Real CU Advantage: Relationship With Middle Class, Says Reich

HONOLULU–After outlining a series of global changes that are a threat to the business models of most industries, former Labor Secretary Robert Reich told credit unions there is hope for them. In remarks before NAFCU’s annual meeting here, Reich touched on issues ranging from the pending fiscal problems of Medicare to immigration to globalization. While he noted that competition to both credit unions and banks will only increase, he said credit unions have one advantage others don’t–America’s middle class is looking for them. “The competitive advantage you have is relational capital,” said Reich. “By that I mean you develop relations with your members, you are run by your members, and many of you are critical parts of your communities. Relational capital in highly technological economies creates a bond that is a long term competitive advantage. Many of our large banks don’t have it at all.”