It is hard to believe that I have just celebrated my first year on the NCUA board. It has been an exciting and rewarding year filled with wonderful people and interesting challenges. I am grateful to CUNA, to the league presidents and their staffs, and to the dedicated credit union managers and volunteers who have patiently shared their wisdom and advice throughout the year. I have learned many valuable lessons. Most important was discovering the dedication and commitment in the credit union community, regardless of size or type credit union, to serve members with low-cost, high-quality products and services.
I have learned about league efforts to provide training for CU staffs, to develop financial literacy programs, to design CUSOs to offer more services at lower costs, and to assist small credit unions so they can be freed from back-office burdens, attend workshops and adopt technology commensurate with their members' needs.
I have come to appreciate credit unions as the premier financial educators in the nation. Their remarkable programs on a wide range of issues, in venues as varied as elementary schools and homeless shelters, propel immigrants, school children and just about everyone in their FOM on the road to financial freedom.
I have learned about the vital role credit unions play in providing alternatives to predatory lenders and the enormous difference they make in the lives of members who otherwise would be victimized by check-cashers and auto title companies. Working people of modest means who need $200 to repair a car or $300 to buy a new washing machine frequently find financial institutions off limits. Banks simply don't make such small loans. Credit unions that make these loans are not just filling an immediate need; they are starting lower-income members on the path to a healthier financial future. Such loans are good credit union business: they pay a higher rate of interest; bring in new members; and help put existing members on a firmer financial footing so they might borrow in the future.
I've learned that credit unions help their members build wealth. Wealth-building is important to young people as they begin their families and careers and to older citizens because it provides for a comfortable retirement and allows them to transfer wealth to the next generation. By offering mortgage loans to first-time homebuyers and to low- and moderate-income members, CUs create a better life for members and and better loans for the credit union.
Much More Is Also Done
I have learned that credit unions employ a wide array of marketing techniques to reach every corner of their fields of membership. They hire bi-lingual staffs, provide marketing materials in appropriate languages and work to assure their boards reflect the languages and cultures of their members. They open branches in extremely low-income neighborhoods and in supermarkets. They provide financial counseling to single mothers so they can buy their first homes. They reject easy assumptions and work to discover the needs of everyone in their fields of membership-then develop techniques to meet those needs and gain new members.
I have learned that credit unions develop innovative tools to attract new members and inspire loyalty in existing members. Some credit unions provide mobile branches to reach every corner of their fields of membership, others have vans to bring far-flung members to a credit union branch or participate in shared branches to assure convenient access for all members. They offer investment services to financially sophisticated members and credit counseling to those who are overextended. Some offer risk-based loans to down-on-their-luck "B" or "C" borrowers at rates that reflect their credit history. Those credit unions recognize risk-based loans can attract a loyal member for life, but that can't happen if the loan is denied and the borrower is driven into the jaws of a predatory lender. Others are making commercial loans that, with adequate reserves and planning, can provide a productive new revenue stream.
One striking lesson is that, through extensive member service activities, credit unions are not only helping others they are strengthening their bottom line. They've learned that expanding products and services is not just good for the members-it's very good business.
Perhaps most importantly, I have learned that dedication to the credit union philosophy of people helping people is found in credit unions that are urban and rural, small and large, occupational and community charters. The boards and officials, together with dedicated volunteers in all capacities, work tirelessly to understand members' needs and to meet those needs with appropriate services and products. They are ever alert to opportunities to increase the visibility and credibility of the credit union throughout its entire field of membership.
Invigorated with the lessons of my first year, I look forward to 2003 and beyond. The future of credit unions lies in their ability to continue to offer members the services they need and desire. And I know credit unions have a future-a strong and prosperous future -as they continue to satisfy the needs of their members while reaching out to recruit new members and develop new products. It's very exciting to be part of the movement at this time. I know credit unions will continue to set the standards for member service and satisfaction and rise to even greater levels of success, and I look forward to playing a role in achieving that goal.
Deborah Matz is a member of the NCUA board. Ms. Matz can be reached at 1775 Duke St., Alexandria, VA 22314- 3428.