People Are Lending Directly to One Another…So What Are We Doing Here?

by Ron Daly 

Today on CreditUnions.com, I was drawn to an article titled "Beyond the Home Loan: What can credit unions learn from online crowdfunding platforms?" [Here's the Full Article.]

While the article doesn't spell out the overall lessons, there are a handful of examples. Good enough, I suppose, because it got me thinking - what are we missing? 

Credit unions, as best I understand them (and after 30+ years in the business, I can honeslty say I do), were created to give members a way to lend to and borrow from one another. They were created as an alternative to the system. Now, for consumers, it seems like we're just another part of that "system". 

Bank customers and credit union members know that good loans go to good paper. If you're trying to buy a home or a car and you have a good credit score, you won't need to look for too long to get what you need. But if what you're trying to do is create a movie about Linotype machines or start a small business selling weirdly-shaped candles, you'll likely go wanting. And for the people who have rough credit, quick, high-interest loans with fewer strings mean more than "relationships" with a bank or credit union. 

As far as peer-to-peer finance and technology goes, you're crazy if you don't go read "A Game of Leapfrog" by Brent Dixon. 

From the article, originally published on the CU Watercooler: 

But meanwhile, many credit unions still don't even offer online account opening. We're saddled by regulations. We're a weighty, slow-moving beast. We make excuses.

Consumer finance is not just begging for disruption, it's experiencing it. In a few short years, many traditional institutions will be passed over. Leapfrogged. It's easier to build than reform, and people are building.

So, what can credit unions learn from peer-to-peer finance today?

1. Time to Re-evaluate the "People Helping People" Message -
   
   Everyone I talk to in the industry loves that phrase, but how many credit unions are interested in the proof of it? When a person lends to Kickstarter, they get a "thank you" in the form of a gift - maybe a version of the product the borrower is developing or a branded package of swag with the up-and-coming product or company logo. What's the "thank you" gift new members get at your credit union? A letter? A free pen? 
   
   Better yet, where are the booklets and brochures with member success stories? Show me the story of a member who joined and went from broke to flush thanks to the credit union. Show me the small businesses that have benefited from the CU's guidance. Those stories have got to be there. Otherwise, my fees and interest are going toward nothing, as far as I can tell.
   
   
2.  Partner Big, Lend Small - 
   
   According to the CreditUnions.com article above, services such as Kiva and Fundly use proven tech platforms like Paypal and Amazon to process payments and securely move money to and from borrowers and lenders.  Why can't credit unions partner with tech providers for everything they need - better online banking and account opening, smart phone apps, tracking of the loan process, etc.?
   
   It's not that they can't, it's typically that they won't...or don't want to. Even when vendors provide all the due-dilligence and proven testimonials and case studies, credit unions will still look for ways to doubt results. Who does that help? Not the member, certainly, and not the loan portfolio.
   
   And look at the amounts certain people are requesting - $300? $500? They'll go to a payday lender before they walk through your front door, how is that a good thing? It's not because the money isn't expensive - the rates on these small, short-term loans are outrageous. But people see fewer barriers to entry. They don't know they're walking into a trap. Shouldn't being more accessible be a goal for every credit union?
   
   
3.  Never Turn Away From Your Social Missions - 
   
   People value charity, philanthropy, benevolence - not because they're "trendy", but because they're the right thing to do. We know hundreds of credit unions that partner with great causes but rarely explain the depth and their level of involvement. Why shy away from talking about things like Credit Unions for Kids? Share the good news with more than just a parting shot in your newsletter - make it a cause that you champion, not just "support".
   
   
4.  Play the Game, But Play to Win -
   
   Sure, LendingClub and Prosper.com are growing enterprises. But are they human enterprises?  Can they really lend and handle deposits the way you can? Are those prepay debit cards celebrities seem to love so much really a better alternative? The answer to all three of those questions is "no". 
   
   You can provide deposit insurance. You can provide security. You can provide convenience. You can do it all and, if you do it well, you can show everyone that you're not "just another bank" - you were facilitating "peer-to-peer" before it was cool. And you're still here now.
   
   

It's not just lending that's being overtaken by "the people" - it's debt forgiveness, too. The Rolling Jubilee raised half a million dollars, bought up thousands and thousands of dollars of debt from banks, and forgave it. These "gifts of forgiveness" went out to average consumers, bogged down by medical or educational debt, and told them their debt was forgiven in its entirety. 

Your average consumer now knows that there are multiple ways to manage one's money - there's the bank, there's the credit union, or there's "none of the above". 

We USED to be the way people loaned money to one another...now, we're a hinderance. We get our "people helping people" status back by being adaptable, affordable, approachable, and dependable. 

Let's get to it.

 

Who Are the People in Your Neighborhood? Four Good Ideas for Getting Locally Known

by Ron Daly 

[image via the Muppet Wiki]

It's time for you to take down that big, scary, Lex Luthor-esque map of the world you have in your office. You know, the one with all the big push-pins in it showing how you're going to take over the world?

If you're reading this, you're a credit union person. Global domination should be off your agenda. Why?

1. It's a tad bit frightening and we're not necessarily a terrifying bunch.
2. It's impractical
3. It's improbable

I've seen credit unions with extra-inclusive fields of membership. I've seen credit unions that have branches in far-flung corners of the globe. But let's be realistic - where are you?

Where Are You? 

It's a big question. For years, we were trying to puff ourselves up to seem big and impressive. Now, we need to recognize that "local" isn't a bad thing - it might be our saving grace. 

Many CUs are repositioning at this moment, trying to remind locals that they have alternatives to their community banks and the big banks. "If you live, work, or worship..." covers a lot of ground, so get out there and show people what you're doing in, and for, that area. 

How? Here are four "good start" ideas: 

Guest Author Marvin Umholtz: Stop Feeding the Strategic Crocodiles Snapping at CU Heels

The following strategy-focused overview candidly dissects the challenges and risks that are dangerously snapping crocodile-like at the heels of credit union leaders.  The mere fact that there is so much change going on and so much change that could go on in the 2012 to 2013 timeframe makes credit union’s reluctant to take major strategic steps when significant energy and resources might be demanded to manage through these unprecedented challenges.  Although potentially unsettling for those who like easy answers, this overview’s’ fundamental premise is that today’s credit union leaders must thoroughly understand what they are up against and mitigate it.  Credit unions aren’t paranoid if malignant forces are truly out to get them!  Use this overview as a discussion-starter at the next Management Team or Board of Directors meeting. 

Strategic Macro-Trends Affecting 2012:

• Today’s political, legislative, and regulatory risks far exceed the traditional operating risks – credit, interest rate, liquidity, transaction, compliance, strategic, and reputation.  The crushing regulatory burden exacerbated by compliance’s escalating cumulative complexity now drags on the credit union business model and threatens its future viability. 
  
  
•  The polarized Congress and the gridlocked legislative environment that results cause strategic uncertainty in financial services regulation, mortgage finance, and the economic recovery.  The November 6, 2012 elections could lead to a massive macro-directional overhaul of the federalgovernment.  That added ideologicaluncertainty makes scenario planning and financial modeling difficult at best – perhaps impossible. 
  
  
• Many credit union officials claim that the National Credit Union Administration (NCUA) Board has been relentless in imposing its interventionist agenda on credit union decision-makers.  On a regular basis the NCUA Board demonstrates through its policy directives, supervisory edicts, rulemaking, and enforcement actions that its priorities too often stray from an emphasis on safety and soundness toward micro-management and counter-productive social engineering.  However, the biggest burning question – How much is the corporate credit union crisis resolution going to ultimately cost? – remains unanswered.
  
  
• In addition to its own pre-disposition to re-regulate credit unions, the NCUA is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Consumer Financial Protection Bureau’s(CFPB) statutory mission to examine for and enforce additional complex and costly requirements on credit unions.  The NCUA is destined to become a branch office of the marketplace-controlling CFPB enforcing a “level playing field” of fewer consumer choices and limited credit availability.
  
  
• The global economic situation has not been this troubled in decades.  The U.S. Federal Reserve System Board of Governors has promised to keep interest rates at unprecedented lows through 2014.  Only slight improvements are expected in overall economic growth and employment over the next several years.  Consumers will continue to focus on deleveraging their debt and limiting their spending.  The federal debt continues to grow and the political inability to deal with demographically unsustainable entitlement programs embeds more uncertainty into the fiscal dynamic.  The wearying margin-less economic situation obstinately refuses to go away.
  
  
• Additional strategic hot topics: net worth expectations, capital access, deposit insurance reform, moral hazard, too-big-to-fail, systemic risk, loan portfolio mix risks, charter conversions, prepaid cards, consumer activist groups, financial literacy, credit union service organizations, participation loans, partisan political polarization, and many specific credit union-identified hot topics.  
  
  

Key 2012 Strategic Takeaways:

1.     Fundamentally Different Decade Ahead.  The next decade will be fundamentally different – economically, competitively, demographically, culturally, and politically – from the preceding decade.  Using the same strategic approach to the financial services marketplace as in the past would be insane.  The economy in particular is expected to inch its way along impeding everyone’s business plan.  To keep the credit union’s metaphoric head above water, its leaders must fully understand the prevailing undercurrents that radically impact on strategy.

2.     External Risks > Internal Risks.  External risk factors – especially political risk, regulatory risk, and complexity risk – will have more impact on a credit union’s strategic success than will internal factors.  What one does not control will exceed what can be controlled.  Get used to it – uncertainty and how well it gets incorporated into strategy is critical to a credit union’s successful operation.

3.     Federal Government Not Friend.  The Congress, the National Credit Union Administration Board, the Consumer Financial Protection Bureau, and the Federal Reserve Board have their own political agendas and are not a credit union’s friends.  Don’t let them fool anyone into thinking otherwise.  Instead, expect them to keep making things more difficult.  Treat their increasingly costly, complex, and burdensome demands with deference – but validate, verify, and when appropriate challenge their directives.

4.     Ultimate Stabilization Costs Unknown.  Regardless of whether the NCUA Board’s loss estimates for the corporate credit union legacy assets are realistic or not, the Board sets the Temporary Corporate Credit Union Stabilization Fund(TCCUSF) assessment based upon those estimates and they drive the credit union’s costs.  Nobody knows for certain how deep the multi-billion dollar TCCUSF hole really is or how long it will take to pay it off.  Plan for the worst, hope for the best.

5.     Industry Infrastructure Fractured.  As a direct result of the 2008 financial system meltdown, the current credit union industry’s legacy infrastructure – including its in loco parentis regulators, non-risk-rated deposit insurance regime, and even its traditional trade associations – are showing signs of rust and structural weakness.  Proactive demolition and reconstruction of these faltering institutions sans dogmatic platitudes, entrenchedoligarchies, and one-size-fits-all approaches could go a long way toward restoring real return on investment for each increasingly diverse and independent credit union.

6.     Heavy Mortgage Loan Mix Untenable.  In the absence of a serious refocus of lending strategies credit unions are at risk of becoming the next Savings and Loan debacle.  Collectively credit union loan portfolios are dangerously loaded with low-return fixed-rate mortgages.  Many credit unions also rely heavily on originating and selling to the secondary market that is currently in flux due to the conservatorship of Fannie Mae and Freddie Mac, the glaring absence of any private market investors, and Congressional proposals that could radically reduce the demand for mortgages.  It’s an accident waiting to happen that credit unions must anticipate and avoid.  

7.     Non-Bank Competition Toughest.  Big banks, community banks, thrifts, and even other credit unions are not a credit union’s biggest competitors.  Big box retailers, insurance companies, payday lenders, and other non-banks are running circles around traditional federally insured financial institutions and it will only get worse because most of the non-banks’ offerings are convenient, uncomplicated, and consumer-friendly.  Credit unions, and especially Congress and regulators, should learn from these competitors’ successes rather than try to stamp them out.

8.     Boomers & Seniors Rule, X & Y Drool.  Aging baby boomers constitute a major portion of credit union memberships and along with many seniors dominate credit union boards of directors.  Generations X, Y, and the very young will not be a credit union’s salvation in the near term no matter how hard they try to attract those smaller demographic cohorts.  Each credit union needs to find out what their existing baby boomer members want and find a way to profitably give it to them.  Neglecting boomers could be fatal to the institution’s bottom line.

9.     CU Business Model Threatened.  The traditional low-cost, high-service credit union business model seems increasingly at risk from its cumbersome governance structure, limited access to capital, reliance on loan and investment income, legacy modest means mission, innovation-killing hyper-regulation, and inadequate products and services authorities.  Credit unions desperately need additional ways to generate income, broaden service offerings, streamline delivery systems, and generate scalable growth.  The credit union business model will need to evolve in ways that will make the traditionalists uncomfortable, but the alternative is stagnation.  Credit union leaders must proactively advocate this business model evolution since it won’t be simply handed to them. 

10.  Urgency for Change.  Lead, follow, or get out of the way.  Credit union elected officials and management executives that are unwilling to be drivers of change should seek early retirement.  The future belongs to credit unions that are committed to and intensely involved in change.  A change management skill-set and a sense of urgency will be required if a credit union wants to emerge unscathed at theother end of the coming decade’s strategy-altering uncertainty-laden gauntlet.

 Have questions/comments for Marvin Umholtz? Leave them in the comment section below. 

Suze Orman gets into the prepaid card game -- and out of the good graces of the CU Industry?

by Ron Daly 

 Remember a while back when Suze Orman went to bat for the NCUA as an "educator"? She wanted to get the word out about how NCUA served the same function for CUs as the FDIC did for banks. A noble goal, and helpful for those who are confused about what all those letters mean on the bottoms of loan promos and direct mail pieces. It raised the question, "Is Suze Orman the right spokesperson for CUs?" 

Well, it's a false dilemma, really. See, Suze Orman wasn't hired to promote CREDIT UNIONS, she was hired to promote NCUA and their capacity as the insurer of cu deposits. But people read "Suze Orman" and "NCUA" and interpreted that as "Credit Union Spokeswoman".

Which is unfortunate, because Suze Orman just decided to set herself up as a prepaid card magnate. Click here to read about it on US News and World Report's website.

I really don't know how to make heads or tails of this. Sure, Suze Orman has a lot of brand equity, specifically with the "underbanked", but to lend that equity to a prepaid card? She's taken the road the Kardashian sisters weren't able to walk a little over a year ago; the only difference being that Orman actually seems to understand how money works and the Kardashians...well, the less said, the better.

An Associated Press story claims that the aim of the card - which Orman has (reportedly) already pumped $1 million of her own money into in development costs -  is to boost the credit scores of users through a deal with TransUnion. This new breed of credit score would reward users who previously paid for things with cash or other prepaid cards, but Business Insider doesn't seem to think so.

According to the PR Newswire press release, the card comes with "Suze Orman's advice and tips on personal finance," (which are delivered...how?) and is also "insured up to $250,000. The Bancorp Bank; Member FDIC". So, there's a bank involved somewhere along the line, but a few steps removed...

I guess the question is, has this move soured your opinion of Suze? Some of the choice tweets on the topic I read over yesterday and today: 

Yes, much has been made of the $3 monthly fee, which is actually low compared to cards like the Kardashian Kard. But a card that preaches better finance management while taking out $3/month to "cover costs"? Would "Pre-Card Suze Orman" approve of that? 

Ron Shevlin from the Aite Group always has great links and thoughtful reads on the topics of the day, and he found one by Ron Lieber in the Times. In it, Orman swears she won't be making much money on the card and certainly doesn't want to be making money off of the "99 percent's backs" (her words). She insists that if the rates increase dramatically, she'll kill off the product. But surely there's some reward for her, considering how much she's already invested...what is it?

This reaction is one of the more damning, in my opinion. Ondine Irving has worked with Suze Orman in the past to get the word out about credit union credit card programs and has been a pretty big Suze Orman "stumper". She's not happy with these new developments. I sense she won't be the only one. 

I'm eager to hear your comments on this in the comment section. 

 

The Unengaged Member- Whose fault is it? The Credit Union or the Member?

Reactivation and growth from unengaged members seems to be one of the hottest topics in credit union marketing circles. Why?

Most credit unions just received their annual report on member profitability. Executive Teams and Boards are staring at a section that lists the percentage of their members that are considered "unengaged" by the profitability model. From the clients we've talked to, the percentage is staggering - ranging between 20% and 30% of total members. To put that in perspective, if you are a 50,000 member credit union, you’ve got 10,000 to 15,000 of those members unengaged! 

So now the bigger debate - whose fault is it that most credit unions have a significant number of unengaged members? The member’s or the Credit Union’s? 

I recently found out that a colleague had gotten his last car loan indirectly from a credit union through his car dealer because it offered the lowest rate. He took the credit union up on the offer and put $5 in an account to get the loan. After the loan was paid off he became the typical “unengaged” member. When I asked him why he didn’t do more with the CU he replied "I heard from the CU once or twice over the course of the four years when they sent me a paper newsletter. As far as I’m concerned, it’s their job to let me know what products and services they could offer and they didn’t do a very good job." 

Key take-away, don't assume members know your product set as well as you do and that they all use the same communication channel.

Want to get engaged?

A recent article on the Bank Marketing Strategy Blog "Collecting Behavioral Insights Increases Value of Relationship" states that best-in-class financial organizations supplement traditional new account opening with an onboarding process that includes a short survey of needs and behaviors of the new customer. While this survey can also measure customer satisfaction with the new account opening experience, most banks focus on gathering insights into the reason for opening the new account, communication channel preferred, the financial goals of the customer and what financial services the new  customer holds elsewhere.

In addition, some banks ask questions to determine key life events that may be on the horizon and determine who in the household will be in charge of managing the new account. 

Forget whose fault it is!

 If you believe the saying that "It is cheaper to get an existing member to do more with you than it is to find a new member", then marketing should be focusing heavily on the unengaged number in their reports.

As Jim Marous points out in the Bank Marketing Strategy article:

A deeper knowledge of the customer's financial goals, channel preferences, product usage, preferred channels and reason for coming to your institution is needed to personalize the onboarding communication and move the customer from product engagement to relationship entrenchment.

Think about it, an unengaged member could be viewed as a new member that may not even know about all the products and services available to them. The same on-boarding email engines and surveys used to educate new members could be turned towards unengaged members to learn more about their original reason for joining the credit union, gather current financial needs and to introduce them to the benefits provided by the CU. Click here to see some actual onboarding examples from one of our clients.

Bring us your Tired, Poor and Unengaged.

 Technology offers a fast, inexpensive way to reach your unengaged members. We’ve built an online survey to see what we can learn from unengaged members to help credit unions just like yours. If you’ve got the list of unengaged members and can supply ones that you have email addresses for, we’ll supply the online survey and email engine to try and reach out to them. We’ll survey you members and provide you with the feedback. It’s FREE for the first ten credit unions that take advantage of the offer. Simply go to our Onboarding page and click "Ask for more info". We'll contact the first ten credit unions that apply and get them started.

Want to share your re-engagement strategy? Let us know about it in the comment section.

Adding Ads to Statements: Some Food for Thought

by Ron Daly 

I'm always surprised the kind of ads that show up while I'm "surfing" (is that still the word?) online. 

Sometimes, they're interesting. Sometimes, they're just awful. And sometimes, they relate to me on a personal level. 

Like LL Bean and other clothiers - they seed ads for their shirts and shoes into my daily browsing experiences. I'm usually buying those things online, so it's a tight fit, advertising-wise. 

But imagine if LL Bean read my credit union statements and saw what I was buying. What if they sent me personalized offers based on my spending habits. 

Imagine no more- it's a reality. Several companies do it, and do it very well. But as more attention is drawn, I begin to wonder: will the reaction of consumers be positive? 

The public is getting hip to the idea of in-statement/in-PFM ads. Check out this article from the Today show website: 

DUH OF THE WEEK : A 59% APR - Can Anyone Do Better?

by Ron Daly 

We know, you've been dying to know when it would return. And here it is - the Duh of the Week.

There's been a lot of talk about the 59.9% APR on the First Premier Bancard. Aside from it's already startling APR, there's teh fees - $30 per year for the first year, $45 for each year after, monthly service fee of $6.50/year and $35 on any late payments. Yowza. 

But what's more amazing to me is the number of people that have applied for the card - some 700,000 - and the number of people that are carrying a revolving balance. 

From CNN: 

And yet the customers keep coming. The company said it serves nearly 3 million customers nationwide and receives anywhere from 200,000 to 300,000 applications a month.

There is a huge -- and growing -- need for cards serving customers with "less than perfect credit," Beacom said. However, he added, the company is now more cautious due to the Card Act, so it is only opening about 50,000 accounts a month.

Oh, good...they're only opening about 50,000 accounts a month. Phew, I was worried. 

So, 700,000 accounts at $300 account limit with right around half carrying a revolving balance. And 200-300 thousand new applications per month. Holy. Cow. 

So, ready for the "Duh of the Week" award? It doesn't go to First Premier. According to the CARD Act, they're not doing anything illegal. According to business, they're cleaning up. Is a 60% APR disgusting? Yeah. But there's *technically* nothing wrong here. 

Is the "Duh of the Week" going to the number of people applying for this card? No. You can't blame the people that feel like they have no alternatives because of poor credit. They'll latch onto anything that's presented as "an easy". 

The DotW award goes to the credit unions that aren't marketing a rate that's even a little better than this. Sure, you have to take risk into account, but maybe you could throw folks a card with a thirty percent APR? Even forty? Come on, people - this is supposed to be a part of our model. Let's come up with the kind of card that makes sharky rates like these obsolete. Even better, let's come up with the kind of public relations tactics that make our best practices and fair lending a piece of common knowledge. 

The New "Da Vinci Code": Credit Card Agreements

by Ron Daly 

If Dan Brown, author of The Da Vinci Code, needs some brain food for his next book about little-understood ancient texts, he should look no further than credit card agreements. I understand the language in these things for the most part, but for some of them it STILL feels like I'd need an entire library, the Mona Lisa and Tom Hanks to help me figure it out. 

I bring it up because of this article from Reuters, "Trying to Read Credit Card Agreements" by Felix Salmon. An interesting read with a lot of interesting findings. From the article: 

How long will it take to get readable credit-card contracts? My guess is somewhere in 2012, if we’re lucky. Right now, although we’re moving in the right direction, we’re also moving far too slowly...

And of course there’s no point in reading this kind of thing: I doubt one cardholder in a hundred could even begin to say what it means to “honor claims of privilege recognized at law.” I certainly couldn’t.

According to this article, four out of five adults don't have the reading skills to understand the wording in these things. And fifteen pages long? People these days can't be bothered to read the expiration date on milk.

So, what's the solve here? How can we make this information clear, concise, and easy for anyone to understand? 

I have some thoughts based on some hot trends in information sharing. 

1) A YouTube Video

Pros: People can watch a video of their agreement terms rather than having to parse text; you can have audio AND video, which means you can highlight the points you really want to hit with dramatic music and text.

Cons: The stupid comments; The idea that if you're going to make a YouTube video it has to be "funky" and "Gen-Y" (and yes, people are using Gen-Y as an adjective). 

2) Infographics

Pros: Turns tough-to-understand information into eye-catching graphs that are easy to understand.

Cons: The alternative to being too hard to read is being too simple to understand thoroughly; tough to take seriously, which people SHOULD do with a CC agreement.

3) "Twitter-izing"

To clarify: No, not a Twitter account of a CC agreement - instead, you'd make it so that no portion of the agreement was more than 200 characters or, say, thirty words.

Pros: Keeping it concise means people don't feel overwhelmed; would require that long passages be broken up into manageable chunks; tough to use a lot of "three-dollar words" when you're on that tight of a budget

Cons: See the section on Infographics. 

 

Clearly, there's not a great "social media" approach to credit card agreements. So what IS the answer? I think Anthony Demangone sums it up very well in his recap of the same article: 

What are you trying to say?  Once you know that, say it as clearly as possible.  There are times when we must use precise words or "legal terms of art."  Outside of those times, though, writing or disclosures should be clear and easy to understand.  Don't use 50-cent words when a nickel buys you exactly what you need. Don't force readers to choose between confusion and reaching for a dictionary.  And you should hire a monkey to slap you whenever you use any of the following terms in a document meant for general consumption: heretofore, whereas, or any Latin phrase.  

Hired-slapper-monkeys aside, this is an issue we'll need to address as a best practice before we're required  to address it as a regulation. Elizabeth Warren is already eyeing this topic (thanks again to Anthony for the link), so you'd better bet your boots it's going to be someone's headache at your CU. 

What steps are you taking to act on that bit of information? What steps have you already taken to make your CC agreements better? Who should members call to help with any misunderstandings about terms? Could any old employee help you take care of it? 

Leave your thoughts and feedback below. 

Interchange Fees and Credit Unions - Members Taking Action

by Ron Daly 

Interchange fees are the topic of many blog posts in the industry these days. Some posts are for changes, some are against, some are matter-of-fact and some are downright angry. One alarming article released yesterday says that 90% of yearly interchange revenue could be lost, which comes down to "$15 to $35 per debit card per year". 

CUNA has been pressing the issue in its daily News Now emails. Today's story deals with the Treasury and what Dan Mica called the "most serious threat" facing CUs at this moment in history. But it was a different story (and a different reaction by our company's clients) that caught my attention. 

Read this excerpt from the News Now article, "Grassroots interchange opposition, strong and growing":

WASHINGTON (6/2/10)--While the halls of Congress have emptied for the week, grassroots credit union advocacy regarding interchange legislation continues this week through both legislator-led town hall meetings and credit union activism on several fronts.

One of those fronts is a Credit Union National Association-backed effort to verbally and electronically reach out to representatives, and this communication effort resulted in over 80,000 individual contacts as of Tuesday.

CUNA is asking credit union backers to urge their legislators to oppose federal intervention into the current interchange rules. An amendment offered by Sen. Richard Durbin (D-Ill.) which was successfully added to the Senate's regulatory reform package would direct the Federal Reserve to issue regulations to govern interchange fees charged for debit card transactions. CUNA has recently said that this rule change forces the Fed into the role of a price-fixing body, when interchange fees should be driven by market forces.

State credit union leagues have also chipped in to back credit union concerns, and Virginia- and Louisiana-based credit union leagues are among those that have joined state-level small banking associations to publicly oppose federal interchange intervention.

Some examples of emails sent to members, compelling them to call and email their leaders and take action: 

From Horizons North Credit Union: 

 

From Shell Federal Credit Union: 

 

From Belvoir FCU : 

 

They're simple emails with a simple message: "Interchange is going to hurt the credit union. Contact your leaders now and tell them to act in our mutual best interest."

What does it cost you to send an email to your members? Hopefully, the answer is "not much". How much will interchange fee changes hurt your CU? The answer is probably "a lot". Risk versus reward, people. Members need to know about things like this and when it comes to asking them to do something as simple as sending an email, that's only about three minutes of their time. Never hurts to ask, right?

So, here's your million-dollar-question-of-the-week: What's your credit union doing to encourage calls and letters to legislators from members? Tell us about it in the comment section.