Some Predictions That Were Best Served With A (Big) Grain of Salt

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What predictions about the future have missed the mark? The Credit Union Journal asked several people in the credit union community just that question. Here's what they had to say.

The 'Why' In Y2K Predictions

Jeff Taylor, NAFCU Senior Economist:

"Y2K. I'm not saying that it wasn't worth the effort, and I know a lot of people are glad they invested in it because they needed to make that investment in technology anyway, but some of the doomsayers on Y2K were pretty ridiculous," Taylor suggested. "Right now, I think a lot of folks mistimed this last cycle of the economy and thought it would rebound faster than it did. It seems like they just keep pushing it out another month, another month."

A credit union-specific prediction that Taylor says hasn't entirely panned out has been the view there would be extraordinary consolidation within portions of the credit union community."A couple years ago, there was a lot of talk about the corporate system and that with the advent of national fields of membership, they would all consolidate, and we'd be left with maybe WesCorp, U.S. Central and one or two others," Taylor related. "There has been some consolidation, and it's still happening at the regional level, but it's definitely not been as great as some thought. Perhaps it could still come to that, but not as quickly as had been predicted."

Old School Rules Still Rule

George Hofheimer, CUES SVP-Professional Development: "On Jan. 1, 2001, The Wall Street Journal had a headline that read, 'So Long Supply and Demand.' The whole idea was that everyone needs to wake up to the 'new economy' and that current accounting rules simply don't apply in this 'new economy,'" he related. "For a very conservative publication like The Wall Street Journal to suggest that basic rules of business don't apply is incredible. What we found out: giving it away doesn't work, and the basic rules of business do still apply. People got so giddy about the future that they were selling ideas rather than looking back at history to find the patterns from the past that do still apply to the present and the future."

CEO Has Some Questions

Frank T. Hoban, CEO of Bell General Office Credit Union, Chicago: "I would not have expected the prolonged softness in the economy, especially in the last three years with the interest rates down so much,'' Hoban said. "Of course, the key question is what will happen when they start ratcheting upward o one knows exactly what is going to happen."

The CEO of a $19-million CU in Chicago also offered this prediction: "I think there is going to be more and more consolidation of credit unions verybody I talk to regardless of their (CU) size complains about the same thing. They don't have enough resources." Hoban said the biggest challenge is finding ways to run a credit union smoothly and understand and comply with the complex regulatory issues such as the Patriot Act and the Secrecy Act. "It's difficult at the local level to keep on top of that. You need subject matter experts."

Insights From Ex-Banker

Javier Marin, CEO of Spanish-American Credit Union, Dover Townshiop, N.J.: "As a (former) banker, I didn't think much of credit unions,'' Marin said. "Because I didn't have a full understanding of what a credit union was, I never considered they could be so strong.''

Now the CEO of a $20-million CU in Dover Township, he knows better, Marin said, adding, "The bankers are going to continue to try to battle us, so there are still some issues to be addressed in terms of what bankers expect. A good thing (that will continue) is that credit unions have been able to come forward and be more public. There are a lot of people who have started to recognize the value of credit unions including the government...so I think we are going to see a lot of growth along with a lot of credit union mergers. We are going to capitalize because we have high exposure."

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