Message In A Bottle? No. But It Does Make It Across The Sea
Consider the observation, below, for a moment:
“Many of the country’s middle classes would never dream of borrowing from a credit union, associating it with the sort of scrimping and saving their parents did. Most of the new middle class suburbs do not have credit unions.”
That message sounds as optimistic as a Hummer salesman right about now, and some readers may even object to the author’s thesis. But it’s nonetheless 39 little words that sum up what the consultants and self-help gurus like to label a “challenge.”
Here’s another reason the paragraph above is an interesting insight: while it’s quite applicable, at least in part, to credit unions in the U.S., it wasn’t written about America’s credit union community.
Rather, it was penned by Charlie Weston, the Personal Finance Editor for The Independent in Dublin, Ireland, who was writing recently about the job that’s in front of the new president of the Irish League of Credit Unions, Kieron Brennan (am guessing at future World Council events just wearing that name tag will mean not having to also identify who you rep).
Weston observed that Brennan is taking over at the same time “credit unions are at a crossroads” in his country. At first, the columnist seems to feel those crossroads are the intersection of Rocky Road and Not So Easy Street, claiming that as the country’s CUs turn 50, “some within the movement are less inclined to celebrate and instead are questioning if there will still be a vibrant credit union movement around in another 50 years’ time.”
He goes on to write, “Media stories about financial losses, loan delinquencies and dividend payments that are diving are just some of the events that are conspiring to undermine public confidence in credit unions.
“Indeed, some of the sharper minds within the credit union movement are questioning the very relevance of a mutually owned, ‘people’s bank’ type organization in a modern Ireland where there is easy access to credit.”
Sounds like the ideal guy to get for the 50th Anniversary Luncheon speaker slot!
Some of Weston’s pessimism is fueled by recent and, in certain cases, significant losses some Irish credit unions have experienced due to bad investments that have received significant press coverage on the Emerald Isle.
But in the broader sense he raises an issue often debated in this country, and that is “relevance.” It may well be that some Americans “never dream” of borrowing from a credit union, but those two words shouldn’t be seen as a pejorative. Rather, they “never dream” for a fundamental reason: they’ve “never heard” of the credit union and, if they have, what a credit union is has “never been explained” to them.
Weston later observes that “These days people make rational choices. These people who make cold-hearted calculations about where is the best place to access financial services do not see credit unions keeping up with the competition.” There is some truth there, too, for U.S. credit unions, but it’s mostly about perceptions; a credit union was the first financial to offer online account access, and today many are technology leaders.
I would disagree that all consumer decisions today are “rational” and “cold-hearted calculations.” If true, rate-leaders would dominate every market. Like beauty, “rational” is in the eye of the beholder, and there is buckets of evidence consumers will exchange basis points for the basic points of a warm-hearted relationship.
Still, Weston concludes with an observation that crosses the Atlantic without getting wet: “Credit unions have a good story to tell....The problem up to now has been the failure of the movement to get this message out.”
We can all raise a Guinness to that.
Frank Diekmann can be reached at fdiekmann