‘Myth’ might not be the right word. In the Oxford Dictionary there are two notions – the first is the idea of a traditional story that explains some natural or social phenomenon. The other centers on the idea of a widely held but false belief. ‘Doctrine’ might have been used instead. According to Oxford, doctrine is a set of beliefs that are held and taught by a church, political party or other group. It could be said that doctrines are contrived by authority…not really what we want to convey in the thought construct that follows. Myths, in contrast, often develop over time and from the bottom up. They eventually become stories and develop creeds that mold behavior. The kind of myths we will discuss are not technically false, many are just unprovable with contemporary knowledge. But myths evolve from human imagination and the most impactful myths drive cooperation and aligned behaviors. 

The myths that humans embrace to accomplish large-scale cooperation or aligned behaviors are many. The belief that one can exchange something of value for a fair number of dollars compels most of the world’s merchants to routinely engage in dollar-denominated trade. The idea that individual initiative and creativity will be rewarded in special, sometimes exceptional ways is regarded by many as the essential reason to participate in the workforce of free-market capitalism. And for 2.4 billion Christians, 1.9 billion Muslims, and many others, the opportunity to continue existence in a pleasant afterlife compels cooperation and aligned behaviors of perhaps the most significant scale in contemporary humanity. The list goes on… 

The important thing about myths is not whether they are constructed around truth or unsubstantiated fiction. Rather, it is about how many embrace the myths and to what degree the myths lead to cooperation and aligned behaviors in society. In the U.S. Declaration of Independence, the foundational myth is: 

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Intelligent people have been debating the meanings and implications of nearly every word in that short sentence for almost 250 years. Notwithstanding, those words have compelled Americans and many in other countries to embrace the laws and societal norms that followed. The myths of representative democracy, religious tolerance, benevolent federalism, free-market capitalism, racial/gender equality, and American exceptionalism are among those that were strengthened by (and since) that 1776 foundational myth.

All myths, the kind that led to wide-spread cooperation and aligned behaviors, did not always exist – and they are all subject to change in the years/decades ahead. Monotheist religions did not much exist before the first century AD. The present-day myth that science and technology will eventually identify solutions for the most perplexing problems (cancer, poverty, living on other planets, etc.) is a relative newcomer to human society, barely preceding the industrial revolution. The long-standing myths that men are superior to women and that Europeans are superior to southern hemisphere peoples are well along in the process of societal skepticism, disbelief and rejection. And the historically recent myth that the U.S. dollar will remain as the world’s primary medium of exchange is already facing serious doubts in global economic circles.

So, what does this have to do with co-ops? 

Some would contend that co-ops have a foundational myth akin to the language in the Declaration of Independence. The International Cooperative Alliance puts it this way: 

A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

In the beginning (say 200ish years ago), these words of proclamation did not exist in their present form. Rather, it was a few weavers in England and a few merchants in Germany that decided to operate outside (or alongside) the norms of the prevailing societal myths – religious spiritualism, agricultural feudalism and early-stage industrial capitalism. They had a theory that they could improve their circumstances by voluntarily working together in democratic structures and through equitable practice. Only after many years and many experiments can contemporary cooperators contend that there is any semblance of an American societal myth that compels large numbers of people to cooperate in fair/equitable (i.e.: non-extractive) economic initiative. 

Love it or hate it, there is no question that the myth of societal progress emanating from free-market capitalism is widely embraced in American culture today. Beginning in 1776 (the same year as the U.S. declaration) with the publishing of Adam Smith’s “Wealth of Nations”, the free-market capitalism myth evolved through theory (individual greed is good for all), doctrine (reinvest profits in more productive capacity), ethics (set of teachings about how people should behave), ultimately becoming pseudo religion (driving science and politics). Not our words – credit goes to Mr. Harari and his 2015 book “Sapiens”, highly recommended. 

The ideal is that capitalism raises the water for all boats, albeit for some more than others – for a few, more than almost all others combined. Left untethered, we now know that the singular pursuit of wealth maximization can lead to exploitation of peoples, extermination of species, corruption of government, and other societal dislocations. But there are tethers in most countries in the form of laws, regulation, supervision, wealth redistribution, publicly funded initiatives, and other forms of moral suasion. The ‘free market’ is not really that free. But capitalism remains the dominant American economic societal myth. 

There are other societal myths that moderate the excesses of the free-market capitalism myth. Among them, the myth of “unalienable rights”, one of those being the pursuit of happiness. If happiness consists of something more than individual wealth maximization and collective GDP growth, free-market capitalism may not be the best or only construct for organizing economic activity. If happiness includes genuinely inclusive opportunity for pursuing life, liberty and property, there could be reason for limiting (but not eliminating) influence of the free-market capitalism’s largest beneficiaries in church, community and state. 

And… 

There could evolve a much stronger, widely embraced societal myth that people can assemble themselves in democratically controlled enterprise to improve their well-being in ways that assure:

• equality of humanity (voluntary association and democratic governance),
• appreciation for individual achievement (self-help and self-responsibility),
• protection against external influence (capital and government),
• return of profits in proportion to usage (patronage).

Oh…wouldn’t that be the cooperative form of business organization? 

Cooperatives and related shared-prosperity organizations have two centuries of grass roots evolution under their belts. They now have more than one billion patrons and hundreds of millions of disciples (elected and employed). In nine centuries, monotheist (i.e. one God) religions went from small/local congregations to the leading form of spiritual belief systems – worldwide. Cooperatives have been moving from small/local ‘congregations’ to worldwide recognition in a similar way. With the accelerated communications and technologies of the modern day, maybe cooperatives could complete the journey to significant and impactful societal myth in just three centuries. 

Sounds like a big, hairy, audacious goal for 2100! 

Welcome to 2025 – the year that the United Nations has designated as the International Year of Cooperatives.

The Filene Research Institute recently presented its first research report of 2024, focused on America’s housing journey. This comprehensive story map delves into the critical challenges faced by communities and explores how credit unions can play a pivotal role in addressing the housing crisis.

According to the report, the housing landscape in America has undergone significant transformations over the past two decades, presenting challenges to the traditional basics of homeownership. The median incomes in the U.S. have tripled since the mid-1980s, but housing prices have skyrocketed fivefold, creating a concerning gap in affordability. Housing rental prices have also surged, with nearly half of Americans spending more than 30% of their income on rent.

North Carolina and South Carolina face their own set of challenges. The annual income needed to afford a 1BR rental in North Carolina is $32,439, while South Carolina requires $32,239. These figures underscore the pressing need for affordable housing solutions in the region.

Credit unions have demonstrated their commitment to addressing housing concerns. The report emphasizes the importance of understanding local challenges and partnering with organizations at the forefront of housing solutions. It also suggests various funding avenues for credit unions, including federal loans for low-income housing development, investments in affordable housing through foundation arms, and the creation of products focused on addressing affordable housing.

By exploring the interactive story map and leveraging the insights within, credit unions can chart their course in addressing housing concerns and contribute to building resilient communities. For further details, contact Staci Duros, research manager at Filene Research Institute.

Are small credit unions underdogs or undervalued? For Christie Smith, interim president and CEO of Acclaim Federal Credit Union, the reality is not “either/or” but nuanced. In an earnest article for CU Insight, Smith explains why small credit unions are the heart of the movement, shares her concerns for the future and the importance of ally support and recognition, and how the resilient spirit of small credit unions perseveres and inspires.

“With 22 years dedicated to the credit union movement, I’ve pondered if we adequately convey our history and essence. Our movement began with small cooperative groups driven by a desire to ensure affordable financial products and services for all… and this spirit lives on.” – Christie Smith for CUInsight.com

Based in Greensboro, North Carolina, Acclaim is a small credit union with a rich history in the state’s third-largest city, which was put on the map for being the nation’s denim capital. It was denim manufacturing employees who started Acclaim FCU in 1972, seeking a financial institution where they could safely invest, save, and borrow money at competitive rates. Working for the former VF Corporation, now Kontoor Brands, employees “recognized that each person and family had a story and different needs and they wanted a financial institution that recognized that too.” This group is largely who the credit union serves to this day.

“…small credit unions have a unique bond with members. We know them by name, understand their financial aspirations, and help turn those aspirations into realities. This personalized interaction sets us apart.” – Christie Smith for CUInsight.com

There are many challenges small credit unions face, but as Smith explains, what comes from those conditions is a creative strength to endure – a drive to find the solutions that serve their members best and to seek out support from organizations that share a commitment to their ongoing success. In the article, she expresses gratitude for the Carolinas Credit Union League, Carolinas Credit Union Foundation, and National Credit Union Administration (NCUA), touting them as “invaluable allies who recognize the potential of the underdog.”

“I cannot emphasize enough how valuable the Carolinas Credit Union League has been to us,” Smith adds. “Their leadership was instrumental in ensuring that not only our credit union, but all credit unions had the necessary supplies during the pandemic. Moreover, their assistance goes beyond that, encompassing support from the League staff, spanning compliance, training, and facilitating affordable training opportunities. I can confidently say that our League is truly exceptional in its dedication to supporting small credit unions.”

Acclaim is among the 2023 grant recipients of the NCUA’s Community Development Revolving Loan Fund (CDRLF), which positions the credit union to upgrade its servers and maintain the ongoing safety and security of members’ financial data. The credit union is also a three-time consecutive state-level CUNA Awards winner, placing first place in the $50 - $250 million asset category for the 2023 Dora Maxwell Social Responsibility Community Service Award.

“We approach community service with enthusiasm, bringing our team closer together and supporting initiatives in the areas we serve. We plan our community service projects with the same enthusiasm that we do loan growth, demonstrating the undervalued potential that is often overlooked.” – Christie Smith for CUInsight.com

On its first entry into the awards program for its Mental Health Awareness Campaign, Acclaim achieved second place nationally. This year, the credit union is focused on the issue of food insecurity, partnering with One-Step Further to contribute 100 hours of volunteer service. “Whether it's working in the warehouse, packing food orders, or making food deliveries, I'm thrilled to share that we are on track to exceed our ambitious goal,” notes Smith.

“We’re committed to our community, and that sets us apart. We are a movement dedicated to a brighter future for all, despite our smaller budgets.” – Christie Smith for CUInsight.com

Smith reflects in the article about the future of the financial landscape for small credit unions. While she sees frequent mergers taking place, she doesn’t believe small credit unions will cease to exist, largely because they are essential and have an “underdog spirit that never backs down.”

“Never give up” is the advice she offers fellow small credit union leaders. “Your actions truly make a difference…filling the void within your communities or among specific employee groups, empowering your members, and driving positive change in their lives. As I highlight in the article, this work often demands a sacrifice, typically in terms of our time. Nevertheless, it is a sacrifice that is undeniably worthwhile as our communities depend on us.”

Sources

CU Insight: Underdog or undervalued: Small credit unions’ perspective on resilience and recognition

Greensboro History Museum: Voices of a City: Denim Capital

Acclaim FCU: Who We Are

NCUA grants boost community, operational growth plans for six Carolina credit unions

Carolinas Foundation announces 2023 state-level CUNA Awards winners

Titled "Do Your Hybrid Work Norms Help Or Hinder Your Retention Efforts?," the article by Lin Grensing-Pophal explains that while major companies like Amazon, Apple, and Citigroup are requiring employees to return to the physical office, credit unions “aren’t taking such a heavy-handed approach.”

Instead, credit unions like Skyla are walking down the tricky path of identifying the best hybrid work environment for employees with the end goal of building an “amazing culture.”

One of the challenges toward that goal is the factor of fairness as Thompson explains.

At Skyla CU, she says, the majority of non-member-facing employees have the option to work a hybrid schedule. “The member-facing staff see this as a definite advantage, which attributes to some of the turnover in our branches,” she says. “Employees want the flexibility and so it has become increasingly difficult to retain front line staff.  They apply for back-office positions—not for career development—but for the option of working from home.”

To address the issue at Skyla CU, “we have implemented lucrative incentive plans for branch staff to boost retention and it has definitely helped,” Thompson says. “The back-office positions don’t offer the same monetary incentive opportunities.”

Thompson goes on to share the Charlotte-based credit union is making additional adjustments that in the long run will “promote employee engagement and an inclusive, reenergized environment” under a hybrid schedule. She also emphasizes the importance of maintaining consistency in hybrid schedules across the organization and providing clear guidelines in written policy to avoid confusion and disruptive transitions.

Read the full article at cumanagement.com.

With the sharpest increase in interest rates, starting early 2022, and the implementation of the Current Expected Credit Loss (CECL) model this year, it comes as no surprise that examiners from the National Credit Union Administration (NCUA) are closely reviewing Call Report data to monitor credit unions’ risk and financial position.

The latest cycle for Call Reports ended March 31, 2023 and marks the first time the new accounting standard, CECL, was required in regulatory reporting.

The NCUA’s risk-focused supervision program continues to place heavy reliance on the accuracy of Call Report data. While Call Report filing can be time-sensitive, tedious and complex, any report inaccuracies can result in misleading financial results, delayed risk recognition and weak conclusions.

PLR CU Accounting Services works often on NCUA 5300 Call Reports and finds most credit union errors fall within these categories and examples.

• Simple errors – Missing data or inputting data in the wrong section/category
• Number errors – Reporting incorrect charge off and delinquency amounts
• Profile errors – Not updating exam and audit dates, changes in management and board of directors, and other profile information in a timely manner
• New data errors – Reporting errors on CECL one-time adjustments

Mistakes can happen, but there are ways to avoid these pitfalls and the examiner headaches that follow. Consider these tips.

• Train staff for the skills and abilities to prepare and report financial and profile information, and ensure adequate staff coverage to prepare reports and for succession purposes. Some on-demand training we recommend via our webinar partner: Call Report Update & Avoiding Costly Mistakes and Call Reports: Financial Accounting & Reporting.
• Perform due diligence on any vendor involved in the preparation of your Call Report or Profile. You want to ensure any third-party vendors that assist in these areas have appropriate processes in place.
• Separate duties of individuals responsible for preparing the Call Report and Profile from the individuals who review and validate them in order to ensure proper dual control per NCUA guidelines.
• Review Call Report instructions and any quarterly changes to the Call Report requirements. This information is routinely available on the NCUA's CUOnline webpage.
• Set aside time to reconcile the Call Report to the credit union general ledger, review the Call Report and Profile data, detect and address errors, and provide sufficient explanation and comments in response to all warnings including historical warnings prior to submission deadlines.

Call Reports offer a quarterly snapshot of your credit union, helping you get a full picture of the organization’s financial status and well-being and guide future operational decisions. Taking the time to get them right is to your benefit, and these are important steps toward submitting an accurate report.

To learn more or ask questions about Call Report filing, connect with VP, CU Accounting and Consulting Services Rose Hudson.

This article appeared originally on CreditUnions.com and is the intellectual property of CALLAHAN & ASSOCIATES. No part may be reproduced, transmitted, distributed, published, or otherwise communicated without the express written permission of CALLAHAN & ASSOCIATES.

An unlikely role is gaining popularity at some credit unions: videographer.

The rise of on-staff video specialists speaks to consumers’ evolving preferences for how they receive content. A recent study from Wyzowl indicated consumers far prefer video to text-based articles, infographics, and other channels. So, it’s not surprising credit unions are looking to create compelling video content for members, employees, and the community at large.

Kelly Krygiel, VP of Marketing & Community Partnerships, American 1 Credit Union

“COVID was a big push for us to bring on a videographer,” says Kelly Krygiel, vice president of marketing and community partnerships at American 1 Credit Union ($588.8M, Jackson, MI). “Video became a critical mode of communication, especially internally when we were all separated.”

The credit union hired a full-time multimedia specialist in 2021 with the intention of focusing on videography, but their skills in audio recording, graphic design, and photography were an added bonus, and the employee is now an integral part of the marketing team.

“Before we start new projects in marketing or community relations, we determine all the resources we need,” the VP says. “Our videographer is a key contributor in these concepting and message-development planning sessions.”

The credit union compensates the videographer position on par with their marketing teammates, recognizing these roles require specialized skills as well as education, empathy, and an innate curiosity to learn and grow.

Although videography is relatively new to American 1, Local Government Federal Credit Union ($3.7B, Raleigh, NC), began testing the waters as early as 2012.

Tim Newbrough, SVP of Marketing Solutions, LGFCU

“We wanted to create simple, how-to videos about new services we were rolling out at the time, such as bill pay,” says Tim Newbrough, senior vice president of marketing solutions.

Rather than seeking outside expertise, LGFCU pursued a homegrown approach, which revealed many team members had already experimented with video.

“Rather than hire a new videographer, we felt it was better to ask these folks to wear a new hat,” Newbrough says. “We changed the role of one of our graphic designers to that of a videographer.”

Over time, LGFCU realized the need for additional videography resources and added a second one to the team.

When hiring a videographer, Newbrough says LGFCU looks for candidates who use video as a way to tell a story. A marketing background is a nice-to-have, but it is not as essential as the videography and story-telling skill set.

“We’re more interested in candidates who have the keen eye of a director and can spot the clutter or other objects that don’t belong in a shot,” the SVP says. “The ideal person would be someone who is passionate about their craft with a perfectionist’s attention to detail.”

Use Cases

There is no shortage of ways credit unions can leverage videography. Video can be used for “how to” videos for products, ads for local TV and radio, internal messaging, and member testimonials, just to name a few use cases. Videographers also can cover and create highlight reels for annual meetings, town halls, and other events.

LGFCU uses videographers to cover its periodic document-shredding events in which community members go to a designated location and securely shred their sensitive documents. The credit union also produces animated holiday cards and member testimonials, and it records its annual meetings. Additionally, the information security and marketing departments collaborate on videos about detecting, avoiding, and protecting against scams. According to Newbrough, approximately 70% of the credit union’s video content is for members and 30% is for LGFCU staff.

What’s Next?

Krygiel says American 1’s next hire for a videographer will be a multimedia specialist with some experience working within a marketing team and the dynamics of that collaborative environment.

To step up its video game, Krygiel says American 1 needs a dedicated on-premise recording studio to transition from the makeshift conference room it currently has to set up and take down after every video shoot.

Newbrough also recognizes the importance of dedicated video space. He made sure LGFCU’s new building included in-house studio space where the team could record videos in an acoustically friendly environment. The space also is equipped with green screens and other equipment, including lighting gear for on-camera interviews with members and staff.

These are important investments for a medium growing in popularity — one that offers an avenue to promote products and services in a whole new light.

“Sometimes, brochures just don’t cut it,” Krygiel says.

Read the full article at creditunions.com »

This article appeared originally on CreditUnions.com and is the intellectual property of CALLAHAN & ASSOCIATES. No part may be reproduced, transmitted, distributed, published, or otherwise communicated without the express written permission of CALLAHAN & ASSOCIATES.

James McBride had a lot to bring to the table as the new president and CEO of Lion’s Share Federal Credit Union ($69.6M, Salisbury, NC), but he also quickly found out he had a lot to learn.

James McBride President & CEO Lion's Share FCU

McBride had been executive vice president of The Tennessee Credit Union ($417.1M, Nashville, TN) for five years when he was hired in mid-2021 by Lion’s Share, a 12,000-member cooperative that serves employees of Food Lion and other grocery chains up and down the Eastern Seaboard.

That stint at Tennessee was his second there. He started as a part-time teller while attending Lipscomb University in Music City and spent nine years there before departing for four years at Arkansas Federal Credit Union ($2.1B, Little Rock, AR). He was recruited back to Nashville as a human resources specialist at The Tennessee and then became vice president of operations and finally executive vice president before moving to North Carolina with his wife and what he calls “a collection of animals.”

Now he’s herding cats of a different stripe in his first role in the top job of a member-owned financial cooperative. Here, he shares tips and lessons he’s learned.

On taking the pulse of the place …

Don’t feel like you need to go in at a hundred miles an hour and start changing things. I was totally new to the area, and I was replacing a CEO who had been there for a decade. I took the time to find out what’s working and what’s not working.

You need to establish open communication with your staff to find out the lay of the land and where the pressure points are. I found out quickly that benefits are not very good, so we’re now working on that.

Another thing I did is start Tuesday Talks, where we open up the boardroom from 8:30-10 a.m. and 3:00-5:00 p.m. I work in there, and anyone can come in and talk about anything that’s important to them.

You name it; we’ve probably talked about it. Normally, the conversation is around issues like the call center, how to get more out of our team, sales training, partner relationships, and strategic things like the need for a skip-a-pay product. We now have that.

On making your mission their mission …

Our marching orders are to take care of our members, who work in grocery stores in a dozen different states and don’t make that much money. That’s why our board has never pursued a merger with any fervor. They’re not interested in expanding our FOM or in growth for growth’s sake. We just need to find more ways to say “yes” while managing risk responsibly. That’s how we’re ensuring the integrity of our service to the people we serve.

For us to succeed, our board, our members, and our staff need to be engaged, and someone in charge has to be working on their behalf. That’s my job.

I soon realized this disconnect had grown from our mission, vision, and values. So, together, we’ve created a new values/mission/vision statements while we work to build a collaborative environment. You build credibility when you listen and then act. It shows everyone their concerns matter.

On coaching the home team …

When I arrived, I found an underdeveloped leadership team. This was a group of four people who did their jobs well and had an extraordinary love for the organization but were not used to making a lot of decisions on their own. I’m not speaking ill of anyone — that’s just the way things had been done.

To get us where we want to go, I needed to empower this group, to give them each the kind of autonomy to follow through on good suggestions and ideas that I want in my own position.

We use team-building software called TeamOnUp, from a company created by former PSCU CEO Mike Kelly, that has helped each of us grow into the roles we hold and meet or exceed the expectations that exist for each of us. The results have been good. Our loan portfolio has gone through the roof, our investment portfolio has grown in complexity, and we have some new marketing partners helping us do new things.

I’ve also banned the word “fail.” We don’t fail here. We sometimes find ways that don’t work, but there is no failure. This leadership team had been afraid of that. Now we’re not.

On getting on board with the board …

Even as the EVP at Tennessee Credit Union, I didn’t engage with the board members very much. They only met with our CEO, so this was a whole new experience for me.

This board wanted something different from what it had. My predecessor’s strategy was to keep the credit union in the middle, so to speak, to not take a lot of risk or make a lot of changes. When I got here, I realized in our first few meetings the board members wanted to be in growth mode.

That’s a difficult transition, so we began educating them on how a credit union works when it wants to grow. I’ve talked a lot about being vulnerable and transparent and communicating to one other what’s important.

That’s a strategy that’s always worked for me, and it has again. We’re honest with one another about what works, what doesn’t, and where we want to go. That’s helped me develop a strong relationship with our board members. I’ve built a lot of trust with them in my first year.

On being the ONE at the top …

The biggest surprise to me as a new CEO is just how lonely it can be. My whole career has revolved around being with and engaging people. It still is, but now I can’t delegate so many of the things that come across my desk or into my email.

The buck stops with me. It doesn’t mean I can’t collaborate. I can and do, but I have to recognize that emotions can get in the way, too. My biggest mistake here was waiting too long to shift some responsibilities around because I was more concerned about feelings than I was about results. I corrected that, but it wasn’t easy.

I’m an emotional person. You might see me cry if you’re around me for any length of time. But your employees are not your peers, and that can be a lonely feeling.

But I’ve also learned that there is a lot of credit union CEO collaboration. This industry is willing to network, to share contacts, and to help one another get from point A to point B. LinkedIn has been a great source for me, too.

This article, 3 Ways To Measure For Better Marketing, appeared originally on CreditUnions.com and is the intellectual property of CALLAHAN & ASSOCIATES. No part may be reproduced, transmitted, distributed, published, or otherwise communicated without the express written permission of CALLAHAN & ASSOCIATES.

With looming economic uncertainty, ongoing talent shortages, and increasingly expensive options for media buys, marketers are facing fresh challenges in 2023. Traditionally viewed as expense centers by CFOs and others, marketing teams must prove their value internally and set their department up as a strategic partner for the rest of the organization.

Here, a trio of industry professionals answer one simple question: What is one thing marketing teams should be reporting on?

Recipient-Based Reporting

Jill Sammons is senior vice president of marketing, well-being, and wealth advisors at BCU ($5.7B, Vernon Hills, IL).

Jill Sammons, SVP of Marketing, Well-Being, and Wealth Advisors, BCU

“Too often marketing is considered a support function and not credited with the value it deserves. To be recognized, we must share worthwhile information. Marketers tend to get excited about how many opens, clicks, and views they get. Although top-of-the-funnel engagement data is vital, it’s not revenue-generating. Marketers are better off using vanity metrics to help them test, learn, and iterate.

“Marketing should be sharing slightly different messages with various teams across the organization. Senior leaders want to understand marketing’s influence on conversion rates, attribution, and ROI. How are you increasing your credit union’s share of member wallet? Product and sales teams should understand the quality of leads your marketing generates. Do they have prospects to contact because members took the action you asked them to take in your marketing?

“Every person in the organization needs to see themselves in your brand and purpose. Whatever role they have, they can influence someone to act. If you have 500 employees in your credit union, you essentially have a marketing department of 500. Tell your credit union story as often as you can internally. Make believers out of everyone you work with so they can’t help but talk about the value of doing business with you.

“Lastly, share every promotion you have coming up and in-market so they are easily accessible to the front line. Informed employees inform members. In BCU’s case, we use Salesforce Marketing Cloud for marketing distribution. Because we also use Salesforce Sales and Service, every representative can see all the promotions we sent within the member account view.”

A Method to Measure ROI

Bethani Williams is vice president of marketing at Spero Financial Federal Credit Union ($630.9M, Greenville, SC).

Bethani Williams, VP of Marketing, Spero Financial

“The ideal metric would be reporting ROI directly tied to marketing initiatives. Depending on the marketing channel, paired with consumer buying behavior (i.e., being served multiple touchpoints before converting), this is a lot easier said than done.

“At Spero, one way we measure true ROI is in our pre-screen offers. The process is a direct partnership with our lending department. Using the pre-screen list, we send a series of communications to promote the offer. Cross-referencing the list at the end of the campaign, we can determine true conversion rate, revenue per conversion, and cost per conversion — and, ultimately, the ROI in interest revenue.

“We benchmark year-after-year to determine the success of the promotion and optimize for future promotions. We also use past conversion rates to back into the pre-screen list size to hit our lending team’s production goal. This year, we are taking it a step further to determine the most impactful marketing channel with A/B testing. Depending on the channel, we can decrease the cost per conversion significantly, which directly increases ROI.”

Member Satisfaction

Alissa Sykes Tulloch is the executive vice president and chief operating officer at AmeriCU ($2.7B, Rome, NY).

Alissa Sykes Tulloch, EVP & COO, AmeriCU

“The Net Promoter Score provides insights into our members’ overall experience with the credit union — areas where we exceed expectations and areas where we need to make improvements. I call these the ‘silent killers.’

“For example, this past year our call center NPS score started to decline. From the trending data and comments provided, we identified that we had an issue and reacted quickly with a resolution. If we didn’t have that insight, we would not have been able to react so quickly to rectify the issue and move things back in the right direction.

“A close second would be sharing consumer trends — such as propensity to consume, product usage, demographics, etc. — for members and the marketplace. This also provides us with crucial information to make strategic decisions.”

Read the full article at creditunions.com.

Averaging $2.6B in assets, participating credit unions serve 11 states, partnering with 12 community service organizations to co-create products for BIPOC families

Madison, WI – Filene Research Institute in partnership with Native Women Lead and Urban Strategies, Inc. announced the first cohort of credit unions accepted into its Racial Economic Equity Incubator (REE Incubator). The REE Incubator works to advance racial economic equity through the credit union system by co-creating solutions that meet local community members’ needs and delivers resources, support, and capital to communities of color. 

View the News Release

Over the past few years several of the country’s biggest banks have pledged more than $45.2 billion to racial justice. Yet, many of these efforts represent a small portion of the Black, Indigenous, and other families of color across the country, and are targeted toward one solution such as homeownership. The REE Incubator distinguishes itself from other financial services interventions through its model of co-creation – working with not for communities of color to ensure products and policies are non-extractive.  

This year’s participating credit unions and their areas of focus are: 

• Allegiance Credit Union (Oklahoma City, OK) will partner with Scissortail Community Development Corporation to expand branch presence and create relevant products and services to better serve the local Latino community, including the Hispanic-owned small business community. 
• FAMU Federal Credit Union (Tallahassee, FL) will partner with Capital City Chamber of Commerce, focusing on increasing access to capital for minority- and women-owned businesses, in particular Black entrepreneurs. 
• Hiway Credit Union (St. Paul, MN) will collaborate with Right Track, St. Paul’s Office of Financial Empowerment, and Youthprise to center indigenous, low-income, and racially diverse youth, developing products that go beyond financial well-being training to focus on wealth and asset-building strategies, including homeownership.
• Kaua’i Federal Credit Union (Kaua’i, HI) will partner with Hawaiian Community Assets along with local business development and leadership programs to build economic resiliency for Native Hawaiians and Pacific Islanders and low-income families. They will utilize “place-based” approaches to support housing, small business/ entrepreneurship, and financial wellness and equity.
• Marine Credit Union (La Crosse, WI) will work with its Foundation to improve homeownership rates and build generational wealth for credit-challenged populations.  Finding HOME is a free financial literacy and behavior change program designed to help families that do not qualify for a mortgage achieve homeownership.
• Michigan State University Federal Credit Union (East Lansing, MI) will partner with GreenPath and programs focused on Black empowerment to address the racial wealth gap through addressing high-cost debt while building pathways to homeownership.
• Municipal Credit Union (New York, NY) will partner with The Bronx Community Foundation to create innovative programs to eradicate inequity and build sustainable futures for all Bronxites.
• Veridian Credit Union (Waterloo, IA) will work with Iowa Heartland Habitat for Humanity, 24/7 BLAC, and House of Hope to weave the organizations’ work into a comprehensive program which will improve access to affordable banking and consumer lending and build generational wealth for Black, Indigenous, Latino, and other families of color.

Expanding on Filene’s 15+ year successful track record of testing and scaling solutions, the REE Incubator will identify opportunities to test, refine and evaluate strategies to close the racial wealth gap, and develop a process map centering an equity lens. The REE Incubator provides participants with access to national experts in financial inclusion, a network of like-minded innovators to share experiences and results, and a committed team of coaches and partners to help navigate the systemic and local inequalities that credit unions face.

“Credit unions – members of whom represent 18-22% of US households – can play an important role in the push for racial equity by providing equitable, accessible, and inclusive financial products to U.S. families,” said Josh Sledge, Senior Director of Incubation at Filene Research Institute. “Designing with – not for – communities of color is critical for ensuring products and policies are non-extractive. REE Incubator partnerships and the insights that come from their work will create a roadmap for others seeking to create lasting, structural change from the ground up.”

“The Racial Economic Equity Incubator is a timely, powerful disruption to financial systems which will center co-creation that provides resources and support with community,” said Donovan Duncan, Executive Vice President for Urban Strategies, Inc. “USI is committed to closing the racial wealth gap and this partnership will begin to mend the long-standing relationship between communities of color and financial institutions.”

“Our vision is to increase access to capital through a multitude of pathways, co-creating products and services that center people who have been left out,” said Jaime Gloshay, Co-CEO of Native Women Lead. “This approach is crucial to ensuring there’s community trust, support, and activation. If we’re truly making bold steps toward racial equity, we do this by building the table with the community.”

Insights from the credit unions and their on-the-ground partners will be published throughout the year for the benefit of financial services organizations across the country. Stay up to date with the partnerships and insights that come from the innovation and pilot phase of the REE Incubator program at filene.org.

About Filene: Filene Research Institute strengthens organizations through innovative research and incubation to improve consumer financial well-being. As an independent cooperative finance think tank, Filene’s membership network connects a community of leaders and bright minds to change lives through innovation, truth and cooperation. In addition to delivering cutting-edge, actionable academic research, Filene also provides incubators to test and scale solutions, events to spark organizations into action and advisory services to help accelerate and implement innovation. For more information, visit filene.org and @fileneresearch.

In October 2021, the U.S. Financial Stability Oversight Council released a report stating that climate change is an “emerging threat to the financial stability of the United States.” Credit unions have a special opportunity to not only react to this growing challenge but to lead the transformational change that is necessary to confront the increasingly severe impacts of climate change and bring members and the entire consumer finance system proactively into a climate-resilient future.

On July 28 at 12:00pm ET, Filene and its research partner, Ceres, are hosting a discussion on a first-of-its-kind report for the credit union industry.

This free webinar will:

• Identify a range of recommended actions credit unions can take to make climate change a strategic priority;
• Deepen your understanding of the potential impacts from climate change; and
• Develop collective resources to measure, analyze, disclose, and mitigate their exposure.

Facilitated by Filene Senior Research Director Taylor Nelms, the webinar features guest speakers from Ceres Accelerator for Sustainable Capital Markets, Credit Union Association of New Mexico, Kaua’i Federal Credit Union, and Inclusiv’s Center for Resiliency and Clean Energy.

Register today for the webinar: An Unavoidable Challenge: The Changing Climate for Credit Unions

About Filene

Founded over 30 years ago, Filene works to strengthen organizations through cutting-edge research, incubation opportunities to test and scale solutions, advisory services to help organizations implement innovation, and host communities and events to connect a community of leaders to improve financial well-being. For more information visit www.filene.org and @fileneresearch.

Overdraft protection (ODP) programs have become a reliable source of noninterest income for many credit unions, especially small institutions. But in the wake of the COVID-19 pandemic and recession, many credit unions and banks are eliminating or restructuring their ODP programs, as well as their fees and noninterest income mix overall.

View the Report Summary Slides

One reason, Filene reports, is shifting consumer behavior and expectations are sparking a public reevaluation of the purpose of fee-based services like ODP, especially as recognition grows that such fees typically affect a small group of members who tend to have lower incomes and weaker credit histories.

This begs the question: What if credit unions’ dedicated efforts to understanding why members overdraft—and then built products or services that served them better, such as small-dollar line of credit programs? Isn’t it time to reimagine overdraft protection?

In this report, Overdraft Protection Programs: Credit Union Best Practices, Filene Economist Luis Dopico presents several key findings on ODP programs. Through intensive interviews with 16 credit union leaders and a review of the ODP landscape, the report offers credit unions the opportunity to reimagine their ODP programs and better understand their most vulnerable members while diversifying their sources of noninterest income.

Complete Filene’s online form today to download the full report or view the summary slides here.

About Filene

The Filene Research Institute, based in Madison, WI, works to strengthen organizations through cutting-edge research, incubation opportunities to test and scale solutions, advisory services to help organizations implement innovation, and host communities and events to connect a community of leaders to improve financial well-being. Learn more about Filene and available reports on a range of credit union topics at filene.org.

In this 14-min episode of the CUNA News Podcast, Mike Schenk, CUNA’s deputy chief advocacy officer for policy analysis and chief economist, and Dawit Kebede, CUNA’s senior economist, provide an overview of the lending environment and an economic forecast for 2022.

They say credit unions can look for a return to normal savings and lending growth in 2022.

The conversation, recorded prior to the emergence of the omicron variant, also touches on three aspects of concern to CUNA economists: supply chain disruption, the Federal Reserve’s decision to scale back purchase of securities, and ongoing vaccine hesitancy. The latest CUNA economic update is expected to be released mid-January, and can be viewed on CUNA’s website here.

Listen to the CUNA News Podcast in Apple Podcasts, Google Podcasts, Spotify, and Stitcher Radio.

Listen Now ►

5300 Call Reports are more than just reports credit unions are required to submit. Yes, they’re time consuming, and yes, there are penalties for filing late. But if you take those points away, you’re left with a wide range of opportunities.

Call Reports are not only your credit union’s financial snapshot and well-being in that given quarter. Compared to previous quarters, these snapshots could show different timelines of success depending on how you interpret the previous data and plan future projects. Checking spending, assets, liabilities, income, membership, online activity, lending, fees, etc. can determine what areas need improvement, attention, or a ramp-up in activity. The report can also help avoid any nosedives into risky waters and ensure a good system of checks and balances.

The Call Report allows you to assess large changes from quarter to quarter and ensure assets and liabilities match. Even though credit unions check their financials monthly, any huge jumps or falls in any of these categories should be documented.

With the pandemic throwing data into a whirlwind of loss and opportunity, preparing Call Reports was a little different this year. The National Credit Union Administration (NCUA) revised its reporting content and due dates to accommodate modifications brought on by the CARES Act, which includes the addition of new sections in the report. With this added information, you can not only see other credit unions’ financial snapshots by location and asset size to determine interest rates of competitors, but also how other credit unions were or have been dealing with the pandemic.

It’s also important to note that you should have supporting documents for your Call Report, since NCUA examiners will use the report in their examinations, where they also assess your credit union’s governance and compliance and financial well-being.

Gathering and reviewing all necessary documents and preparing the report, especially now with the CARES Act modifications, can be a tedious and laborious task. And we all know that having all your eggs in one basket can bring in more risk. Using an impartial, third-party relationship not only takes that load off your hands, but provides your credit union with an extra measure of security for financial information by separation of duties, enhances internal control, ensures accuracy, and helps alleviate risks.

At CU Resources, we prepare Call Reports for credit unions regardless of asset size or data processor. CU Resources delivers reliable, compliant and efficient accounting services that are tailored to your credit union.

To learn more about CU Resources’ CU Accounting Services, visit carolinasleague.org/CUaccountingservices.

Effective internal controls are the backbone of any financial institution. It’s the systems, policies, procedures, and processes affected by the board of directors, management, and other personnel to safeguard your credit union’s assets, limit or control risks, and achieve objectives. Establishing the appropriate internal controls allows your credit union to provide assurance to management and employees, but most importantly, your members.

Finding the right auditing group is a crucial step, and it’s important to have an auditor familiar with credit union operations.

As a best practice, credit unions should evaluate their internal controls routinely to ensure proper functionality. An effective way to do this is to perform procedural walkthroughs of current systems and ensure that proper safeguarding tools are in place and that there are appropriate processes in place for all operating functions.

This will make certain that your credit union is identifying and mitigating potential areas of risk, controlling the sharing of member information, and producing accurate and timely financial reports, while staying in compliance with all laws and regulations.

To ensure your credit union is in compliance with state and federal regulations, an auditor will evaluate your credit union’s risk and internal controls to make sure they’re all in place and in alliance with policies and procedures and state and federal regulations. Auditors will review or run tests in different areas, including business processes, risk management procedures and processes, quality and control processes, financial and operational information, and employee actions. After, you’ll receive a report of your internal control structure and level of control risk, along with recommendations on how to improve your internal controls and governance processes.

Want to learn more? CU Resources is here to help!

CU Resources Audit Services specializes in more than twenty types of services, while being consistent with Generally Accepted Accounting Principles (GAAP) as prescribed by the National Credit Union Administration, North Carolina Credit Union Division, and South Carolina Board of Financial Institutions.

If you want further information on the internal control process or our internal audit services and procedures, please contact CU Resources Audit Services at auditing@carolinasleague.org or visit carolinasleague.org/audit.

Is your credit union’s CEO or other senior-level executive planning to retire soon? Of course, it’s critical to find a qualified, talented candidate to fill those shoes, but if the upcoming retirement date is within the next year or two, you may already be behind.

Succession planning is a critical tool in the long-term success of your credit union, but you don’t need to wait until a retirement or resignation is pending. In fact, it can be dangerous to do so. Things happen unexpectedly – whether in a tragic situation such as illness or death or in a key employee’s unexpected opportunity to relocate or pursue a “can’t-refuse” offer, your credit union can be caught completely unprepared with a sudden leadership void. In a perfect world, a succession plan is a written, board-approved document with steps, timelines, and contingencies. But there’s much your credit union can do to begin its focus on possible succession needs.

Start by assessing which leadership roles are truly critical in your organization. The CEO role may be the main focus for most credit unions, but others include senior-level roles in their planning. From there, you’ll need to identify the knowledge, experience, skillsets, and educational background that ideal candidates would bring to each role. You may choose to identify traits and talents possessed by the incumbent, but future planning is a great opportunity to assess fresh skills that would be valuable in your organization.

The next step is to look within! Begin by assessing your internal talent pool. Perhaps you have one or more “heir apparent” team members, but it may be best to cast a wider net in your consideration. Do you have team members who show promise for assuming leadership roles in the near future, with the right development plan? Assessment tools can be extremely useful in identifying some perhaps-hidden strengths possessed by your team members. You may also find that some individuals who soar in their current role may not be well-suited for newer, more challenging roles. Assessments can play a critical role in identifying the strengths and even the challenges that internal candidates may bring to new opportunities.

The Carolinas Credit Union League’s professional development opportunities are critical for current leaders and high potential employees within your organization. Having a strategic and focused development plan will aid in ensuring future success and sound succession planning practices. The League has created targeted programs and services to assist your respective credit union journey. Our Leadership Development Institute and TalentGuided Coaching are open to our membership and are available for immediate implementation within your development and succession plans.

A critical component of your long-term succession plan is consideration for recruiting outside talent. While internal development of key staff members will always be beneficial to the credit union and the individuals, it is not always possible to find the most qualified candidates internally. League HR Consulting Services has assisted dozens of credit unions throughout the Carolinas with successful recruiting of CEOs and other executive and senior staff members.

If our HR Consulting Services can assist you or your board with your long- or short-term staff planning, please reach out to me at switteborg@carolinasleague.org.

The following three key trends emerged from the data:

• Liquidity decreases for the first time since the onset of COVID-19. At 69.5%, the loan-to-share ratio expanded 77 basis points over the past three months but is down 6.7 percentage points annually.
• Credit union lending regains strength across various segments over the past quarter. At $206.7 billion, 2Q originations outpaced the first quarter by 13.7%. Year-to-date loan originations increased 23.6% year over year as of the second quarter. Credit unions in North and South Carolina originated $7,310,657,275 in loans during the second quarter.
• Asset quality remains strong through the pandemic. Total loan delinquency was 0.46% as of 2Q, the lowest on record. New auto delinquency decreased 10 basis points annually, to 0.23%, the lowest of any product. Loan delinquency in North and South Carolina was 0.83% for the second quarter.

Callahan currently has 99.6 percent of the industry’s data through its early data program. Log into CUAnalyzer today to see how these trends impacted credit unions in North and South Carolina.

Need help getting access? Contact Callahan directly or contact the League for assistance.

Whether in need of routine work, a last-minute project, or an innovative approach, League CU Resources is a reliable source of operational support and credit union-exclusive products and services. From audit & accounting services to HR consulting and trusted business partners services, CU Resources is ready to shoulder some of the workload for busy credit unions.

Accounting Services

CU Resources Accounting Services can provide a full accounting package or a la carte work to fit each credit union’s needs. Its more than 30 years of accounting experience in the credit union industry means CU Resources has the expertise to deliver cost-effective accounting work regardless of a credit union’s asset size or data processor. Among the most popular with credit unions today are:

• Fixed assets
• Prepaid accounts
• Accrual accounts
• Corporate, bank and general ledger reconcilement
• Financial statement preparation

Audit Services

An impartial, third-party relationship for audit services provides an extra measure of security for financial information and enhances internal control. And in an increasingly complex regulatory environment, a team committed to a credit unions’ success makes a big difference.

CU Resources Audit Services draws on its own 30-plus years of experience to provide a competitive rate and service consistent with Generally Accepted Accounting Principles (GAAP) as prescribed by the National Credit Union Administration, North Carolina Credit Union Division, and South Carolina Board of Financial Institutions. Among hundreds of audits performed, the most requested include:

• Internal control reviews and cash audits
• Regulatory compliance audits including BSA, ACH, SAFE Act
• Fraud audit services
• Verification procedures

HR Consulting

Credit unions are people who lead and serve, so finding the right personnel is critical. Led by League VP of HR Consulting Susanne Witteborg, CU Resources’ HR Consulting brings more than 20 years of combined expertise in all aspects of human resources management and payroll. From small specialized projects to complete outsourcing of a credit union’s human resource functions, HR Consulting is ready to shoulder any credit union HR need, including these recently trending requests:

• Executive Searches & Support Staff Recruiting
• Human resources audit
• Handbook / policy review
• HR training topics for Supervisors, Board or staff

Business Partners

From longtime industry partners like CUNA Mutual Group to upstart innovators of text-messaging and other member-service functions, CU Resources maintains relationships with carefully selected business partners who have answers for credit union needs and deep commitment to credit union success. Solutions are broad ranging and often customizable, offering value to credit unions through expense reduction, income generation, member convenience, and more. See the League’s business partners here, and reach out to CU Resources Director of Business Development Susan Allred to learn more or discuss unique challenges.

Today’s challenges are numerous, and the right people can make all the difference. From hands-on auditing and accounting services to executive management searches, and from strategic assistance to connections for compliance, lending, technology, or shared-branching solutions, look to League CU Resources for trustworthy expertise from those who care about credit unions.

Connect with CU Resources today!

Join Filene for this special research virtual event, June 22-23, 2021, bringing together two of its newest Centers of Excellence: Diversity, Equity and Inclusion and Community Social Impact.

Regardless of scale, from the branch to the neighborhood and beyond, foundational credit union values—of inclusion, equity, and security—can lead to profound positive transformations. The prosperity of the credit union community feeds back into the prosperity of the credit union, ultimately showing that credit unions are the communities they serve.

In this special research virtual event, Filene brings together academic and industry experts from the Centers of Excellence for Diversity, Equity, and Inclusion and Community Social Impact to dig into what it takes to build inclusive and resilient communities—both inside and outside the credit union. 

• Learn about the hidden inequalities facing your members and employees and action-based strategies for tackling those inequalities.
• Gain an understanding of inclusion and resilience—from both organizational and financial perspectives—and how to foster more inclusive and resilient communities inside and outside your organization.
• Walk away with practical resources to align your DEI and social impact strategies with your business model, offerings, and operations, to track your progress, and evaluate the outcomes and impacts of your work.

Meet Filene’s Research Center Fellows!

Center for Community Social Impact Dr. Mai Thi Nguyen Associate Professor of City & Regional Planning University of North Carolina at Chapel Hill Read Bio »	Center for Diversity, Equity, and Inclusion Dr. Quinetta Roberson John A. Hannah Distinguished Professor of Management and Psychology Michigan State University Read Bio »

Registration at Filene events is included with membership. Not sure if your organization is a member? Reach out to engage@filene.org to find out more.

REGISTER »

This article appeared originally on callahan.com and is the intellectual property of CALLAHAN & ASSOCIATES. No part may be reproduced, transmitted, distributed, published, or otherwise communicated without the express written permission of CALLAHAN & ASSOCIATES.

While benchmarking your performance against asset-based peer groups has value, relying strictly on asset size for peer group analysis can skew your benchmarks by including credit unions that don’t share much in common with your institution.

Just take a look at this actual example of two credit unions within the same NCUA-designated peer group:

As the table shows, these credit unions are not an ideal comparison for each other even though they are included in and impact the numbers of the same peer group. For more accurate benchmarks against which to measure your credit union’s performance, try using the criteria below in addition to asset size.

Three Peer Group Ideas That Go Beyond Asset Size

Business Model

Credit union financials and operations can differ greatly based on the business model. For instance, non-interest income makes up 61% of Credit Union A’s total income while it comprises less than 25% of the total income of Credit Union B’s. This not only signifies a difference in how these credit unions generate revenue but also impacts key financial performance ratios like net interest margin and ROA.

Loan Concentration

Loan concentration and production show where a credit union’s lending activities are most active and how it generates loan interest income. For example, Credit Union A’s loan composition is made up of 85.9% 1st mortgage loans while Credit Union B does not offer mortgage products and more than 56% of its loans are for new and used autos. Loan mixtures and concentration data help show an institution’s business focus and internal goals, letting you create peer groups of credit unions that are similar to yours in terms of strategy and operations.

Geography

Market dynamics, economic situations, and competition levels differ among geographic regions, states, and even counties. Considering geography is vital as location often impacts members’ demand for financial products, financial capacity, and lives in general. Members in Mississippi may have a different set of wants and needs than those in Texas.

Benchmark Your Credit Union’s Performance

Callahan’s data and analytics tools, Peer-to-Peer and CUAnalyzer, make it easy to build custom peer groups using the data and strategies listed above and more. With hundreds of pre-built formulas, graphs, and tables it’s easy to compare your credit union directly to relevant credit unions and banks.

The League-sponsored CU Analyzer tool presents individual credit union performance metrics, enables custom analytics, and presents information in an educational format useful for non-financial staff in assessing bottom-line impact. (For background on CU Analyzer, view the recorded October 15, 2020 webinar hosted by the League and Callahan & Associates), then login to CU Analyzer or register as a user at CreditUnions.com. There is no limit to the number of users per member credit union.

Direct any questions on CU Analyzer access to CCUL's Brandon Pugh at 803-732-8410 or bpugh@carolinasleague.org.

“I attribute Bill to my ability to write loans and underwrite loans, and anything I know about lending is from him,” shared DeCorte during the roundtable. “He has the keen ability to understand lending like I’ve never seen before. He’s definitely known in the lending circle as an amazing and intelligent lender.”

Vogeney, chief revenue officer for Ent and self-professed lending geek, led the day’s session, sharing tips for loan growth most suitable for credit unions under $100 million in assets. His tips are summarized below. To read in full, check out his recent blog post on CU Management powered by CUES.

For more on the League’s small credit union initiatives and the Small Credit Union Peer Group, visit carolinasleague.org/page/smallcus.

Vogeney: 5 Tips to Pump Up Your Loan Growth

Bill Vogeney, Chief Revenue Officer, Ent Credit Union

No. 1: Be Bold About Making Personal Loans

When considering consumer demand and the growth in competition, the action is in the personal loan market. Whether the loan is for consolidation, home improvements or paying off a specific account like a private student loan, personal loans are becoming increasingly popular with consumers. To be competitive in this market, your credit union can’t be afraid of making larger personal loans.

No. 2: Sharpen Your Pricing Pencil

Credit unions historically lag the market in adjusting to rate shifts up or down. Given the alternative to lending is investments and rates are in a word, pitiful, we have a lot of room to move rates and generate additional income from lending. While your credit union is likely seeing some seemingly irrational pricing in the marketplace, your competitors may not be as crazy as you think. There’s a lot of liquidity in the system that is driving this extreme level of competition. Now is the time to evaluate your pricing models and make sure you’re competitive enough to earn your members’ business.

No. 3: Recognize That Repayments and Pre-payments Are Half the Problem!

When rates have dropped in the past, we quickly experienced a mortgage refinance boom. Increasingly, when rates drop, consumers are looking to refinance everything. You can expect to generate a lot of loan volume if you’re ready to capitalize on the refi opportunity. The problem is that you have members looking to do the same thing with your loans, and they’re going to other lenders to do it. Controlling repayments by having a process to follow up on member payoff requests and offering to keep the member’s loan at the credit union are critical. Time is of the essence; refi offers must be made almost immediately to make sure your drive to generate more loan volume actually leads to loan balance growth.

No. 4: Improve Your Mindset

It’s easy to write-off a tough year for loan growth due to the economic climate. Winners, whether they’re businesses or athletes, tend to be winners because they have a track record of overcoming adversity. Having the right mindset—that your credit union will overcome the economy—is a big part of generating loan volume and growth.

No. 5: The ‘3’ Most Important Factors to Loan Growth

To have the right mindset, it helps to have a strategy to back it up. Like the old saying about the three most impact factors in real estate (location, location, location), ultimately the three most important factors to loan growth are preparation, preparation, preparation. It helps to have a plan to generate loan growth, regardless of the direction of interest rates and the economy in general.

If rates are falling, think refinance! Refinance every piece of debt you can for your member. Make sure you’re not lagging in moving your rates. Have a plan to control faster prepayments and your members taking their credit union loans elsewhere.

If rates are rising, you might not have the mortgage volume you used to have, but consumers will always have the need to access cash from the equity in their homes, so consumer demand will shift to home equity loans instead.

Developing a strategic plan to reach the Hispanic community

As we look to the ever-changing future credit unions face, it’s no surprise that lenders are shifting their attention to diversity when it comes to their products, services, employees and members. With nearly 60 million Hispanics living in the US, many credit unions are focusing on strategies that make homeownership a possibility for their growing number of Hispanic members who want to achieve the American dream.

The Urban Institute projects that by 2030, 55% of all new homeowners will be Hispanic. And according to Freddie Mac, in 2018 there were 4.9 million mortgage-ready Hispanic Millennials, also called Hispanials, in the US. So why aren’t even more credit unions establishing a plan to attract either Hispanic members or employees? MGIC recently partnered with CUNA Mutual Group and I had the opportunity to ask Multicultural Strategy Manager Edgar Hernandez that very question –as it turns out, it’s for the simple reason that many credit unions simply don’t know how to go about reaching the Hispanic demographic.

So, what is the best way to attract this new, untapped set of potential first-time homebuyers? According to Edgar, credit unions should focus on what we know Hispanics value most. This article will help you better understand the Hispanic homebuying demographic and develop a more diverse outlook on these prospective first-time homebuyers with some valuable strategies, tools, and cultural insights.

Hispanic values: Family, trust, language, community

To start with: Family is everything in the Hispanic community. Hispanics tend to focus on the collective well-being of their families rather than on individual wellness and prosperity. They’ll typically base their decisions on feedback from parents and other trusted family members. Extended family members might even attend meetings with a loan officer regarding the purchase of a home, even if they won’t be on the mortgage. Many Hispanics also have multigenerational households, meaning they live with multiple extended family members under the same roof. Hispanics are twice as likely to live in a multigenerational household than the general population. This is important for real estate and mortgage professionals to keep in mind when Hispanic members are looking for homes.

Building a trustworthy relationship with your Hispanic borrowers is also incredibly important. Mortgage professionals must take the time to listen and be open-minded when it comes to differences in cultural traditions, language and the decision-making process. Hispanic members are not shy about asking questions to better understand the homebuying process, and the loan officer or mortgage professional is viewed as a trusted advisor. That’s why maintaining an open and welcoming manner is critical to building trust with Hispanic homebuyers and their families. And the mortgage professional shouldn’t be shy about asking questions, either – it can be helpful when it comes to better understanding the culture or language.

Since communication is key, language is also important but being able to speak Spanish isn’t always a required trait to reach this group. More than 80% of Hispanials speak and understand English, and of Hispanic adults 36 years or older, over 50% are English-proficient. If translation is needed, another family member will most likely help.

Hispanic homebuyers want their lenders to be visible and be a part of the Hispanic community, so a credit union’s physical presence in the community is also critical. It helps build trust and credibility. The best way to attract and gain more leads with Hispanics is through word-of-mouth referrals. “It’s not enough to have an office in the community,” said Edgar. “Lenders and mortgage professionals should engage in their local Hispanic Chamber of Commerce, trade organizations, industry events and Latin American Consulate.”

Tools to help you attract and build a diverse member base

As a leading provider of mortgage insurance and partner to credit unions who want to reach the Hispanic community, MGIC offers resources and strategies that can help you attract and build a diverse member base, including:

• A Hispanic marketing webpage, where you can obtain access to MGIC’s tools and resources such as co-brandable flyers and infographics
• Readynest.com, a consumer-facing website in Spanish with affordability calculators, checklists and other homebuying tools
• A comprehensive Spanish Homebuyer Education program with materials to guide your first-time homebuyers, as well as a Homebuyer Education test

Using tools like these can help you reach the Hispanic demographic by building understanding, trust and comfort with your Hispanic members. As a bonus, they can also help you develop your Hispanic cultural competency and be more inclusive in your marketing efforts – while moving into expanding markets – and make a huge difference in the growth of your business.

About CUNA Mutual Group

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Corporate headquarters are located at 5910 Mineral Point Road, Madison WI 53705.  

The “last mile” is a ubiquitous term that originated in the telecommunications industry to represent the final leg of delivering service to a member. Most of the time it referred to installing copper wire that connected the local telephone exchange to individual landlines.

More recently, the term represents what can be the final and most challenging part of a consumer interaction. Generally, it’s the point at which a broad consumer service interacts with an individual member to deliver a personalized experience.

In financial services, this is most often in the form of digital documents created to meet the exact specifications and compliance requirements of an individual transaction that allow a loan or deposit to be booked.

The last mile concept is changing the way credit unions approach their digital strategy. Previously, many credit unions focused on digital services to a broad member base that allowed users to access account information, pay bills and transfer funds. Lesser in the strategy was the ability to originate a loan or deposit transaction through a digital channel, and even less likely to be contemplated was the member experience while documenting and booking these types of transactions.

Often, what would begin as a digital experience through a mobile device, tablet, or PC would quickly revert to a less accessible process that concluded with a member coming to a branch to manually sign an agreement.

Credit unions today are recognizing that a shift in their digital strategy is required. Increasingly, credit unions are reshaping their digital presence to focus on the “last mile” – the hardest part of the member journey that requires an individualized experience. Building a foundation focused on this critical member touchpoint requires credit unions to deploy technology that documents, in a fully compliant manner, consumer and commercial loan and deposit transactions while at the same time supporting a fully digital member experience.

In seeking fintech partners that can support this digital strategy shift, credit unions are identifying essential attributes and capabilities to enable effective execution:

• Integrated Capabilities: Disparate systems require data to be imported and exported to avoid data conflict. A single system of record, integrated with digital document capabilities and a two-way data flow, supports data integrity while eliminating the need to access separate solutions.
• In-house Compliance Expertise: Documenting transactions in a compliant manner is essential. State and federal mandates change frequently. In-house compliance expertise supported by unique research capabilities ensures the documented words are accurate and up to date.
• Electronic Closing Enabled: The ability to leverage technology from origination to member signature without deploying manual workarounds or static forms.
• Reinvestment in Technology: Digital capabilities continue to evolve. Gone are the days of generic templates and static documents. A partner that’s focused on both current and future capabilities ensures a credit union isn’t left behind the times.

By Christopher Roe, SVP Corporate & Legislative Affairs
CUNA Mutual Group

More than ever, 2020 has shown a spotlight on the incredible impact that credit unions make in their communities. Whether it’s working around the clock to process Payment Protection Program loans, participating in social justice initiatives or giving their employees time off to vote, credit unions have consistently demonstrated their commitment to serving the needs of their communities.

But equitably meeting those needs in minority or low-income communities takes commitment and innovation. That’s where the U.S. Treasury Department’s Community Development Financial Institution (CDFI) Program can help.

Created by Congress in 1994, the CDFI program was designed to combine federal money with private capital to help qualified financial institutions meet the need of under-served communities that typically lack access to affordable loans and safe financial services.

Benefits of the CDFI Program

Mission driven credit unions are dedicated to financial inclusion, and the ability to apply for capital or technical assistance grants is often a top draw for credit unions. In September 2020, the CDFI fund awarded grants totaling $45.8M to 111 credit unions.

Additional benefits of the CDFI program include:

• Access to additional training resources
• Exemption from the NCUA’s member business lending cap
• Membership in a learning community of like-minded credit unions to share ideas
• Limited exemptions under the CFPB Qualified Mortgage and Ability-to-Pay rules.

What a CDFI Credit Union Looks Like

Not every credit union will qualify as a CDFI. There are seven tests for CDFI certification, most of which are automatic or easily fulfilled by most credit unions. A good CDFI candidate makes it their primary mission to provide development services like financial education and coaching for those community members who need it most. That commitment can be seen in the makeup of their governing or advisory boards, providing a reflection of the communities they serve.

The real hallmark of a CDFI credit union is that their lending activities are predominantly focused on target populations in economically depressed areas, low-income communities, or other historically under-served populations.

Dispelling the Myths

It’s a common misperception that the CDFI certification is primarily for small credit unions. In fact, asset size is not a qualifying factor and currently there are 39 CDFI certified credit unions with more than $1 billion in assets. But the impact of CDFI grant dollars is magnified in a small credit union.

Because of the low mortgage rates, Opportunities Credit Union has seen mortgage activity in 2020 equal to 270% of their 2020 plan. “Over a third of our mortgages in 2020 have been made to immigrants and refugees,” says Laud.

Another common misperception is that it is just too risky to focus on under-served communities. Terry Ratigan from Inclusiv states that their research shows quite the opposite.

“The median community development credit union actually outperforms the median non-CDFI in earnings, lending, asset growth and membership growth,” says Ratigan. “We have documented these results in both our 2018 and 2020 Inclusive Finance reports.”

Comparable findings have been independently reported by NCUA and CUNA in public presentations.

Becoming and Staying CDFI Certified

Some credit unions may feel they just don’t have the time to pull together the data and the application to initially become certified. That time invested directly translates into benefits for your members.

“You have to understand your WHY--you don’t become a CDFI unless it is truly part of your mission and business strategy as a credit union,” says Mills. "It takes intentional commitment expanding who you serve and you have to be able to demonstrate your plan for any grant dollars received from the CDFI fund.”

Applications for CDFI certification can be accepted any time but there are two times a year (September and March) where the NCUA offers a streamlined application window. This can significantly reduce the data gathering burden for credit unions.

Taking Action

As a League, we are committed to the success of credit unions. Government funding for the program can change from year-to-year and there are currently legislative proposals for unprecedented levels of funding. We want to make sure all credit unions who qualify can take advantage of all CDFI benefits. Inclusiv is holding weekly informational meetings for credit unions interested in the CDFI program. Register here to learn more: CDFI Education Sign-up.

This article appeared originally on CreditUnions.com and is the intellectual property of CALLAHAN & ASSOCIATES. No part may be reproduced, transmitted, distributed, published, or otherwise communicated without the express written permission of CALLAHAN & ASSOCIATES.

It’s hard to identify many positive outcomes from a deadly pandemic, but enterprising credit unions are taking the opportunity to refine their digital offerings and expand their reach.

Moving existing members into less-costly delivery channels has long been a strategic goal for many financial institutions across the United States. To determine best practices for turning existing members into first-time digital users, Callahan & Associated dove into the data to identify cooperatives that have increased both membership and digital usage during the pandemic.

Truliant Federal Credit Union ($3.2B, Winston-Salem, NC) and Canvas Credit Union ( $3.1B, Lone Tree, CO) have both re-opened their lobbies, but they are continuing to refine the digital experience they offer their member-owners.

By The Numbers

David Pierce, Chief Information Officer, Canvas Credit Union

Canvas grew its roll of online banking users by 12% from March through September; membership at the Colorado cooperative grew by 2.4%. As of Sept. 30, 46% of its 262,257 members were online bankers, says David Pierce, chief information officer at Canvas. According to second quarter analysis by Callahan, 56.4% of new digital users were existing members.

Truliant, meanwhile, recorded a 7.3% growth in website users and a 1.6% growth in membership in the second quarter. Callahan analysis shows 64.4% of those new users were existing members.

Jeff Hibbard, Truliant’s vice president of digital innovation, says log-ins have increased by 18% since March, and 63% of its 267,735 members are now active users. For comparison, it was 59% at this point last year.

The most dramatic growth at Truliant occurred within the remote deposit functionality. Enrollment for that has grown 27% and volume has surged 49% since March. According to Hibbard, volume has begun to trend down after a summer peak, but 40% of Truliant’s check deposits remain via mobile. That’s up 25% from before the pandemic.

Truliant Improves Current Offerings While Adding Others

Even before COVID-19 came calling, Truliant had been working to understand and resolve pain points.

Jeff Hibbard, Vice President of Digital Innovation, Truliant FCU

“The past two years, we’ve worked to build a base of innovation,” Hibbard says. “We’re not using that as a generic catch-all buzzword but as a business framework for improving our processes — working internally and with partners to build it into our credit union just like any other department.”

In July, the North Carolina cooperative added free external digital loan payments, eliminating the need for branch visits for that task. It also upgraded its RDC by eliminating the waiting period after signing up and giving immediate access to funds.

One major improvement underpinned all this.

“The website redesign project we started in 2019 proved a bit providential as it was completed during the crisis,” Hibbard says. “It was designed to be mobile first. Through it, we made the website more member and user friendly, and made it easier to find guidance for user journeys. If you need to buy a car, for example, we’re able to tackle a lot of your common questions and digitally guide you through the process.”

That flexibility enabled the credit union to respond to the pandemic with a fully digital self-service Payroll Protection Program application, skip-a-pay loan options, and an unsecured loyalty loan for existing members who lost income.

Current projects, Hibbard adds, include upgrades to the skip-a-pay experience through online banking and creating a better digital account and loan application process for new and existing members. Also coming soon is a new platform for members to access an expanded list of digital documents and improvements to the North Carolina credit union’s mobile app.

Each of those steps will be an answer to pain points and roadblocks identified through member feedback — things like tiered deposit limits and fraud risk management, which demand attention to compliance and risk but at the same time make banking easy.

“Find the right balance between creating the experience you want and fixing the things that create friction now,” Hibbard says. “Some of the clearest answers are right in front of you.”

Pierce, the Canvas CIO, says the coronavirus has also pushed the envelope on digital progress at his Colorado cooperative. Improving digital service has become a new part of its pantheon of imperatives.

“The pandemic accelerated the pace digital service adoption might have taken in years to just a few months,” he says. “Based on feedback from our members and shifts in consumer behavior, we added a new pillar to our vision to be known for ease of use.

“We see tremendous opportunity to use all the listening posts we have created to hear member feedback to inform our strategic roadmap for digital investment.”

Pierce says executing on the member-centric vision will be an iterative process that will include regular incremental service improvements amid larger investments.

“Throughout that journey, we will share each change, even the small ones, and invite member feedback, which we know will make us even stronger,” he says.

This article appeared originally on CUInsight.com and is the intellectual property of CUNA Mutual Group. No part may be reproduced, transmitted, distributed, published, or otherwise communicated without the express written permission of CUNA Mutual Group.

We’ve known for some time that credit union members would prefer accessing financial services at a credit union. While more than half of members report that, only 3% of members utilize their credit unions for investment services. That’s according to research from Kehrer Bielan, sponsored by CUNA Brokerage Services, Inc. (CBSI).

Now, during a time of global pandemic and economic uncertainty, it may seem counterintuitive to focus on investments. Members are struggling economically and face nerve-wracking uncertainty. But this is exactly when these services and strong financial planning need to be present and proactive within credit unions.

The same research found that 33% of households with at least one credit union member say providing for retirement is their most important financial goal. At a time when many people’s financial planning and retirement goals might be put off, credit unions should be the go-to source to help members through this crisis.

There is enormous opportunity for credit unions to do more to empower their members and help them through the uncertainty they face, as well as to grow their business by making investment services equally important as their savings, loans and insurance products.

But making investment services core requires more than just vision—it involves deep thought, a data-driven strategy and four core best practices:

1. Increase Advisor Headcount. Start by focusing on advisor recruiting. Use a junior/associate advisor model where senior advisors mentor those with less experience. This can fill your pipeline with promising, skilled professionals who can grow your advisory business. Nurturing the next generation of advisors is critical. Today, only 11% of advisors are under age 35.1 However, as baby boomers are expected to pass down up to $68 trillion of wealth to their Generation X and millennial family members, your credit union needs advisors on tap to build and nurture long-term relationships with these legacies.2 Work with an external partner or broker/dealer (BD) with deep credit union expertise to employ this model and drive headcount
   
   Best Practice 1: BENCHMARK – To enhance your wealth management program, set a benchmark to deploy at least one advisor for every $150 million in share deposits.
   
   
2. Drive Growth of Your Advisory Business. Working with a credit-union-focused BD also can propel your overall investment services strategy. A qualified BD can help your credit union develop a strategic plan, set company-wide goals that increase the number of members helped with wealth management services, and give you tools and technology to accomplish these goals.
   
   Look for a BD that offers robust advisor recruitment and onboarding services and marketing resources; has deep compliance and industry knowledge; and can provide ongoing training, education and back-office operations support for financial advisors. Once you have all these resources in place, you then can focus on advisor retention to maintain top performers and their clients.
   
   Best Practice 2: BENCHMARK – Ensure at least 50% of new investment assets go into advisory accounts.
   
   
3. Deliver Financial Planning. Provide centralized financial planning support for advisors, so they can focus less on administrative tasks and more on client acquisition that will generate long-term value.
   
   Also invest in data, analytics and product enhancements to drive program growth. Look at your initial benchmarks and success metrics to assess performance and opportunities for improvement.
   
   Best Practice 3: BENCHMARK – Generate half of your investment services revenue from fees on advisory accounts.
   
   
4. Increase Member Awareness and Drive Referrals. Driving member awareness and referrals is a crucial part of growing your advisory business. Streamline marketing activities across advisors and your credit union’s in-branch and digital marketing activities by working with a strategic partner who can help you:
   
   

• Create a 12-month integrated marketing and executional plan. It can include everything from employee engagement and referral programs to marketing campaigns and social media. This will be your go-to guide for going to market successfully and making investment services core to your business.
• Leverage advanced analytics to boost program growth. Using your proprietary data and supplementing it with financial behavior data will enable you to capitalize on the benefits of predictive analytics. These powerful insights can help you separate existing members into different customer segments.
  
  

Invest in Your Credit Union’s Future

Establishing an investment services relationship for members will deepen their connection to your brand— and their trust in it. As research shows, members who enter into this engagement with their credit union do more business with you in the long term. Making investment services core also requires a well-thought-out and integrated strategy where every part of your organization—including advisors—is laser-focused on the benchmarks and goals that will make this new vision a reality.

Are you ready to make investment services core to your credit union? Discover more resources and best practices.

Frank Smith is the Director of Investment Solutions at CUNA Mutual Group. In this role, Frank leads the Executive Benefits, Retirement, and CUNA Brokerage Services, Inc. (“CBSI”) specialist teams. These three teams deliver wealth management services to a credit union’s key constituents – executives, front line staff, and members.