Grass Isn't Always Greener, Water Isn't Always On

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During NAFCU's annual meeting in San Francisco last week there was some discussion in one breakout session about how long NCUA could hold out before it's swept up into the FDIC.

Implicit in that scenario seems to be an assumption that the FDIC has its act together, while credit unions, caught up in headlines of natural-person and corporate CU failures, see their regulator as just not up to the job.

And yet some of the data being reported makes one wonder if it shouldn't be the other way around, with the FDIC brought in under NCUA (which looks almost good by comparison). SNL Financial in Charlottesville, Va., for instance, recently reported that its own analysis has shown the FDIC has increased its total projected cost of 2010 failures by $2.01 billion or 9.06% compared to the initial loss estimate it provided at the time of the closures.

The estimate increased to $24.18 billion as of Dec. 31, 2010, from initial estimates of $22.17 billion. Of the 157 initial loss estimates the FDIC announced for 2010 failures, 102 have increased, while 55 have decreased. The anticipated loss was increased by a median of $3.8 million, or 9.8%, of initial estimates, SNL Financial noted.

CU financials have been anything but pretty, but some of those bank numbers are downright warthog meets a wood chipper.

Was listening to a speaker the other day when he made a reference to "taking out a loan." Taking out. We've all heard those words used to describe the process of borrowing that we seldom give much thought that it's one of those little English language oddities to describe essentially purchasing something. To "take out," like we would with the family dog or Chinese food. Perhaps the words are used in relation to lending because there is an assumption it will also be "brought back."

The former CEO of CUNA simply refuses to fade away. At the Credit Union Association of New Mexico's annual meeting at the Buffalo Thunder Resort in Santa Fe, just down the hall from the meeting was the Mica Restaurant.

Actually overheard this conversation in a store recently:

Woman: (Sneezes)
Man: Are you allergic to something?
Woman: No, it's just my allergies acting up.

Think your credit union offers a pretty wide range of products and services, that you are a "full service" institution? Get ready to feel plain vanilla.

In Maimon, Domincan Republic, the credit union known as Cooperativa de Ahorros y Créditos Maimón, Inc., is marking its 20th year of existence.

In addition to four branch offices with a fifth on the way, the credit union has been described as a "pillar of the community." A lot of credit unions like to claim "pillar" status, but few do it like Cooperativa de Ahorros y Créditos Maimón. As the World Council recently reported, the credit union has also offered "vocational training programs to hundreds of young adults, has fortified the municipal water systems (it built a water tower), has provided two ambulances and is offering the only comprehensive funeral services in town."

Talk about cross sales opportunities.

Branch manager: Have you considered our credit card?
Member: We already have one with a bank, thank you.
Branch manager: Umm, do you like it when you turn a faucet and water comes out?

The $52-million CU has 43,000 members, which represents about 60% of the local population. If it adds a maternity ward it may become the first cradle-to-grave credit union in the world.

Usually when it comes to credit unions talking about technology it's with an undercurrent of fear that CUs will be left behind to stand around like Amish wagon-makers in a hybrid car world, even though the industry has actually long been a leader in deploying technology. And when it comes to social media it seems every CU CEO is worried yet unsure that marketplace competitors are tweeting their way to growth and fortune while the credit union is still trying to figure out a strategy.

So it was reassuring to see that Dwolla, the online, location-based, social, and mobile payment platform supported by The Members Group (TMG), a unit of the Iowa league, was recently named as one of the "Best in Show" technologies by attendees at the FinovateSpring 2011 event.

Each of the 64 companies selected to appear at FinovateSpring was given seven minutes to demo a product or service in front of financial executives, venture capitalists, press, industry analysts, bloggers and "fintech" entrepreneurs. When it came to be Dwolla's turn, in addition to showing off the platform's FiSync technology, which allows credit unions and community banks to integrate the payment platform and its technologies into their existing systems, it also unveiled its FiSync Dashboard.

The Dashborad can detect the type of mobile device used, and learn where and how Dwolla users are spending money with interactive maps and average transaction information. Credit unions may not see themselves as Big Brother, and the company stresses that personal identity information is not included in the FiSync Dashboard.

Frank J. Diekmann can be reached at

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