PayThink

Although your July 16 article "Will Only the Big Dogs Survive" was wide-ranging and timely, its unfortunate contextual omission may leave your readers with an incomplete picture of what I conveyed to Mr. Jim Jerving during my interview.

What will it take for small credit unions to survive?

Let's begin with some wisdom. At a recent credit union conference I heard one speaker refer not once, but twice to "strategic strategies." Those are not to be confused with "tactical tactics."

The article in the July 23 edition of the Credit Union Journal by Jim Blaine puts me to shame. In the article, Mr. Blaine recalls the persistence of Hubert Hoosman's solicitation for the Martin Luther King Jr. Memorial. Mr. Blaine calls on CEOs of credit unions to summon the courage to approach their boards for a donation to the MLK Memorial.

It's a fact. Credit unions are not just for personal accounts anymore. Today, savvy institutions are aggressively targeting the small business and micro-business market with a full range of products and the personal attention this underserved group has been lacking.

Credit unions have been breathing something of a sigh of relief over the bullet that has been dodged to date with subprime mortgages. Most credit unions didn't make the "Easy to Get Into, Bear To Get Out Of" home loans, so while rising rates and payment adjustments have led some companies to shutter operations and some homeowners to sell their shutters, most CU portfolios have not felt the pain-at least directly.

Credit Union Journal Publisher Frank Diekmann's column dated July 23 missed the point about the Coalition for Credit Union Charter Options' lawsuit against NCUA concerning the agency's over-reaching anti-conversion regulations. The point is that NCUA has exceeded its statutory authority by promulgating obstructionist regulations and will soon face the court's scrutiny. The legal complaint clearly outlines what is wrong with NCUA's actions and can be read in its entirety on www.ccuco.org.

Efficiency is a powerful concept for any business, and retail financial services is no exception. Efficient credit union branches are better at winning new members, keeping them happy, serving them quickly, and doing it at a lower cost than the competition. And with the growing adoption of teller cash recycling technologies, branches may have their best opportunity in years to make a dramatic impact on efficiency.

The strength and health of the credit union movement relies in large part on the preservation of the dual chartering system. In fact, the entire American financial services system rests on the foundation of dual chartering for depository institutions: both bank and credit union. That is why a banking case out of Michigan decided by the Supreme Court this past April is so troubling.

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