What CUs Should Start Preparing For Now
TALLAHASSEE, Fla.-Preparation will play a large role in credit unions' success the remainder of the year, according to Jim Park.
The president of CU24 expects the economy to turn around in the next 12 months as consumers get their debt load under better control, making credit a big opportunity. While credit unions need to begin preparing now to execute when the credit card market heats up, the bigger issues they need to be readying for today are the effects of the Durbin amendment and other matters stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act that could impact CU business.
The "800-pound gorilla" in the way of credit union progress, according to Park, is the proposed new interchange rules that have ground CUs to a halt, waiting for a final decision. "This has really hampered credit unions from doing a lot of things."
Ultimately, when a final decision is handed down by the Fed, some portion of credit union income will go away, according to Park who urged CUs to plan and develop strategies now to fill the void. "Credit unions can go after the youth market, they can begin promoting their credit cards...they don't have to wait for the Durbin outcome. Banks now are throwing their customers away and credit unions need to take advantage of that."
With all the attention on Durbin, Park is concerned credit unions are not paying attention to other implications of Dodd-Frank.
"Credit unions need to break down the rules in Dodd-Frank to see how they could be affected. They should have a team studying each rule and meeting regularly to make sure there are not any gotchas buried in this 200-page bill. There are a lot of things in there, while they do not get the attention Durbin does, that in some respects could be just as critical to credit unions."
For info: www.cu24.com