Not surprisingly, Jim This has found a common theme among the credit unions and boards with which he often consults: what to do about the ongoing margin compression.
“They’ve been able to cover that for the last five years with courtesy pay,” said This during the Volunteer Leadership Institute conference hosted by his company, Paragon Consulting Group, in Wailea, Maui recently. “But legislative changes may make that less lucrative. They’re very focused right now on other sources of income. The question now has become what is the next courtesy pay?”
This, whose Olympia, Wash.-based company primarily does strategic planning, marketing planning and board governance consulting with credit unions, said he has seen increased interest from CUs in one other areas conversions. But not those kinds of conversions: rather, core system conversions, the much dreaded, just-once-in-my-career-please changeovers. This said more CUs have been asking for assistance with related RFPs and evaluations.
“I think the other thing that is occurring is that boards, especially as credit unions get larger and more sophisticated, are seeing that the level of education they need is really getting higher,” said This during a break between sessions at the Institute. “Many credit unions are insisting that they do the training and the development as things get more complicated.”
When it comes to planning a conference for board members and other volunteers, This said planning is based on a projection of what will be appearing in board packets over the next few years. “Board members realize the challenge of staying current,” he said.
This acknowledged the flip side of that is true, too–getting current board members, i.e., some new blood. He noted he recently participated in a roundtable discussion of how to recruit new board members. Some around the table reported they have very good programs for finding fresh volunteers; others said they could not find anyone.
“What we need to change is the board nomination committee needs to become the board development committee,” said This. “This committee can also manage the training so that all year long there is ongoing education and they are also on the lookout for new people. Some credit unions have an apprentice board or they appoint someone who is not elected to the board for a year or so so they can see if they are comfortable with the demands.”
This said his other big concern is the role played by the supervisory committee as balance sheets become so much more sophisticated and demanding. “I see the role of the volunteer supervisory committee going the way of the volunteer credit committee, with most of the heavy lifting being done on the professional side,” he said.
This, who told a conference audience that he had seen the morning’s stock market reports and “my 401(k) is now a 101(k),” and Paragon have hosted the Volunteer Leadership Institute in Hawaii for more than a decade. This year, however, they are going to pilot a second meeting targeted at volunteers in Hilton Head, S.C. in July. For details: www.theparagongroup.com.
* In separate remarks before the Volunteer Leadership Institute, Hawaii league CEO Dennis Tanimoto noted that the average visitor to the islands spends $1,600 per person. Tanimoto cited some plans within Congress as part of an economic stimulus package to give as much as $800 to each taxpayer and observed, “so the federal government is now even helping to subsidize half of your Hawaii spending.”
* If ever there is a good time to feel good about yourself it’s at any conference in Hawaii, especially one at a Marriott resort that sits surfside. Yet there was a fair amount of pessimism in a room of more than 250 CU volunteers when they were asked about how they would grade the “relevance” of credit unions and the overall job being done.
* As the story on page 10 notes in more detail, Mark Meyer, executive director of the Filene Research Institute, asked for a show of hands in grading the relevance of CUs in the financial services market. There were almost no hands raised for “A” and a few for “B.” Most said “C,” with other hands saying they give credit unions a “D” and a few hesitant hands half-raised for an “F.”
* The real issue here is that if you truly believe your credit union is doing that poor a job or has that bleak a future, what are you doing on the CU’s dime in Maui when apparently there are bigger issues at home? What’s really needed is a recognition that the competition is feeling the same pressures. Small and midsize banks would likely not give themselves any higher grades, and just look at the losses some of the largest banks are reporting right now.
* One last reminder to submit your favorite memories from the fight to get HR 1151 passed in 1997-98 for inclusion in a special issue to be published March 3. Just click on www.cujournal.com.
Frank J. Diekmann can be reached at fdiekmann
