The MCUL's Strategic Focus on Advocacy, Cooperative Advertising and the Credit Union Social Mission are a Bulwark against Future Challenges — and the Foundation of Future Credit Union Sucess.
These may not be the best of times for Michigan credit unions — but they are certainly not the worst of times, either.
In general, credit union financial numbers look healthy. Two long-sought legislative goals —modernization of the Michigan Credit Union Act and bankruptcy reform — are now written into the law. Support for credit unions and their tax exemption among Michigan’s federal lawmakers appears solid. Granted, the Great Lakes State’s economy is not performing particularly well compared with the rest of the country. But those old enough to remember Michigan’s unemployment rate at the bottom of the 1981-83 recession will look at today’s numbers and count their blessings.
So, as far as credit unions are concerned, things are going swimmingly at present — which guarantees absolutely nothing about the future. In fact, placid times often breed complacency and set the stage for new dangers, just as a storm in the natural world is often preceded by a period of calm.
“The success of the Michigan credit union movement is self-evident,” said MCUL Chairman James Dahl. “But a person doesn’t have to be an alarmist to recognize that we are facing some challenges on the horizon. “How can we best meet them? By conducting ‘business as usual,’ and ignoring threats until a crisis arises? Or by being proactive, and helping shape our environment so that the crisis never comes — or, if it does, so that we’ll be in a much better position to meet the challenge? The proactive approach is clearly the wiser, and that’s the encompassing strategy of the League’s three key initiatives — legislative advocacy, cooperative image advertising, and the Community Reinvestment Initiative.
“These three key areas should be a part of every credit union strategic plan and board meeting agenda and are the key components of the League’s new vision to protect credit union interests.”
Building Awareness and Support
Michigan credit unions closed the books on 2004 with more than $30 billion in assets and some 4.4 million members — meaning that about two in every five Michiganians now belong to a credit union. Those are impressive figures, but there’s another side to the credit union story. Not only are some three in five Michigan residents not members of a credit union, but millions of Michiganians don’t even know what a credit union is and can’t give a single reason why anyone would want to join one.
A recent survey of 1,400 Michigan consumers indicated that 23 percent of those responding, which included both credit union members and non-members, did not know enough about credit unions to have an opinion about them. Among the non-members, 39 percent could not give a single reason why a person should consider joining a credit union— the equivalent of some 3.5 million Michigan consumers.
Do these numbers matter? Absolutely, said MCUL President/CEO David Adams.
“Obviously, the survey results show that credit unions have a great deal of untapped potential for membership growth,” Adams says. “But the issue goes far deeper than that.
“A consumer who has no idea what makes credit unions unique is going to be hard pressed to come up with a reason why legislatures should craft The MCUL’s Strategic Focus on Advocacy, Cooperative Advertising and the Credit Union Social Mission are a Bulwark against Future Challenges — and the Foundation of Future Credit Union Success. Having a large segment of consumers, legislators and journalists who know nothing about credit unions creates some very fertile ground for the banking lobby’s brand of disinformation.”
As all credit union professionals and volunteers are well aware, bankers and their lobbyists have been in attack mode lately, aggressively targeting everything from the credit union corporate tax exemption to credit union regulation and membership policies.
“An informed legislature, media and public are critical to resisting the bankers’ attacks,” Adams said. “Persons who understand that credit unions are not-for-profit, member-owned cooperatives offering consumers a better deal will recognize that the bankers’ agenda is anti-consumer and has nothing to do with ‘fairness’ or a so-called ‘level playing field.’”
Educating Michiganians on credit union uniqueness and the better deal that not-for-profit financial cooperatives offer Michigan consumers is the essential mission of the Michigan Credit Union Brand Campaign, which is launching the state’s first ever statewide credit union TV ads this summer.
Said Adams: “When we ask members to contact their members of Congress to preserve our tax status, will they have any passion for that request? Getting out the message of our cooperative advertising campaign will definitely improve the likelihood that they will. And by the same token, when we need the support of state and federal lawmakers, their perceptions of credit unions can be greatly influenced by a wellcoordinated, statewide cooperative advertising campaign.”
But the benefits of participation in cooperative advertising aren’t limited to support for credit union advocacy efforts and improving the public’s perception of credit unions. Credit unions that participate at the full “fair-share” amount will receive dollar-for-dollar matching funds in their local DMA (Designated Marketing Area) funds up to a total of $1 million for the state of Michigan.
Also, full-share participants have access to a library of radio and print ad collateral materials than can be customized for individual credit union use in radio advertising, direct mail ads and lobby displays.
“Credit unions can also rest assured that their League is committed to providing support for a long-term cooperative advertising vision,” Adams said. “Last June, the MCUL Board of Directors approved a plan that provides a minimum level of funding for cooperative advertising, which could be used for either matching or supplemental funds on an annual basis equal to a minimum of $300,000 per year.”
Additionally, a strategy of allocating“projected excess earnings” will be used as a contingency reserve for cooperative advertising support, replacing the current policy based on a “balanced” approach that includes both dues reductions and service enhancements.
“This policy clearly demonstrates the League’s level of commitment and resolve,” Adams said.
Strong, Effective Advocacy
Strong legislative advocacy efforts are as old as the MCUL itself. “We’ve all heard it time and time again — we need more funding for MCULAF/ MCULLAF, we need more involvement in lobbying, lawmakers need to be educated about the credit union difference,” Adams said. “But no matter how often you hear the message, the call for greater commitment is always warranted.
“Much is at stake in the next 10 years in the legislative arena. With ever-growing budget deficits at all levels of government and with the loud clamor from banker associations to limit credit union progress and see them taxed, credit unions can’t afford to become complacent.”
Every credit union needs to adopt a plan for its political involvement, such as MCULAF/MCULLAF fund raising, direct involvement in meetings with lawmakers and participation in the MCUL and CUNA Governmental Affairs Conferences and “Hike the Hill” events.
“Last year, about 170 Michigan credit unions met or exceeded their federal PAC goal and about 50 credit unions met or exceeded their state PAC goal,” Adams said. “These numbers sound impressive, and with more than $380,000 raised for Michigan’s federal and state PAC funds last year, we led the nation in PAC fund raising. But the reality is that we still trail the banking industry in PAC fund raising by a factor of about 8 to 1.”
Participation in local meetings with lawmakers is also important. Most MCUL chapters hold regular legislative meetings each year, and maximizing credit union participation at these events is vital.
“With continued strong advocacy efforts, coordinated with the efforts of other states through CUNA, credit unions in Michigan and in the U.S. can be assured that bankers will not be setting the legislative agenda for the credit union movement,” Adams said.
Refocusing on the Social Mission
The final pillar of the League’s key initiatives is a refocus on the credit union social mission through the Community Reinvestment Initiative, or CRI.
“Even for-profit corporations, including banks, recognize that they need to demonstrate a degree of social responsibility,” Adams says. “But noble as some of these enterprises may be, they are still viewed as either a cost of doing business or one more means to the end of maximizing shareholder return. So, when banks and other businesses are involved in the community, it’s more about business than it is about the betterment of society.
“The credit union social mission is different. Credit unions are tax-exempt, not-for-profit cooperatives, and along with this status comes an obligation to work for the betterment of our neighborhoods and communities.”
That, in essence, is why the MCUL launched CRI, a voluntary campaign to document the fulfillment of the credit union social mission and to work toward expanding these efforts. Some specific ongoing areas of activity for the CRI project include:
- Cool Cities — Exploring opportunities for further expanding credit union lending programs to better target underserved individuals and groups.
- Shared Branching and Ethnic Group Outreach — Expanding access to credit unions through shared branching and business models that provide access to ethnic groups who would benefit from credit union services.
- Financial Education — Educating and informing young people, seniors and other demographic groups regarding basic financial affairs, including how credit unions can help them get ahead and control their financial future.
- Community Involvement — Participating in local community and civic activities, donating to charities and helping local communities grow and thrive through voluntary efforts at the local level.
- Affordable Financial Services — Developing resources and information regarding the credit union pricing difference on basic consumer financial services, including affordable auto and life insurance.
- Student Loans — Expanding credit union participation in student loan and student scholarship programs to help transform Michigan’s economy to a more skillbased focus.
“We know that most Michigan credit unions are deeply involved in their communities,” Adams said. “Much of the CRI project is just a matter of recording and documenting what credit unions are already doing under the long-standing credit union credo of ‘People Helping People.’”
CRI encourages each credit union to formally embrace its social mission by incorporating it into its strategic plan.“Doing so will not only help credit unions keep their ‘eye on the ball,’” Adams said. “It will also put us in a much stronger position when the next round of banker attacks begins.”
In the wake of the American Bankers Association’s aggressive Operation Credit Union” and other concerted attacks on credit unions by banking lobbyists and trade groups, the significance of that aspect of social involvement is especially acute.
“The heart of the bankers’ case for credit union taxation is that credit unions are really no different than banks,” Adams said.
“Maintaining a record of credit union social responsibility will mean we’ll have more than anecdotal stories to refute this claim— we’ll have proof. When members of Congress or the State Legislature ask us how we’re different, we’ll have tangible evidence of how credit unions are not only improving the lives of their members, but also benefiting the social and economic well being of their communities.”
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Regulatory Affairs
