MADISON, Wis.-Concerned as well with shrinking margins and "glad the capital is there," CUNA Mutual Group Chief Economist Dave Colby said the current high average capital levels give "a little cushion to credit unions that want to take advantage of some of the customer dislocation or dissatisfaction with the mega-merger banks. Credit unions know their markets very well. If they see demand from consumers to switch institutions, they are now in a strong position to set the rules-come over to the credit union with your CD, but bring your car loan too."
Colby said focusing on members' needs will drive growth.
"The number one thing you can do today is inform your members of what you can do for them," Colby said. "I wouldn't recommend aggressively trying to grow your institution. Take care of the existing membership first, grow your relationships with them, and let them be the marketing arm and spread the word of the credit union's value."
Investing some of that capital in expanding CU services can have the same positive impact on the movement's national image, suggested Colby. "Look at the third quarter data--99.6% of all credit union assets are held in credit unions with capital ratios at or above 7%. I think we have room to invest some of that capital. I think we need to grow and help a lot of people as a political defensive move. When everyone turned their backs, credit unions were still their lending to the American consumer. Keep your hands off."
