Transfer Day Over, (Loan) Transfer Days Ahead

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Funny how that "what goes around comes around" thing keeps coming around.

Credit unions in this country owe their roots to a group of small, mostly low-income workers in New Hampshire who found that what retail banks there were just after the turn of the 20th century had little need for them.

Fast forward 10 decades and a small business owner in California discovered pretty much the same thing. Fed up with retail banks in general and Bank of America's announced $5 monthly fee for debit cards in particular, Kristen Christian didn't meet with other church parishioners, as did the founders of St. Mary's Bank; she did the 21st century equivalent-she started a Facebook page.

CUNA has used that Little Man Under the Umbrella logo in some form or another since the 1930s, and often that image is viewed as some quaint notion of times long past by credit unions that are too big, too "sophisticated" for any such nostalgia. Yet Facebook and social media have led to a resurrection of the Little Man (and Woman). Makes you wonder why some credit unions are running from the very image that appeals to so many consumers.

A Single Voice
Lost in all the excitement and we-couldn't-have-bought-this-kind-of media coverage has been the fact that Bank Transfer Day-an effort credited with driving more than 650,000 folks to CUs and many others to community banks-all began with a simple Facebook post by one. (With apologies to those among you who keep these people in business, but it's kinda pathetic the Kardashians spend 10-million times what Christian spent and accomplish none of the same good.)

Bank Transfer Day did expose what appear at first blush to be other peculiarities, as well. Some credit unions, including BECU in Seattle, which added 659 members on Saturday alone, and Bethpage on Long Island, which signed up 672 of its own, saw the kinds of crowds that usually require free food. Others apparently couldn't give food away, saying they saw little increase in new member sign-ups over what they typically do. Much of that has to do with marketing, along with other factors out of your control, such as local media coverage and the presence of big banks' branches in the market.

Feels Good Now, But...
Credit unions getting their name on the national evening news felt good, but the challenge now is to create a feel-good story for Nov. 5, 2012. While America's attention will be on the presidential election, credit unions' need to be focused on ensuring all those voters who elected to move to CU Land prove to be good citizens a year from now.

The sign-ups may turn out to be the easy part. As any number of analysts have observed, tread carefully in what ye ask for-although only if your analysts speak olde English. The real winners over the next year won't necessarily be the credit unions that signed up the most members, it will be those that got the most out of their sign-ups.

It's time now to circle Dec. 5, Jan. 5 and Feb. 5 on your planner and in your DP system. Every member signed up in the lead-up to Bank Transfer Day and in the days that followed needs to be flagged, and there must be a proactive plan for 30, 60 and 90 days out for in-person and electronic follow up.

Ask for loans. Let them know they are welcome at the credit union. Ask for loans. Explain how a credit union works. Ask for loans. Explain how you can help the new member to achieve their goals and objectives. Ask for loans. Remind them there is a deeper difference than the sign on the door. And if you haven't done so already, pull those credit reports and don't forget to, well....

Many years ago, when I was a reporter covering banks, I sat through a session at a banking conference in the New York Hilton at which the speaker-a consultant-repeatedly referred to the "MSF." Not NSF, MSF. I had no idea what was being referred to and finally had to ask the person sitting next to me. MSF, it seems, stood for "Maximum Screw Factor," a colloquialism for a formula the speaker's company had developed that sought to answer how much you could stick it to the customer in fees and pricing before those pricing decisions became counter-productive. (If you ever believe there are no longer any differences between banks and CUs, sit through a banking industry conference some time; but take a sweater, it's cold).

Bank Says Good Riddance
In the months leading up to Bank of America's announcement of its proposed debit fee, certainly there was at least an office or two of highly paid execs in Charlotte who had done no end of research on projected customer response. While it's doubtful BofA referred to it so crudely, you can bet it had an MSF of its own, and determined that the negative PR and customer attrition would be more than offset by the hundreds of millions of dollars in revenue the debit fee would generate. Now it has egg on its Facebook.

In fact, you can be certain BofA has been happy to bid good riddance to as many low-balance, single-service households as possible. A good deal of those, to whom five bucks a month means something, have shown up at credit unions' doors.

That's why it's going to take some good, hard work to make sure that in this case what has gone around doesn't come around again.

Frank J. Diekmann can be reached at

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