BOSTON -
Bryan was referring to what he said is a need small businesses have for deposit services that banks haven't fulfilled. "The credit union movement has an opportunity that is unprecedented, and you can and will grow through business services," he said.
Bryan is president of CU Business Capital, LLC a Miramar, Fla., based CUSO, and has worked in various banking operations throughout his career. Since making the switch to CUs, he is now persona non grata among his former colleagues.
Bryan is an unrepentant CU booster, and the boost CUs need and the way to grow the bottom line is through serving small to mid-sized businesses and their employees. Bryan stressed that he was not referring to business loans, but a full complement of business services. As many as 14 core products can come from a single business relationship, including loans, multiple checking accounts, multiple debit cards, merchant accounts, equipment leases and insurance sales. And that's just if there is a single owner, Bryan said.
"Why does a business need you?," Bryan asked. "For your stability; because community banks have disappeared in mergers and acquisitions. Businesses want a trusted partner. They don't want to be taken advantage of and they are open to working with credit unions.'
Bryan cited a Tower Group study that found 91% of businesses would conduct transactions through a credit union, and another study showing 89% of business owners keep their personal business where they keep their commercial business.
One competitive strength Bryan urged credit unions to recognize: They can pay interest on a business checking account while banks cannot by law. "Why not offer 3.5% (APR) on business checking," he suggested. "You say that's high? What are you paying on certificates. And fee income dilutes that (biz checking) yield.
"Is there anyone in this room who needs low-cost deposits or fee income?" he queried. Seeing everyone laughing at the obvious, he added, "That's what I thought."
For CUs, that increased business means added interest income and higher visibility in the community. "You can do this better than anyone right now and I do so enjoy eating the lunch of my former banking colleagues," said Parks.
Case in point: Eastern Financial Florida CU, Miramar, Fla., which capitalized CU Business Capital (other CUs now have a stake in the CUSO, as well), had total business deposit dollars of just over $20 million in Feb. '07, up from $15 million one year earlier before. The number of business debit cards has grown to 1,704 from 406 and fee income soared to over $127 million from $36 million.
"Do you know that there is 30% more interchange income on business debit cards?" he asked. "Take some action! Why are credit unions sitting on all this capital anyway? It's unconscionable to have 10%-20% capital. You're it! You don't have to overspend but you do have to invest."
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-Reporting By Carol Anne Burger
