Too Much, Too Late: Planning Stymied by Unknown Regs
TALLAHASSEE, Fla.-Nothing is likely higher on CUs' strategic planning lists than financial reform. Unfortunately, upcoming planning sessions may arrive too soon to effectively address the matter, according to one person.
Jim Park, president and CEO of CU24, lamented that too little is known about what will result from the new financial reform bill. "We don't know enough about the outcome of the legislation to strategically plan to the degree that we need to. The government, frankly, does not know what they are doing yet. They passed this giant Christmas tree of a bill and now have to pare it down, put together committees, rules, and regulations. It is hard for credit unions to be proactive."
Banks, and some credit unions, Park noted, are taking steps, planning to charge for debit cards and checking. Park believes that many credit unions will consider eliminating debit rewards programs.
Whether financial reform passed or not, it's time to look even more closely at existing members, especially at card utilization penetration, which averages from 20% to 50% at CUs, according to Park. "This is a great opportunity to expand relationships. Whereas we used to kid about making up delinquency with additional loans, in this case you can make up revenue with additional transactions."
No member is better to target than Gen Y. "They perform a lot of transactions, and you are building your future membership base," said Park.