Earlier this year, many across our nation celebrated the 100th anniversary of the birth of Ronald Reagan, 40th president of the United States.
The speeches, TV specials and commemorative newspaper columns all touched on various characteristics of the president: his leadership style, confidence and principles, among others. One attribute that struck me was Reagan's absolute optimism about the future of our country, despite the many challenges he and the nation faced at the outset of his tenure in office.
He never wavered from that bright outlook.And neither do I, when it comes to credit unions. Certainly, there are challenges for us-replacing income lost due to new regulatory restrictions; dealing with a cautious regulator; fending off attacks from banks; paying for the corporate losses; building market share; protecting our tax exemption.
Nevertheless, I do believe credit unions can — and will — meet these challenges successfully, either by focused effort or merely by being what they are: Cooperative institutions that are the best options for consumers of financial services.
Here's what brings me to my sunny outlook:
• We are here to stay: We're serving nearly 93 million Americans with every kind of financial service that they want, with a track record of more than 100 years of service. We may well be the "best-kept secret in financial services," but people do know we exist, and they expect us to continue being around to help them and their families.
• We have a (big) voice: It's hard to ignore a crowd as big as nearly 93 million. Certainly not all of our members keep track of all of the challenges that we face-many of them have enough challenges in their own lives. But our research tells us that consumers, once they become credit union members, are much more likely to agree with us on credit union issues. It further tells us that, once they get involved with credit unions in a political way (e.g., make a PAC contribution), they are much more likely to take even more action-such as writing a letter to their Member of Congress or volunteering to help a credit union-friendly candidate. We have more work to do, we know, to corral the voices of our members-and that's something that CUNA and the Leagues, in partnership with their member credit unions, are working on now in order to give members a channel to speak up on their credit union's behalf.
• We deliver on the value proposition: The fact is, consumers save big at credit unions, which is pretty much what they expect to do. In fact, "returning earnings to members" is the most-admired attribute by consumers of credit unions, according to our surveys. Last year, for example, the average annual savings on a new car loan at a credit union was $276 compared to what a consumer would have paid to a bank or some other lender for the same loan (that's based on a $30,000 loan over five years). All together last year, credit unions delivered more than $6.5 billion to their members in direct financial benefits, just by doing business at the credit union. And, just because there are credit unions offering better deals, other financial providers have to adjust their pricing-resulting in even further savings for more consumers.
• We served, when others wouldn't: Credit unions continued to lend when other institutions cut back on their lending over the course of the "great recession." When members needed credit-particularly to help their small businesses-credit unions made it available. Overall, between December 2007 and September 2010, credit union lending expanded by 7.6%-while bank lending, over the same time, declined by 6.5%.
• We are careful lenders: Some might say, "Anybody can just throw money around, but good lending takes great care and caution." We agree-n credit unions are making good, solid loans. As of September 2010, annualized loan losses at credit unions were well below those of banks overall - and in the major categories of business loans (0.65% for CUs; 1.83% for banks), mortgage loans (0.64% vs. 1.92%) and, consumer loans (1.15% vs. 6.42%).
• We generate good press: Over and over again, we see stories by national, regional and local press-in print and on the air-urging readers and viewers to "go try a credit union" for no or lower fees on services, and better rates on loans and savings. More and more, the press "gets it" about credit unions, something all of us should make the most of.
• Voters support our tax exemption: Our latest research shows, clearly, that when voters hear the pros and cons of our tax exemption (particularly since it is based on our structure as not-for profit cooperatives), they side with our point of view by a wide margin-nearly three out of every four voters. The numbers are even stronger from our own members: More than four out of five support our tax status, based on our structure.
Taken as a whole, all of this-plus our deeply held conviction of being financial institutions dedicated to maximizing services to our members, rather than profits for a small group of shareholders-puts us in a position that no other financial provider can touch. That's worth reminding ourselves about every day, and continuing to take action on.
President Reagan had it right: Optimism beats pessimism any day. Optimism forces you to keep your head up, and your eyes fixed on the tasks ahead.
The most important of which, of course, is to serve our members as best as we possibly can.
Bill Cheney is president and CEO of CUNA.
