One View On Opportunities For CUSOs From An 'Extreme Makeover'

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Credit union service organizations have shown the power of cooperation and an alternative to consolidation, according to the head of two CUSOs.

Lisa Renner, CEO of CU Holding Company and Beyond Marketing, told attendees of an educational session at the NACUSO annual conference here she sees nothing but opportunities for credit unions in chartering their own CUSOs or jointly owning the subsidiaries.

"Many CUSOs are achieving this today," she said during a session titled "Extreme Makeover: CUSO Edition," which plays on the name of a television show. "The foundation is a shared purpose, and multi-owned CUSOs are redefining credit unions' reach, range and robustness. If credit unions worked together, they'd have three times the number of branches as Bank of America. We have to outthink the competition."

A CUSO extreme makeover is a four-step process, Renner said: identify the community in need, assemble a collaborative team, demolish what is not working, and build anew based on the needs and wants of members.

To accomplish the first step, she told management to examine its CU closely "because others are. Ask a competitor what the credit union's image is in the community."

Renner, who also serves as chief marketing officer for NACUSO, advised CUs to watch closely trends such as increasing wireless Internet connectivity, the soon-to-be coming of age of Generation Y, out-of-control consumer spending, the negative savings rate, the flow of money from the U.S. overseas via remittance payments and the aging of the population to "inspire new goods, products, services and experiences."

"People crave Internet access 24/7. It is changing business-people want things faster," she said. "Generation Y is the future of credit unions. Not far in the future, but in just a few short years. What are credit unions doing to develop online products and services?"

One example of a potential opportunity: Renner said Zopa.com is "eBay for unsecured loans." Some users register for a loan, and others sign up to supply the money. "Will it stop with unsecured loans? Credit unions should be a part of this."

As medical advances come closer to defeating killers such as cancer and heart disease, people are living significantly longer lives. Renner asked if CUs are prepared to serve members well into the so-called "Golden Years." She said many credit unions lump older Americans into the "65+" category, but she cautioned the 85+ population is expected to increase to 9.6 million in 2030 from 4.7 million in 2003.

While people are living longer, they are spending at a faster rate, she continued. "We are seeing spend-aholics. The U.S. savings rate went negative this year. Payday lenders are expanding, and credit unions should offer alternatives."

Charter expansion has vastly increased the number of potential CU members, but has not brought a significant influx of actual members. Renner said meeting needs of consumers will help, and CUSOs are a way to accomplish many things.

On the other hand, she added, service organizations are not a panacea. "If it was easy, everyone would be doing it. There are advantages and disadvantages, but overall, the advantages outweigh the disadvantages."

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