MADISON, Wis.-Credit union leaders, more than half of whom in an online poll are projecting flat to moderate growth in 2010, have been provided with some ideas on improving those projections.
John Lass, SVP-strategy and business development for CUNA Mutual Group, pointed to what he considers are some big CU advantages today to more than 580 participants during CUNA Mutual's first Discovery Webinar. Lass explained why the credit union system is needed now more than ever, and restated the meeting's key points after online participants disclosed their growth projections for 2010.
A quick poll during the Q&A session at the end of the meeting showed that 51% of participants expect their CU's growth in 2010 to be between 0% to 5%, 34% expect growth to range between 5% to 10%, 8% estimate more than 10%, and 4% predict negative growth.
"More than half of you say your growth will be from 0% to 5%," Lass told participants. "So it's important that we all step back and consider what are the steps we can take to grow regarding share of market and share of wallet, and really understand our channels and products."
Lass pointed to ten key reasons why credit unions have a strategic advantage over banks today and are needed-to a greater extent than in recent years - by consumers:
* Local presence and local funding: "The CU source of 'loanable' funds is primarily deposits and is not as dependent on the capital markets, as is the case for banks and finance companies."
* Cooperative ownership structure: "This makes it very difficult for any group of outside individuals to exert undue influence on strategic decisions."
* Affordable products and services: "Consumers require affordably priced financial services now more than ever. Relative to banks, credit unions provide an average benefit of $198 per member household according to the CUNA Benefits of Membership Report from December 2008."
* Concentration: "The banking industry is already very concentrated and is becoming more so. The top five bank holding companies control 37% of all domestic deposits, while the top five credit unions control only 10% of all deposits."
* Capital: "Despite the economic crisis and corporate assessments, credit union capital is still well above the regulatory minimum standard, at 9.6%."
* Cooperative structure: "The credit union structure does not reward excessive investment risk taking."
* Customer Intimacy: "Credit unions are able to successfully pursue a customer intimacy strategy in a way that it is difficult for banks to emulate."
* Member/consumer trust: "Credit unions consistently achieve high consumer trust ratings in a variety of independent surveys."
* Credit unions did not cause the current crisis: "CU losses recently have been more a result of being caught in the backwash of the broader financial and real estate markets."
* Today's economy is just why credit unions were formed: "The current economic crisis is the same type of environment that brought about federal enabling legislation for credit unions in 1934."
