By Fred Johnson
"I just checked in to see what condition my condition was in" may not be the formal anthem of the banking industry, but when I open the morning papers, it seems that it is now their driving philosophy. I watched with dismay as regulators seized IndyMac, while Washington Mutual's stock price plummeted, and Fannie and Freddie were absorbed by the U.S. government. Why'd it happen? In simple terms, mismanaged risk. Now, as the economy develops a more and more visible limp, bankers are checkin' in to see what condition their condition is in, and it's not good. What's worse, though, is that many credit unions are suffering collateral damage from the banks' poor risk management.
Credit unions, conservative by nature, did not participate in iffy subprime lending practices and they remain well capitalized. Nevertheless, as Tom Randle, CEO of Sarasota Coastal Credit Union, points out in his terrific post, many of our colleagues are suffering from the trickle-down from the mortgage mess, and it's threatening their very existence. These credit unions are working hard to overcome their individual problems, problems the rest of the movement can only imagine, but they need additional help.
Credit unions have an advantage; we are a cooperative movement. As such, we have not only the opportunity, but the obligation to work together to ensure the overall health of our industry. There is a range of things credit unions can do to help one another--everything from sharing back-office functions, like data processing, to buying loans from struggling CUs, to developing holding companies that allow credit unions to operate in their communities without sacrificing their autonomy. The movement is designed for credit unions to help credit unions. Let's leverage it.
CUES, your professional development resource, is taking steps to facilitate cooperation among credit unions and promote the long-term success of the movement. To start, we are tailoring the content of CEO Network to address the most pressing concerns of credit union executives. This isn't the time for a conference as usual. We're updating our Summit Meetings so you can network with your peers on topics such as collaboration, strategy, and innovation. David Colby, CUNA Mutual Group's chief economist, will provide an update on the economy and the challenges it presents for credit unions. Steve Williams, principal of Cornerstone Advisors, Inc., will facilitate an interactive panel discussion with Bob Siravo, CEO of WesCorp, Mark Hawkins, CEO of Altura Credit Union, and Gordon Dames, president/CEO of Mountain America Credit Union, to explore how CUs can emerge from the economic crisis. And, we will continue to adapt the conference agenda as the economic climate changes.
In spite of their conservative nature, not all credit unions will emerge from this economic crisis unscathed. Nevertheless, now, more than ever, it's time for credit unions to come together and collaboratively strengthen the movement.
Fred Johnson is president/CEO of CUES.
