By Gary Easterling, CCE
Our members, our communities, and our nation need the credit union difference. Today is the day for the accumulated strength of the credit union movement to step up and give back to the member-owners.
Our banking cousins are "paying" for their obscene profits from recent years by squealing up to the TARP trough, allowing the taxpayer to pick up the tab for their greed. Credit unions have the opportunity to live our difference—meeting the needs of our members, our communities, and our country.
Banks have not expanded lending, even while accessing government funds. They repair their balance sheets, seek mergers and acquisitions, focusing on Wall Street performance, rather than Main Street need.
The credit union difference has always been absent the profit motive, greed from ownership. This is why credit unions did not make record profits in recent years. This is why credit unions are not paying the price for excessive risk today. This is why credit unions stand ready to help Main Street in crisis.
Action Plan–The Credit Union Difference. The credit union difference action plan is to demonstrate our willingness to rush into the panic with a helping hand. While others are fleeing with their hands filled with personal wealth, the credit union difference can spurn the personal profit motive and provide a lift to an ailing economy. Our action plan is three-fold.
First, our credit unions must join together in service to our members. Serving our members is why we exist. It is the right thing to do. The need is real, the crisis is now, and urgency is the watch word. It is good business and through member referral you will grow market share.
Second we must document our story. It isn't enough to do the right thing; we need to capture the details of our actions. By documenting our story we place it in the context of our response plan to the current economic crisis.
Third we must share the story with our community, our legislators, and our regulators. Credit unions have long identified themselves as the best kept secret. Telling our story is essential. Our members, our communities, our country needs to know credit unions are here with a solution.
Our message to our legislators should be: The only thing restricting our ability to stimulate our economy is:
- legislation that restricts member access to credit unions (FOM limitations);
- legislation that restricts our service to the business community (business lending cap);
- legislation that restricts our capital requirements (risk-based capital); and
- legislation that restricts access to more capital (secondary capital).
Our message to our regulators is that capital belongs to our members, and in our current economic environment we plan to use our capital to help our members get through this recession.
Tactics–The Credit Union Difference. Margins are tight, but rather than building capital on the backs of our membership, we need to shrink our margins to return more value to our members, stimulate our local economy, and pull our country out of the recession.
Net income is precious, but we need to engage our members and potential members with the message, "We are here for you"; or as my credit union's tag line says, "We'll get you there." The best kept secret needs to be secret no more. Spend some money and get the message out. Our members deserve to know we are here to help them.
It's time for a little charitable service. Return to our tradition: not-for-profit, not-for charity, but for service. For years we have built up capital. We like our capital. It is for safety and soundness. Our regulators like our capital. It is our rainy day fund. We say our capital belongs to our members. Well I've got news for you, our members are standing in the rain and we have the umbrella they need. We have the opportunity, the capacity, and the duty to help them. This is not the time to build capital on the backs of an overly burdened membership. This is the time to live our motto: People helping people.
Leadership–The Credit Union Difference. Leadership in this crisis and responsiveness to the need will serve us well in the state houses and on Capitol Hill. As the lawmakers stew and brew tighter oversight and increased regulation, our credit union movement, highlighting our heroes in action, can gain new powers in the face of tighter regulation as part of our economic stimulus. It is not enough to claim we were not part of the problem; we must demonstrate we are part of the solution.
There is need for reform, but not all reform should be tighter controls. Do we need improved oversight where personal greed can bias corporate actions away from public good? Yes! Do we need to empower and enable organizations that have embedded in their corporate DNA service to the public good? Yes!
Coming together as leaders we can finally demonstrate the credit union difference to our members, our communities, and our lawmakers.
Gary Easterling, CCE, is president/CEO of $745 million United Federal Credit Union, St. Joseph, Mich.
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