Diamond Head from Waikiki at NAFCU 50th annual meeting - CUJ 062017.JPG

Inspiration and education

The third and final day of the National Association of Federally-Insured Credit Unions’ 50th Annual Meeting Friday in Honolulu featured talk of having fire in one’s eyes when talking about credit unions, regulatory relief, trends in the payments space and how to manage vendor contracts. There was a private concert by Beach Boys co-founder Brian Wilson, roasted pig, and the trade group even rolled out a 50th anniversary cake!

But the one of the biggest highlights of the day was the inspirational true life story of John Maclean, who rolled onto the stage in a wheelchair, but then walked off.
John Maclean wheelchair  at NAFCU 50th annual meeting - CUJ 062017.JPG

From tragedy...

John Maclean, an Australian triathlete, was like many little boys – he wanted to grow up to be a professional athlete, specifically rugby. In 1988 he was riding a bicycle training for a triathlon when he was struck by an eight-ton truck traveling at 65 mph. He was thrown off the road into a guardrail. He broke 25 bones and severely injured his spine. He woke up in a hospital and spent eight weeks in intensive care. “I was in a very dark place,” he recalled. “I needed to find a light; a purpose. Try to picture what you would do in those circumstances,” he said to the audience.

An early turning point came when Maclean was transferred from intensive care to the general ward of the hospital and placed in a room with three other people. All three had broken necks, and as such could not move their fingers or their arms. “You know when people are watching you, and I felt three sets of eyes on me as I transferred to a wheelchair and left the room. I wondered what they were thinking, and I realized they were wishing they were me.”

While in the hospital Maclean’s dad asked him a simple yet profound question, “How far can you go?” Maclean made up his mind to resume being an athlete, even if he could not walk. In 1994, just six years after the accident, he participated in his first triathlon as a disabled athlete. In 1998 he swam the English Channel. After the latter triumph he felt confident enough in himself to ask his girlfriend to marry him. She said yes, and they later had a son. “Life is good,” he said with a smile.
John Maclean standing  at NAFCU 50th annual meeting - CUJ 062017.JPG

...to triumph

Maclean continued to tackle new challenges, participating in more and more triathlons as a disabled athlete. Eventually he received an updated diagnosis that he was an incomplete paraplegic, meaning some signals could go from his brain to his legs, and some could return. He received new treatment that – after 26 years – allowed him to walk again.

Not satisfied with merely walking, Maclean continued to push himself. Because he was injured while training for a triathlon, he decided he needed to complete a tri as an able-bodied athlete to bring his life full circle. He worked with doctors and a friend who is an engineer to develop carbon-fiber braces for his legs and a bicycle that could accommodate his physical limitations. The final part of the triathlon, after a swim and a bike ride, was a 10-kilometer (6-mile) run. With the help of his braces and two walking poles, Maclean gutted out nearly the entire distance by himself. Close to the finish line, he fulfilled his wish by walking across holding the hands of his wife and son.

“It took me 3 hours and 31 minutes to cover those 6 miles. Every step hurt, because my feet had not been walked on for 26 years, but every step brought me closer to the dream,” he said.

With that, Maclean parked his wheelchair and rose to his feet to thunderous applause. He delivered the rest of his keynote address while standing up.

“I am asked all the time how do I train so many times,” he said. “It takes a lot of effort, but it is all about dialog. The negative voices of the subconscious live in the back of your head, and they are back there because they are in the past. The challenge is to stay in the right now.”

Dan Berger, NAFCU’s president and CEO, had opened the conference two days earlier by issuing an “extraordinary challenge” to get every single American to sign up for a credit union. After Maclean finished, Berger exclaimed, “If you aren’t inspired by that, you are in the wrong hall.”

“I said on Wednesday we should do extraordinary things,” Berger said. “So go back to your credit unions and be inspired to do something extraordinary."
Carrie Hunt  at NAFCU 50th annual meeting - CUJ 062017.JPG

Seven Notes -- live

Carrie Hunt, NAFCU’s EVP of government affairs and general counsel offers her frequently updated Seven Notes throughout the year. At the trade association’s 50th annual meeting, she gave a live version.

1) Earlier this year the Choice Act was introduced by House leadership as a reglatory relief measure. Hunt said progress has been “a little slower than NAFCU would like,” but Republicans and Democrats alike “appreciate” credit unions and understand they need reg relief. “The Choice Act passed the House and now the Senate is just beginning its regulatory relief efforts,” she said. “We expect the House and Senate will agree on a much narrower approach than the House took. The banks also are seeking relief. We have to fight for our industry. This is a marathon.’

2) The Consumer Financial Protection Bureau has slowed its pace of new rules in the months since November’s General Election, Hunt noted. “The term of CFPB Director Richard Cordray is going to be short. With fewer rules, the banks have turned back to blaming credit unions for their woes.”

3) Credit unions need to keep lawmakers in their corner. “Visit your lawmakers when they are back home in your district. There are 108 million credit union members, which is important to lawmakers.”

4) Data security standards are needed. “Merchants fighting against data security standards, and they have a lot of money,” she said.

5) Unregulated bad actors still need to be regulated. Payday lenders and “shoddy” fintech providers “cannot control the market,” Hunt insisted.

6) Credit unions are fewer in number, but stronger in what they provide to their members. According to Hunt, acting NCUA board chairman J. Mark McWatters and board member Rick Metsger “have led us down a path of modernization. We have to continue to push for modernization.”

7) We have to be strong, and to be strong we have to stand together and CUs – regardless of their charter – must have a common goal in mind. “Resources need to be put toward the same strategy,” Hunt declared.
Anthony Demangone  at NAFCU 50th annual meeting - CUJ 062017.JPG

'Do we have fire in our eyes?'

Anthony Demangone, NAFCU’s executive vice president and chief operating officer, wants credit unions to listen and listen well to the marketplace. “Pay attention to what you hear,” he advised. “Is your credit union the hunter or the hunted? I hope you are hunting. Always move forward.”

Demangone asked CU leaders to consider how they talk about what themselves and credit unions when people ask what exactly is it that they do? Or, what is a credit union exactly?

“Do we have fire in our eyes when we talk about credit unions? Do we believe credit unions are for everybody? I once heard someone say credit unions represent the best of America, that people come from far and wide to make sure their financial dreams come true. And that credit unions don’t fleece their people like Wells Fargo.’ I was inspired when I heard him talking”

The right attitude “can move mountains,” Demangone continued, urging all of those who work at credit unions to “Have the joy of life.”

“We are all in this thing together. The credit union industry is the best in America. Walk and talk like you own the joint, because you do. Make it a goal that every high school kid in the country, when they graduate the first ‘grown uppy’ thing they do is go join a credit union.”
From left, Arkansas FCU President and CEO Rodney Showmar moderated a payments panel at the 50th annual NAFCU Annual Meeting, featuring Ben Colvin, SVP of North America enterprise security solutions for Mastercard (center), and Neil Mumm, VP of corporate strategy for Visa.

Payments panel

Neil Mumm, VP of corporate strategy for Visa (right), and Ben Colvin, SVP North America enterprise security solutions for Mastercard (center), spoke as part of a payments panel moderated by Rodney Showmar, president and CEO of Arkansas FCU.

Mumm told the crowd that CU credit card issuers need to seek to be top of physical wallet, top of phone and top of file at a merchant. “Once a card is placed on file it is hard to move. Remind your members to put your card at top of wallet in all those settings. Find out what the member values: rewards, APR.”

Colvin said there are three areas for a card-on-file strategy: recurring payments, wallets, and on-demand services such as Uber, Lyft or food delivery services. “The key to these are education and giving members a reason to use your card. Every credit union and bank is competing to be top of wallet, so offer benefits and incentives such as insurance. Make sure you have a fair chance to compete.”

Mumm said Visa “certainly does not believe” the controls implemented by the Durbin amendment are “appropriate to drive innovation.” He said there are “unfortunate unintended consequences” from Durbin, and lamented the fact an attempt to repeal Durbin was removed from the Choice Act.

Added Colvin: “We are all aligned on this. The routing choices being put in the hands of merchants was a windfall for merchants, with no benefits passed to credit unions or consumers.”
Patrick Goodwin, president of Strategic Resource Management

Vendor strategies

Credit unions are missing out on ways to save money on vendor contracts.

That was the message from Patrick Goodwin, president of Strategic Resource Management, based in Memphis, Tenn., who led a breakout session Friday at NAFCU’s 50 Annual Meeting in Honolulu.

Strategic Resource Management says it has saved its clients $2.2 billion over the years. Goodwin counted down the seven most expensive vendor management mistakes, from seven down to one.

7) Failure to negotiate deconversion costs. “You have leverage when negotiating,” he told the audience. “You are not at their mercy for their standard rates.”

6) RFP mismanagement. Every vendor prices differently, so Goodwin cautioned it can be very difficult to do an apples-to-apples comparison during the request for proposal process. His advice: consider all factors.

5) Miscalculating the future growth of the institution. “We find this happens quite frequently,” Goodwin said, adding the miscalculations cut both ways – too high and too low on future growth.

4) Neglecting auto renew. Goodwin said 5-year contracts should be avoided in many cases, because companies “change tremendously” over the course of a half-decade. He said best practices include managing agreements while still in the contract phase, being aware of all pending auto-renew deadlines and renewing contracts for 12-month intervals.

3) Not bidding out every contract. “You never know where the market is, and how things are changing.”

2) Being too emotionally invested with your vendors. Yes, your vendors take you out to dinner, and they take you golfing, Goodwin acknowledged, but having a personal relationship that gets a little too close can cloud good judgment. “Don’t let a vendor charge a premium price because of that relationship,” he said, adding a workaround could be the person at your CU who is closest to the rep from the vendor not negotiate renewal of the contract.

1) Not considering other vendors. “We see this quite frequently,” Goodwin said. “People don’t want to consider alternatives. We tell them, ‘You don’t have to change, but just consider.’ By going through the bid process you see the latest and greatest solutions, even from your incumbent vendor.”

Goodwin encouraged CUs to get assistance with vendor management, either from Strategic Resource Management or from another company. He said SRM has a database of information, including RFPs, that dates back years. “Remember sometimes business is just business, even with vendors you have a great relationship with. Your most leverage is with new vendors, but you also have leverage when the contract is up for renewal. Look at the big picture. If the vendor thinks you are going to give them the opportunity the next time around, then the better negotiations will go.”
50th anniversary cake at NAFCU 50th annual meeting - CUJ 062017.JPG

Cut the cake

NAFCU created a cake to honor its 50th anniversary. It was presented by Dan Berger (left), the trade group’s president and CEO, and Richard Harris, president and CEO of Caltech Employees FCU and chair of the NAFCU board.
Brian Wilson at NAFCU 50th annual meeting - CUJ 062017.JPG

A living legend performs

Brian Wilson (seated at keyboards, left front) was the co-founder of the legendary band The Beach Boys back in the early 1960s. He closed NAFCU’s 50th Annual Meeting with a private concert just steps off Waikiki Beach. Wilson and his current bandmates performed a number of hits, including “Surfer Girl,” “I Get Around,” “Good Vibrations,” “Surfin’ USA” and many more. By then end of the show, the credit union folks were up and dancing and the sidewalks around the venue were jammed with people clearly thrilled to be getting a free concert from one of rock’s most iconic artists.