holding true to our values, because serving our members is what credit unions are about.
Lester Warby III is a vice president and chief information officer at Seattle Metropolitan Credit Union and a member of the CUNA Technology Council Executive Committee. He can be reached at LesterW