In a rapidly changing financial landscape,
key areas for credit union are on the right track
by Bryan Dahl,
MCUL Information Services Coordinator
Given everything that has unfolded for Michigan credit unions in the last two years alone, predicting the future isn’t easy. Premium assessments, mergers, Congressional efforts to further regulate financial institutions, and the ever-morphing spending and saving habits of consumers have made for an unpredictable and constantly shifting environment.
Not all of these rapid changes have been negative; in fact, many of them have presented historic opportunities on which Michigan credit unions have capitalized to spread their message and remain strong and reliable in a down economy.
One area that has seen significant positive change for Michigan in the new millennium is credit union brand awareness. Surveys facilitated by CU Growth Solutions show that the public’s knowledge of credit unions and who can join them has increased. The CU Difference initiative and previous cooperative advertising efforts have helped significantly. Is this larger understanding of the credit union message part of a continuing trend?
Bill Thiess, president/CEO of Detroit Edison CU, will soon be president of the new Lake Trust CU formed by a merger of his credit union with Lansing-based NuUnion CU. His take on the future of credit union perception is a positive one.
“As credit unions continue to grow and expand their products and services, there will be more movement toward the realization that credit unions are very sophisticated and progressive and can compete in just about any financial services arena,” Thiess said. “There is still a long way to go with the general public, but the current economy is definitely magnifying the differences between banks and credit unions, which is good for our business.”
Dave Cibulka, president/CEO of Saginaw-based United Financial CU, agrees that the perception of credit unions has changed in light of the challenges faced by the banking industry.
“Public perception of credit unions has changed dramatically over the past several years,” Cibulka said. “In view of the current home mortgage crisis, people have come to realize that the local credit union really does have their better interest in mind, and that the large, profit-motivated banks and mortgage companies really don’t care about the individual consumer.”
Grassroots lobbying efforts and the general relationship between Michigan lawmakers and credit unions have also taken enormous steps, and it looks like this will play a significant role in the coming years. Despite the challenge of keeping up with a constantly changing State House and Senate due to term limits, credit unions have worked tirelessly to enhance existing relationships and build new ones with the fresh faces.
Total Community CU President/CEO Phil Matous is pleased with the direction credit union legislative involvement is moving, but still feels more needs to be done.
“It’s not growing fast enough,” Matous said. “Our efforts are very strong and very effective, but with the decrease in the number of credit unions statewide, there are fewer volunteers at the grassroots level. I think credit union CEOs need to advise their staff more of the possibility of volunteering and bring them to the events. It’s catchy; people get it in their blood and realize they can do this.”
In terms of a broader look at how the credit union landscape could change in the coming years, many seem to agree that specialization will begin to play a role.
“Credit unions will continue to expand since we are very good at serving our members, and due to the growing perception that we are sophisticated and capable financial institutions,” Thiess said. “As the cost of doing business becomes more and more significant, I believe credit unions will separate into those that specialize in certain products and services and those that offer a full array. Both will be successful in different ways.”
Cibuka also said that while the total number of Michigan credit unions will continue to shrink, many “will become very specialized” and be viewed by consumers as “the best at what they do.”
As the national and state economies bottom out and begin recovery, the impact of credit union efforts in important areas of public awareness and relationship building will continue to play a role as consumers remember who was reliable when times were tough. Nobody can anticipate exactly what will happen in the second decade of the 2000s, but the foundation has been laid for continued credit union success in Michigan.