What Are Your Credit Union Plans for 2008?

A new year is arriving with new opportunities. What’s in store for your credit union in 2008? Every credit union is different in size and field of membership structure, but everyone should have one common goal: GROWTH.

In the current competitive environment, if your credit union doesn’t grow, you won’t be around too much longer. Whether growth is through loans and/or increasing membership, it’s very important that each credit union’s management and board realize how important growth is to long-term survival.

There are several ways to grow your credit union. It could be through a “field of membership” or “charter” change; it could be a “marketing” effort; and/or adding new products and services for your membership. Remember, if you don’t offer products and services that your members want, they will go elsewhere to find what they need.

A “field of membership” change is a management and board decision. Signing up SEGs (Select Employee Groups), targeting family members, or changing to a community charter are opportunities for growth.

Marketing is a very key area where many small credit unions “drop the ball.” Small credit unions normally don’t have a marketing budget or sufficient staff to promote the credit union’s products and services to its membership. There is a cost to offer product and services to the membership so it’s very important to promote these products and services through a well-developed marketing plan.

One easy and effective way to market is to produce a quarterly newsletter. The Delaware League provides a generic template which you can use as the base for your own newsletter, with the addition of loan and savings rates, new loan promotions or products/services that are specific to your credit union. League communication director Alice Smith can help you with this effort.

Check with Jane Bailey at the League or Mid-Atlantic Corporate for information about new products and services for small credit unions, such as credit/debit card programs, gift cards, mortgage products, and an ATM network through partner relationships, to bring the best possible value to your credit union.

Growth – it’s the name of the game. Decide the best approach for your credit union and put a plan in place to grow your credit union. Don’t sit still and let other credit unions and other financial institutions pass you by. Move forward!

Strategic Planning – Why Do It?

Do We Really Need Strategic Planning?
     Setting the course for your credit union is one of the most crucial steps you can take to ensure that it not only survives, but thrives in this very competitive financial services industry. Strategic planning is part of setting that course. It can help answer the question, “Where are we and where are we going?”

How Will It Benefit Our Credit Union?
     Each credit union benefits tremendously, based on the unique make-up of the board, committees, and staff. If you have new additions to these groups, it will help to unify the group and clarify roles and responsibilities. For a more seasoned and mature group, the session will open the lines of communication to industry information, creative ideas, and possible solutions.

Why Get Involved in This Process?
     The competition to gain financial business is tense. NCUA is placing greater emphasis on a credit union’s ability to anticipate risk and manage growth. Leaders need to stay focused on economic and environmental issues and determine what impact they will have on managing the credit union going forward. Things that have worked in the past may not be effective in the future.

What Are Some of Your Current Issues?
     If you are like most credit unions, the changing environment brings a variety of issues for you to consider. Some of these might include product penetration, products and services, marketing and PR, capital position, business development, new technology, member relationship management, branding or name change, succession planning, physical office or staffing needs, and even charter conversion. If any of these issues are ones you are thinking about, then a strategic planning session can help.

Before We Commit to a Planning Session, What Should We Consider?
     Larger credit unions usually set up a planning session at a time other than the board meeting. If your credit union’s budget allows, you can bring in an outside facilitator (the League can provide referrals). This individual should understand a facilitator’s role and group dynamics, as well as be familiar with the strengths, weaknesses, culture, and issues of your credit union and the larger credit union movement. The session can be held at the credit union or an off-site location (the League office is available for such events).
     As mentioned in the opening paragraph, the League will be hosting a joint strategic planning session in February for those small credit unions that do not have the budget to bring in an outside facilitator.

How Do We Measure Success?
     What the credit union does with the results of a formal planning session will be the true measurement of success. Strategic planning is still one of the best things a board and staff can do for their credit union – and it is now being required by NCUA!
[This article was originally published in the Tennessee League’s Management Notes, August, 2005.]

CUNA Mutual Focuses on Small and Midsize Credit Union Needs  

The following article is from CUNA Mutual Group: CUNA Mutual Group introduced its new business model for serving small and midsize credit unions in October 2006. For more than 2,900 credit unions, that meant moving from a Sales Executive who visited the credit union to one who provided service via phone and e-mail.

One year into the transition, Robert Trunzo, EVP, Chief Sales Officer at CUNA Mutual, provides an update on the changes and their effects.

"At this time last year, many credit unions were understandably apprehensive about the change to a virtual service model, but the majority of them have now seen positives," Trunzo says. "Our feedback indicates that what they value most are the value-added information – white papers, webinars, and best practices – that we provide to help them with business issues, and the increased accessibility of their sales teams. With the new model, instead of waiting for their Sales Executive to check e-mail or voicemail at the end of a travel day, credit unions can get an immediate response to their question."

Trunzo explains that the virtual service model was built on four service criteria that credit unions said they needed from CUNA Mutual: be accessible; proactively contact us; understand our business; and be knowledgeable about CUNA Mutual products and industry issues.

"We know that the environment for small and midsize credit unions is challenging, and we've focused our efforts on providing value-added information to help them solve business problems," Trunzo explains.

CUNA Mutual has a group of 80 professionals, including some former credit union CEOs and Lending VPs, focused exclusively on small and midsize credit unions. They strive to proactively contact each credit union at least monthly to provide timely information, such as a white paper on how to write a disaster recovery plan, a webinar on proposed changes to Regulation Z, or an industry article on "phishing" fraud schemes. In August, CUNA Mutual partnered with the Filene Research Institute to bring credit unions a complimentary copy of Filene's white paper, Thriving Midsize and Small Credit Unions (see Why Some Midsize, Small Credit Unions Are Star Performers).

"We're looking at new ways to use virtual channels to help credit unions thrive," Trunzo explains. "Feedback has been very good on our expanded webinar product training, and we've recently launched an online resource called Marketplace Insights that provides presentations on industry issues by CUNA Mutual experts. We welcome credit union feedback on these new efforts so that we can make sure they are aligned with credit union needs."

Small credit unions in Delaware can contact Heidi Hodgson, CUNA Mutual Group, at
800-356-2644, ext. 7734, or your assigned CUNA Mutual representative.

Savings and Scholarships for Small Credit Unions
 
Take advantage of special resources to grow your knowledge, plan for the future, and improve your operations. The League offers scholarship vouchers every year for credit unions under $20 million in assets. These $50 vouchers can be used to attend League training events, to participate in the STAR or VAP certificate program, or to attend the League annual meeting. Additional scholarships are also available for registration to the annual Volunteer Leadership Conference in October.

The Credit Union National Association (CUNA) also has a scholarship program that assists small credit unions interested in eLearning Training Programs. This scholarship is designed to help smaller credit unions fund the course subscription costs for online learning. For details, visit www.training.cuna.org/lms/wbt_online_frm.html.

Why Some Midsize, Small Credit Unions Are Star Performers

A new Filene Research Institute report addressed reasons behind the success of small and midsize credit unions to thrive, compared to others that struggle with earnings, assets, and membership problems.

Authored by Robert Hoel, fellow in residence and former executive director of the Institute, Thriving Midsize and Small Credit Unions analyzes financial data, growth rates, and product and services information for 3,390 midsize and small U.S. credit unions that have continuously operated over a five-year period since January 2001.

The research compares the fastest asset growth rate against peers with slowest growth for midsize and small credit unions.

In the report, Hoel uncovers nine characteristics of the so-called star performers:
     1.  They are highly effective lenders;
     2.  Their members use their credit union extensively;
     3.  They pay members higher rates for savings than similar-sized credit unions;
     4.  They emphasize high-payoff product and service offerings;
     5.  They manage their expenses aggressively;
     6.  Their high deposit and loan balances per member cut their operating costs;
     7.  They do not rely solely on low loan rates to generate loans;
     8.  They usually generate more fee income than their peers; and
     9.  They invest their capital in growth.

The report can be purchased at www.filene.org. Click on “Publications” and select the appropriate title. The League also has a copy in our lending library, which can be borrowed by contacting education director Bernadette Hines.

 Small CU Staff Salary Survey

Designed exclusively for credit unions with $35 million or less in assets, this year’s report includes data on 14 full-time and 8 part-time positions in small credit unions. This essential report provides statistics on base salaries, incentives, bonuses, total cash compensation, and salary ranges for the most common positions. You'll be able to make meaningful comparisons, because the report displays results by asset size, region, number of full-time employees, number of services offered, number of members, and total amount of loans outstanding. For more than 20 years, CUNA has been a trusted source of statistics on credit union salaries and benefits. For information on how to obtain a copy of this resource, contact Alice Smith at the League office.

	Essentials is published periodically by: The Delaware Credit Union League 4 Quigley Boulevard New Castle, DE  19720 (302) 322-9341 or (800) 292-7875; Fax:  (302) 322-9354 Editor:  Alice Smith, E-mail:  alice@dcul.org