I'll Gladly Pay You on Tuesday...

by Ron Daly 

...for clearing my bad check today! Has overdraft protection (aka courtesy pay) seen its last days? It started with a desire to help consumers when their accounts were overdrawn. Instead of returning a non-sufficient funds item and charging a return fee on each end, some institutions began paying the check and collecting a slightly higher fee. The consumer would then repay the financial institution when their next paycheck or deposit was made.

But, as is typical, the road to ruin is paved with good intentions. 

Larger banks saw the opportunity to let people drive themselves and their accounts into the red. Not only would the person be responsible for paying off all the money they'd spent (unknowingly, in some cases), they'd incur a fee for every debit on their account. Bank of America was recently raked over the coals for paying the higher dollar amounts first so that more of the smaller transactions would incur the $35 fee, According to the Associated Press, consumers pay as much as $17.5 billion every year in overdraft fees. consumers pay as much as $17.5 billion every year in overdraft fees.

We've Got our Very Own Goldmine!

by Ron Daly 

I don't have a Rolodex. I used to, but that was before it got cumbersome and Bill Gates put a contact program in whatever version of MS Outlook I'm using. For you Gen-Y folks, a Rolodex used to be the "big thing" and the thing to have if you were a businessperson. The little cards full of names that you kept on your desk so you could make calls and make deals were invaluable. They were worth a lot and salesmen were often hired based on their Rolodex, the information contained in them and who they knew. 

Guest Author Paul Lucas: Hard Knocks - BIG Lessons

Paul J Lucas, national marketing and branding consultant and frequent CU Journal contributor, wanted to share some thoughts on brand management for credit unions. Visit Paul's website at pauljlucas.com,email at paul@pauljlucas.com or call (202) 320 5759 to learn more.

Hard Knocks - BIG Lessons

Late this summer HBO aired this year's "Hard Knocks" show about the Cincinnati Bengals National Football League training camp. Watching the series it became apparent that the basic building blocks of a winning team are universal - whether you’re on the football field, growing a company or building a successful credit union brand. 

David Levitin, a neuroscientist and author of "This is your brain on music" estimates that it requires 10,000 hours of practice to master any craft. Studies of professionals from composers, to NBA players, to ice skaters show that it takes roughly three hours of practice a day, 20 hours a week, for 10 years to achieve the level of expertise we associate with world class. The next time you're tempted to think a top athlete was born lucky think about all the hard work it took to turn luck and talent into success. 

Remember the old joke: one man stops another man on the street to ask, "How do you get to Carnegie Hall?" The other man answers, "Practice, practice, practice." As managers it's much easier and a lot more fun to fall in love with hot new ideas than to keep slogging away at the same old basics day after day. The challenge is that those new ideas won't start yielding results until they become those old basics you keep slogging away at. 

A successful organization is seldom built on innovation. Watching the Bengals prepare for the upcoming season I identified eight critical elements in their quest to become a winning team: 

The President vs Spongebob: What are we doing here?

by Ron Daly 

President Obama is speaking to school children today not too far from our DigitalMailer offices. I know this because not only is it on the news, I had to get a fistful of letters and emails from my daughter's school administrators all about the speech and the syntax and the vocabulary and whether or not it's "age appropriate". It’s going to b tape delayed and shown at 3 pm. And, if you're a real jerk, you can send your kids to the library for a special viewing of Spongebob Squarepants' feature film or something like that.  

Are you kidding me?  

Read the speech for yourself at this link (click here). President Obama is not conducting a "sex ed" seminar. There shouldn't be an "opt out" for this, this is a speech from the President of the United States. If you're wondering why anyone cares, go ahead and read the second half of that last sentence. It's the President! He's trying to encourage kids to stay in school which in the long run increases our country’s chance at a better future. 

Now my question - is this what's right with this country or what's wrong with it? Granted, we are not in Iran where the losers of the last election are hiding in caves in fear for their lives. Yes, as an American, you have the right to question your government and complain about said government. But a talk to the school age children across America? Did we do this to JFK or Reagan? (click here). We’ll never get this country back on track without finding a way to work together. 

It’s the President of the United States of America...Rant over. Back to CU news tomorrow.

Duh of the Week: I-R-O-N-Y

by Ron Daly 

Irony. It's the soul of a good joke or a turn of phrase. It's hard to define, but the kind of irony we're talking about today is the kind that comes from expecting one thing and getting another...or maybe the same thing in a different way. 

See, the NCUA posted a fraud alert Tuesday of last week about a letter that had reached a credit union bearing the NCUA logo and bearing the signature of Michael Fryzel (read that fraud alert here). The alert told CUs to be on the lookout for similar letters bundled with a set of compact discs, and told them to disregard said letter and not to put the disks into any of the computers. 

Then, on Friday of last week, this came through (read the fraud alert update here). 

From the release:

As part of an an internal "system penetration" test, a credit union created a facsimile of an NCUA Fraud Alert. This was an unauthorized and improper use of the NCUA logo, and also included a falsified signature of then-Chairman Michael Fryzel. The bogus alert was forwarded to NCUA, prompting the issuance of the August 25 Fraud Alert. The false Fraud Alert appears to be confined to that credit union, and is not wide-spread.

D'oh! 

Turns out, the CU that got "frauded" was "frauding" itself. The false alert set off a real alert. Can you spell "irony"? 

I'm sure that in the future, whichever CU it was will be using some fake agency name and not the NCUA. Good to know, of course, that the NCUA is willing to post alerts and follow up on them (they even have an RSS feed of news, which is handy). Here's hoping our "Duh of the Week" award will be a reminder to all CUs to keep an eye on their fraud drills - and avoid irony. 

Come Together?

by Ron Daly 

As if we didn't already have enough disruptions in the credit union industry, it was announced last week that CUNA President Dan Mica would be stepping down from his position effective January 2011 (click here for the CU Journal article). I for one am glad there's time for CUNA to vet a new leader and that Mica isn't leaving the association in the lurch. A section of Mica's resignation announcement: 

"My mentor, the late Rep. Paul Rogers, often said an individual should spend no more than 10 years in any particular role or position," Mica, who is in his 13th year at the CUNA helm, said in a prepared statement. "I followed that advice as a congressional staff member, as a member of Congress and in my position prior to CUNA. I love what I do here at CUNA, and I deeply care about the credit union movement - so I have stayed a bit longer than Paul's advice would allow."

Graceful and appreciative of the movement, the announcement said what Mica needed to say.

...Ok, what now? 

Some folks are saying that this certainly presents an interesting opportunity in a sea of change and it could be the perfect time to talk merger of the two trade associations (click here to read). With Mica stepping down, why not start talking consolidation between CUNA and NAFCU? Instead of:

• paying dues to one trade group or another (or both, in some cases) 
• having two CEOs making millions each (read about Mica's paycheck here), 
• Duplicate staffs, compliance and conferences; 
• and Duplicate efforts on the hill,  

why not consider paying dues to one and have a singular voice in Washington?   

I am by no means and expert on this or the value each trade provides to their credit unions. 

So, my question to you:  

Should the industry press for a single trade organization in anticipation of Mica's departure? 

Tell us your thoughts in our comments section.