The Good, The Bad, And The Up-To-You-To-Interpret
The last few weeks have seen good news (with a potential to become Revised News), bad news, and news that depends on your perspective-as news most often does.
First, a look at the good news. In this case, it came in the astonishing report from CUNA that its data indicate some 689,000 people joined credit unions during the first two months of 2012 (CU Journal, April 16). Bank Transfer Day has become something of a Bank Transfer Phenomenon if the numbers are to be believed, and it must be noted that CUNA has previously had to ratchet back numbers related to customers who have literally declared "I'm mad as hell and I'm not going to take it anymore." Or, at least they're going to take it down the street.
Even if that number is eventually revised, it's obviously extraordinary, but like picking all the right Powerball numbers, it comes with its own set of challenges, like how best to handle the winnings and not blow it.
The Bad News
The bad news comes from what, at this point, is broader analysis and anecdotal evidence that all that member growth is occurring primarily at large credit unions. You know the story, the rich are getting richer, creating an even wider divide between themselves and their small and medium-size credit brethren. In other words, in the event you're reading this by flashlight in your tent in the public square, it's all about the 1%.
I had breakfast a week or so ago with a group of people at the Kansas Credit Union Association's annual meeting and talk turned to this issue. "Why do you think that is?" asked one person present. The responses seemed to primarily settle on the issue of visibility; a bank customer can be mad as hell, but isn't going anywhere unless he or she knows where to go.
The larger CUs have more branches, higher visibility and typically (but by no means always) better marketing and advertising. Online services can neutralize the physical branch advantage, but only after the prospective member knows to join (there's no better example of that than Pennsylvania State Employees CU).
But for most, it's the familiar story: larger CUs have greater ability to attract more members, who in turn drive greater revenues and word of mouth, which affords the larger CU greater ability to attract more members, and you know the drill. For some smaller CUs the spiral can be in the other direction for the opposite reasons.
The News...That Depends
Meanwhile, the news that depends on your perspective is the latest delay in a vote in Congress on an increase in member business lending at credit unions. Just two weeks ago the popular sentiment was a vote might have taken place by the time you receive this. Now, it appears it could be several months, at best, and just in time for the highly partisan political election season.
If funding for the U.S. space program had taken as long as this MBL bill in Congress, we'd still be running tests on chimps. You'd think credit unions would have a bit more influence, because although I sometimes strongly suspect just the opposite, to the best of my knowledge, the chimps don't have a political action committee.
* Take off to the west out of the Atlanta airport using a south side runway and you'll see an old branch of the former Eastern Financial Credit Union. Were it any closer to the airport those inside would have to wear seat belts. The building is distinctive, shaped much like a Mayan pyramid. The lesson here, given what became of Eastern Financial: if you're branch brings to mind a failed empire, get a new architect.
Frank J. Diekmann can be reached at email@example.com.