Passing the Buck

by Ron Daly 

Wonder why the largest banks in America continue to post profits during these trying times? It’s because they are great at passing the buck (or the bill) on to consumers and small business owners alike. While we were all focusing on the Credit Card Act of 2009 the past few weeks, a story came out on how some banks are sending bailout bills to biz customers (click here).To summarize...

In May, the Federal Deposit Insurance Corp. (FDIC) assessed the nation's banks $5.6 billion to restock its insurance fund after costly bank failures, reported Dow Jones News Service (July 29). It was noted that JPMorgan Chase & Co. paid $675 million out of second-quarter earnings and Wells Fargo & Co. paid $565 million. "But those two banks, along with many others, are passing their FDIC bills to some business customers," the article said. Other banks are burying the cost in the compensating balances at they are requiring business accounts to have in their accounts. 

 Looks like another great opportunity for credit unions to outshine banks when it comes to business banking. Small businesses can’t get the working capital they need to grow and they are getting slammed by fees and poor service. 

How can the CU industry simplify business banking and take advantage of the ill will small business owners have? Are CUSOs like the one in the news this week (click to read about Small Business America), which offers member business loans, deposits and other services to small businesses the answer? 

The questions that linger in my mind as small business owner and loyal credit union fan - Why do credit unions continue to sit on the sidelines when opportunities present themselves? And, for those CUs in the game - Why do we make it so hard for business owners to use credit unions?

Free Money – Well, Sort Of

by Ron Daly

Just returned from a family vacation at the beach and wanted to share a "Free Money" story. Like most families on vacation, I quickly ran out of the cash in my pocket and needed to hit an ATM. While sitting in beach traffic one afternoon I tossed my iPhone to my wife and asked her to see if there were any credit unions in the area. Figured if I was going to pay an ATM fee to get some cash I might as well keep it in the CU Industry (yes, I bleed credit unions!) 

Better yet, I asked her to go to our Credit Union’s Free ATM locator (NWFCU.org) on their site in Northern Virginia and see if there were any surcharge- free ATMs we could use. She plugged in the zip code of the traffic light we were sitting at and bingo. We found that within three blocks of our hotel was my new friend Carolina Trust FCU. 

Their free ATM saved us about $10 in ATM fees over the course of the week. In a few short minutes we found free money offered by a credit union. Americans spend approximately $10 Billion a year in ATM transaction fees. WHAT CAN YOU GET TO BUILD THIS OUT? 

Think of all the money we could save our members if we educate them on finding and using surcharge-free ATMs. Think how aggravated the banks would be if no one used their machines and paid them the $2-$3 per transaction they earn. 

I don’t know which one is better!

Playing "Monopoly" against the Banker

by Ron Daly 

Had a weird dream the other night. I was playing "Monopoly", the board game, and I was doing okay. Had a few properties, avoided jail, picked up a railroad. But suddenly, the banker was making a huge swath of purchases. Hotels went up everywhere, prices skyrocketed, you couldn't even roll without some kind of tax befalling you. The banker was just like the Monopoly Man ("Rich Uncle Moneybags" is his name, so I'm told), but he had on Uncle Sam garb. The game wasn't just not fun, it was frustrating. 

What a weird dream. Too bad it's coming true. 

Yes, we've been over this. The USPS is bleeding money and can't jack up rates in a way that's going to offset losses, so it's had to remove any number of mailboxes and shut down a number of POs to keep up. Saturday delivery being cancelled is also still in talks, which will really put a crimp in things for direct mail marketers or people who really DO rely on the mail for their business to run.

Duh of the Week: The Best Idea...EVER.

by Ron Daly 

Giveaways. Back in the day, giveaways were the thing to have. Free toaster with a $30 deposit? Remember that? The finance industry knew its market, people that were saving for niceties could get them for free by becoming an investor or a member. I've seen some creative ones recently that are a little less needs-based, like emergency car kits, radios, t-shirts, gift certificates...the list goes on.

But recently, we've been falling down. We need to step it up a little, enter the 21st century. Who wants a crummy toaster? Who wants toast, come to think of it? It's just bread that hurts your mouth. 

Let's talk this through. What do you give away in a state with a very high average rainfall, little sunshine, and a 9.2% unemployment rate...like Washington State, for example, that would make people happy and help them forget all their troubles?

Well, if you're anything like this Harley dealer, a gun. 

Yep, Eastside Harley-Davidson is giving away a gun with the purchase of a new Harley (click here for the news story). 

I'm not the President. I don't know what this country "needs". But I DO know one thing - we need to learn from these folks and get on that same boat. "Every member that joins gets a hand grenade and a ski mask", maybe? I'll tell you right now, that's a member enrollment campaign that's gonna win some awards. 

In all seriousness, no, I can't see where giving away a handgun and a Harley is wise. Maybe Eastside felt the same way? They had a fun video to go along with their promotion, but they've taken it off of YouTube. They posited that people who took advantage of the offer would still be subject to background checks, the same procedures they'd go through if they were buying a handgun from a gun store. Still, there's no lawyer in the world who's going to say that "free gun with purchase" is a good idea. Maybe they talked themselves out of it. 

Enjoy the DotW, Eastside. Check the mail for your complimentary copy of Have Gun, Will Travel (Sorry, had to work that joke in there somewhere.)

Dear Deborah!

by Ron Daly

Last week, The Senate Banking Committee voted on the nomination of Deborah Matz to the NCUA board [click here for the CU Journal article]. Expected to go to vote either this week or early next week, this got me wondering: If you had her ear, what would you tell Deborah before her first day back on the NCUA board? 

Yesterday I ran across this page, sponsored by CU Rising, where you can do just that.

Some of the List of Messages for Deborah Matz -

• Please be a passionate leader for the credit union movement and its' members. More than anything we need someone who will be open and honest, a good communicator.

• You come into this position at what I consider to be a major turning point for credit unions. We are faced with the opportunity to make huge differences for consumers at a time when they are in greatest need, but quite honestly, the recent actions of the NCUA and their lack of transparency stand in our way to realize the potential of this opportunity.

Post a message if you feel inclined. I have a strange feeling that they will get to her if she’s not on the site’s Twitter already.

To follow CU Rising on Twitter, go to http://twitter.com/CU_Rising. If you're already on Twitter and want to send a message to Deborah, use the hashtag #deardeborah.

The World's Largest Demolition Derby

AKA - Cash for Clunkers - You know, it figures that just when I've finally convinced myself to take my old Nissan pickup truck in and take advantage of the new CARS program, they'd run out of money. It finally made sense to me when I did the math that I could get $9,000 on a Chrysler vehicle for the truck that I spent $11,000 on a lifetime ago. I was slowed down trying to figure out how my in-laws and neighbors were going to get mulch and make landfill runs in that new convertible Sebring my daughter had her eyes on (you truck owners know what I'm talking about).

C.A.R.S is a typical good news/bad news program. The good news is that "Cash for Clunkers" was/is a success. People across the country leapt at the opportunity to trade in their old cars for newer, more fuel efficient models. Mission accomplished! 

The bad news... "Cash for Clunkers" was/is a success.