Overlapping Issues: Community CUs Get Advice From Most Competitive Market

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Increasing numbers of credit unions are competing against each other through overlapping fields of membership, but that isn't preventing them from cooperating, too.

"The overlaps just hasn't been an issue in many, many years," said Gene Roberts, president of Financial 21 CU, one of three CEOs of overlapping San Diego-based credit unions who participated in a panel discussion at last week's annual National Association of Community CU annual conference. "I think San Diego credit unions have really found a way to make it work for everyone by doing some cooperative things, in advertising, in marketing, in political action. I think we all have it in our minds that the competition is not from other credit unions but from other sources. In an area as large as San Diego County, which has a population of 2.9 million, there's plenty of business for everyone."

"San Diego," added Marla Shepard, president of First Future CU, "is probably the most competitive market in the world. And it's been competitive for some time.

"I do feel that competition among credit unions is a wonderful thing for consumers," continued Shepard. "It forces all credit unions to do a better job serving the consumer."

San Diego is just one of several markets in the country where conversions to and expansions of community charters have created a free-for-all in the credit union community.

At least seven credit unions, including five of the six largest in the area, serve all of San Diego County. But the heightened competition hasn't prevented them from working closely together when the need arises, according to Jim McPheters, president of California Coast Credit Union, who pointed to cooperative ventures on ATMs, shared branching advertising, Y2K, and state and federal legislation.

"We work together more often when we have to work together," he asserted.

One example is the CU Alliance, a group of 22 San Diego-area credit unions organized to foster public awareness about Y2K that continues today to create cooperative advertising and for political action purposes.

The group recently helped raise $87,000 for the Children's Miracle Network, and to donate 500 pints of blood for a local blood drive, on another occasion.

"All of this stuff is good publicity, creates more attention, more press coverage. It helps all credit unions," said McPheters.

"Just getting together on a regular basis keeps the cooperation going," said Roberts.

These three executives, all of whom run large credit unions, insist that smaller credit unions need not worry about losing their members to them.

"It's not about stealing someone else's members," said McPheters. "The likelihood is that smaller credit unions are doing a better job serving their own members."

"Smaller credit unions don't have to be concerned about the larger ones stealing their members; it's just not going to happen," McPheters added.

In markets from Maine to Florida and all the way to California, FOM overlaps are becoming more of the rule than the exception, according to Roberts. "It is worth the effort to get together with and talk with some of your fellow CEOs to cooperate where you can."

"Competition is here to stay and there's nothing I can do about it," stated Shepard. "Now I encourage it. I think the consumer is better for it if we keep that in mind and just move on."

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