by Chip Filson

America has the largest, and by many measures, the most vibrant economy in the world. Economic growth continues with only infrequent recessionary speed bumps, unemployment remains low, job creation absorbs new workers, and inflation seems to be a distant news story from the early 1980s.

Americans live in a very different economy from 1909 when consumer financial services did not exist or even from 1934 when unemployment exceeded 30 percent during the Depression. Those dates mark the founding of the first state chartered credit union and the passage of the Federal Credit Union Act, which enabled credit unions to be organized in any state.

If the economic circumstances for the average American are so much more abundant in the first decade of the 21st century, is there still a need for credit unions?

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Peter Sainato is CEO of Justice FCU operating out of Chantilly, VA. Justice is a $400 million credit union of 43,000 members serving the U. S. Justice Department, Homeland Security, and law enforcement communities around the nation. Lately it has been quite successful. Loan growth in 2005 was 22%; in 2006 it was 13%. The credit union just exceeded a net worth ratio of 9%. But management was displeased with member growth of 2.5% last year even though this figure is higher than the industry average. Sainato said that the credit union has launched a major initiative to increase value to the member and to attract new members.

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1. Return increased value to members when your net worth ratio is healthy (anything above 7.5%)

2. Examine each segment of your membership and develop programs tailored to each one.

3. Support your affinity groups to the highest possible level.

4. Make online lending applications very fast and very simple.

5. Target segment groups with marketing they will respond to: direct mail for older groups and website marketing for younger groups. Use focus groups to drive your future.

Jim Blaine is CEO of State Employees Credit Union in North Carolina, the nation’s second largest credit union. It has $14 billion in assets, 1.5 million members (nearly all in North Carolina), 210 branches, 900 ATMs, and 4,000 staff. Basically, SECU is a single sponsor credit union, its FOM being state employees, public school employees and their families. Last year the capital ratio was 7% and ROA “minimal owing to a flat yield curve.” But Blaine says the financials are on target, healthy and supported by the Board.

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1. Offer products that set you apart and that people understand are meant to help them. Be different because “me too”
doesn’t get it!

2. Offer products that help struggling members save for their future.

3. Upgrade your infrastructure for greater convenience and lower cost. Always strive for quicker, better, cheaper!

4. Recreate your job descriptions to expand staff opportunities and challenge their abilities.

5. Offer financial products at no commission with salaried staff so members understand they are getting unbiased information.

6. Support the local community with programs that truly help people and help grow your local economies.