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107 posts categorized "Current Affairs"

July 23, 2013

Today's "Don't Tax My Credit Union" Tuesday: In the Rhetoric War, Can CUs Win?

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"Big Tuesdays" come along so rarely it's hard to remember the last one. Election Day? New Year's Day was on a Tuesday this year. Those are the two that come to mind, thus far in 2013. But according to CUNA, today is, indeed, a Big Tuesday. For today is "Don't Tax My Credit Union" Tuesday.

Don't Tax My Credit Union is CUNA's answer to an aggressive press-blitz by the ABA. Both sides are trying to sway the opinion of the public - CUNA wants members to speak up and for non-members to see that CUs are the "little guys", there to help communities and small businesses. The ABA wants the public to see credit unions as a bunch of tax cheats that are harming the economy and causing a budget shortfall.

I find it ironic that the ABA wants to paint credit unions' tax exemption as a harm to the national budget. Take a look at the ABA's "Tax Credit Unions" page:

Since 2001, credit unions have increased the deficit by not paying an estimated $20.5 billion in federal income taxes.

Wow! That's some bold text. And that's also a big dollar figure. But let's read that first part about "Since 2001". That roughs out to about $1.7 billion/year for the past twelve years.  B of A got $45 billion in bailout funds...more than double what credit unions have "not paid". What's more, B of A didn't pay any taxes in 2010 and has leveraged its many loopholes to avoid paying in the years that followed. And that's just one of the banks the ABA says isn't getting a fair deal because of the CU tax exemption. 

Is anyone else confused as to how you can pay no taxes, get a bailout, receive government subsidies, neglect small businesses and financial literacy...and complain that a group of FIs that makes up 6% of the market is hurting America?

Hold on, I'm going to go bang my head against a wall and see if it makes sense after that...

Nope, it's still a joke of a premise. And now, I have a headache. Thanks, Big Banks.

Two stories. One by credit unions, one by banks. The trillion-dollar question: who'll win out? Naturally, we'd all like to think that credit unions will protect their tax-exempt status. It shouldn't be discounted that CUNA and its credit unions are fighting a small-scale war against an organization with a warchest that is...well, larger than a lot of credit unions. Credit unions and their employees have picked up the charge, but a quick social search on the #DontTaxMyCU hashtag doesn't show a lot of average folks sharing the word...plenty of trade groups, leagues and CU accounts, but very few actual members. Do we still have a shot at getting the public on our side? 

We'd better be telling a compelling story. "We'll lose our advantage" is a bad argument to make. "We are here to help our people and boost small businesses - losing exemption will ruin both" is much better. If you have a great campaign related to Don't Tax My Credit Union, send it to CUNA so they might share. And if you care about credit unions, tell your friends, convince your family, and stand behind your CU's ability to serve your community.

Take action by contacting your legislators and telling them - "Don't Tax My Credit Union".

June 20, 2013

The Cooperative Trust Changes Hands - What Does That Mean for the Future? [Guest Author: Jimmy Marks]

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[Editor's Note: Ron's out today, so we're throwing it over to Jimmy Marks, DigitalMailer's Creative Media Director, to comment on this breaking development.]

For the first time in its history, The Cooperative Trust has undergone a leadership change. Brent Dixon, the organization's creator and, for want of a better term, "Motivational Shepherd", has stepped down. He will be replaced by James Marshall, a credit union employee from the UK and a participant in this year's Crash the GAC event.

James has worked for CUs in the UK and is currently in London, waiting (I'm told) to make his way to the US of A. He'll be working with Filene on next steps and a strategy for growth for the tiny gathering of industry-loving young folks which started out as no more than a handful of weary travelers in a DC-area hostel. 

I've met James. I like him a lot. I don't know that much will change in the day-to-day, but I can appreciate his desire to bring outside perspective and to further energize the base. I'm sorry that Brent won't be directly tangled up in the Cooperative Trust's various goings-on, but I also greatly doubt that Brent won't have a hand in the organization in some way.

Long story short: I think this is great news. It comes at a time when the continued success of the Trust's mission and vision depend on an involved, articulate, energetic individual. 

For as legitimized as the Cooperative Trust has become in the past few years, there are people in the industry who still only see a bunch of "kids". Trust members have been accused of being leeches, only showing up at industry events - like GAC, or the WOCCU conference, or the NCBA annual meeting - to eat free food, stuff bags with vendor swag and disrupt the goings on. As an "adjunct faculty" of the Trust*, I can tell you that this is a gross misconception. I can also tell you that plenty of people that accuse Crash participants of being ill-mannered cheapskates are more than willing to show up at Thunderpunch, turn up their noses, drink the free alcohol and leave without thanking their very gracious hosts.

But I digress.

The Cooperative Trust holds "Crash" events because there are many credit unions in America that have a loyal member base, a keen mission and vision, but very little in the way of a travel budget. Others still send board members and C-level execs (all of whom, to be fair, should go to events like GAC and league meetings), but don't send younger folks that could benefit from learning more about what makes this industry tick. And lest you believe that the Cooperative Trust was founded to serve ages 18-25, there are "Trustees" of all ages - they're mentors, they're advisers, they're peers - and they hold just about any position in the credit union you could dare think of, from the top of the org-chart all the way down.

I won't spend too much time speaking on behalf of the Cooperative Trust - James Marshall's out there doing his job right this second and he's more than happy to speak to you about the future. But If I could put a bow on the vision of the organization, it would be simply this...

"A change is gonna come."

I've been a member of and have worked with credit unions that have undergone leadership changes in the past few years. Very few of them go out hunting for replacements in the non-finance sector, and I don't think very many more go after bank execs to fill the need. Typically, credit union people replace credit union people. You might say that this causes more stagnation in the industry...if we can't get outside of our own hiring pool, how can we grow? 

We grow by creating a better class of "credit union people". People who are experienced. People who are passionate. People who believe that credit unions can serve the people they were founded to serve on their own terms. People who will keep the credit unions we have growing strong and will help buoy the industry. I think the mission of the Cooperative Trust has been to create that class of credit union person, through mentoring, through service, and through engagement. 

I think James Marshall's a good fit. And I think that, as long as the Cooperative Trust never loses site of its goal - to create the credit union leaders and innovators of the future - the industry will benefit from more of this "young blood".

Agree? Disagree? Let us hear about it in the comments.


* I'm not a full-fledged Trust member. I help out with events, do the odd blog post and assist the organization with the occasional project.

January 23, 2013

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

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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.

 

January 04, 2013

The First "Duh of the Week" of 2013 is One for the Record Books

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by Ron Daly 

Ever bite down on your tongue while you're eating a lemon? It's a double-whammy of pain. There's the acidic burn of the lemon juice and the "yow that smarts" of cutting your tongue with your teeth. The thought of it is enough to make you wince. 

It's one of those blunders that you could have avoided in a few different ways. For one, stop eating lemons, you weirdo. For two, chew more thoroughly. You've got no one to blame but yourself. 

The first "Duh of the Week" has a lot in common with this twofer of pain - it's something that could have been avoided and it's easily the stupidest combination of dumb ideas I've ever heard.

A Portland-area teen...

  1. drove home drunk from New Year's Eve, then 
  2. told everyone about it on Facebook.

What a dumb move. For starters, he drives home drunk (under-aged, mind you), hitting TWO PARKED CARS in the process. As if that wasn't enough of a bonehead move, he POSTED ABOUT IT ON FACEBOOK, complete with a little winky-face emoticon. 

If you have young people in your home, now's the time to have "the talk" with them.

  • Sit them down. 
  • Tell them you love them. 
  • Explain that if they need a ride, you'll come get them, no matter the situation.
  • Tell them they should never ride in a car with a drunk driver.

    And lastly...
  • Gently remind them how hard you're going to kick their butt if they ever do something this idiotic. 
Drunk driving kills people, and when it doesn't, it can cause untold damage of another kind. The last thing your kids should ever want to do is drink and drive, and the second-to-last thing they should ever want to do is brag about it on a social network

Kudos to the thoughtful Facebook followers who informed the police and got him booked for his idiotic crime. Maybe now, he'll be sending a status update: 

"In jail :( Not as fun as I though it would be..."

Are your employees behaving resposibly on social media? Is the person in charge of your Facebook account making the right decisions?  How sure can you be about all that? Time to start that long-awaited social media policy, maybe? Maybe employees can use "the talk", too.

Comments always welcome. Happy 2013 to everyone!

November 05, 2012

Election Day as a Deadline vs. a Holiday

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by Ron Daly 

November 6 is Election Day. We're positive that all of our readers are voting - they're all good citizens who are wise, engaged and informed - let's not focus on that. 

Let's look at the idea of Election Day itself. More and more, American citizens are voting early. According to the United States Elections Project, nearly 30 million americans have voted already. President Obama became the first president to vote early on October 25 of this year. Lines for early voting this weekend were hours long across the nation, especially in "battleground states" Ohio and Florida. 

I'm not going to dig down into politics, but I will say this: early voting is a good thing. Really, it is. 

We raise our children in our homes and in our schools to believe that the power to vote is an important power. Ideally, everyone who can vote will - but we know that doesn't always happen. I've more than once heard the excuse that "the line was too long at my polling place". What a crock! With early voting, you get plenty of time to vote and it's just as good as voting on the day. They'll even give you the sticker and you can wear it a full day (or even week) ahead of time.

It comes back to the idea of removing barriers to entry. Leaving people with fewer and fewer excuses means that if they miss out on the opportunity to vote, it's more likely to be their problem and not the system's problem. 

"Oh, the line's too long!" Well, go a few days early and there will BE no line...or a much shorter line than the line on Tuesday.

"I don't have any idea where I should go!" Google has an easy-to-use form that shows you where your polling place is - just go to Google and type in "vote" in the search bar, then enter your address. That's all it takes.

 

Screen shot 2012-11-05 at 11.54.04 AM
"I don't know if I'm registered to vote!" Virginia has a pretty good lookup system for your voter ID and pertinent information. I'm sure it varies state to state, but look for your state's board of elections website. 

Now, what does any of this have to do with credit unions?

It's up to you to reduce the barriers to entry. How easy is it to become a member at your credit union? How many hoops must a member jump through to get a new debit card when they lose it? What about the loan application process? Some things have to take a certain amount of paperwork and there's not much you can do to make it better, but why not make things easy where you can? 

As I write this, people are talking about the first anniversary of Bank Transfer Day and the 2.2 million new members CUs took in for 2011 (using CUNA's numbers there). Some think it's the best thing that ever happened to CUs, some think it didn't go as well as it could have. 

Why are we celebrating the first anniversary instead of going for a second round? Why don't we have a national deadline for the industry and encourage everyone to move their money every single year? Are we scared it won't work? That it will fail to impress the modern media the way the first one did? That there's not catalyst (like Bank of America's never-imposed $5 fee)? 

Why don't we have a bank transfer day every year, the way we have an election day...but stress to people how easy it is to move their money ahead of "the deadline"? And why don't we make absolutely sure that when we say it's easy to make the switch that it really is easy?

Vote to make things easy for the member. That's a real victory. 

We'd love to hear your thoughts in the comment section. Oh, and take your kids with you when you vote - they're allowed to go in with you and it teaches them a valuable lesson about democracy. 

September 06, 2012

The Crystal Ball: Will Fewer Credit Unions and More Technology Make a Better Industry?

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by Ron Daly 

If you don't spend a few coffee breaks each week reading The Financial Brand, you're doing yourself a disservice. Jeffry Pilcher, One-Man-Journalistic-Juggernaut, does a great job breaking down the industry from either side - banks, credit unions, and beyond. Best of all, there's really something for everybody. Finance folks? Check. Marketers? Check. Fortune tellers? 

...wait, fortune tellers

Jeffry Pilcher has spent this past week showing us a glimpse of the future...and it might be a little scary for some. 

One article that's turned a lot of heads is "Credit Union Industry Outlook: 5 Years Back, 20 Years Forward". In it, Pilcher predicts that, at the current rate of retraction/"asset shift", half of all credit unions around today will be gone by 2032. The smaller credit unions are dying, hemorrhaging members and losing assets year after year. The larger credit unions keep growing, grabbing up new members and more assets and swallowing smaller credit unions. The bright side? Credit unions will continue to add members AND assets, growing into a stronger, if much smaller, force. Branch growth is slowing for the big guys, and is actually negative for smaller credit unions. 

Now, anyone can tell you the future is tricky to pin down, especially on only five years of evidence. But the reasoning behind Pilcher's prediction is strong and it's not impossible to imagine the industry going this way. Not disappearing, mind you - this isn't any indication that credit unions are dying/are dead. But things aren't looking great for "the little guy". 

I'm not a biologist, but I'm reminded of one of the important parts of evolutionary theory - "only the strong survive". It stands to reason that credit unions with billions in assets will be well set for the next two decades, but what of those with "just enough"? How will credit unions with only a few hundred million (or much less) keep their edge? 

Pilcher's second hum-dinger article of the week, "Killer Online Services Can Level The Playing Field For Smaller Institutions", talks about the relationships people have with smaller institutions versus the "big banks". The trade-off used to be convenience for high-quality service. The game changer, according to this article, is great online banking. The study mentioned in the article shows that online banking penetration for the CUs studied is 73% and that 85%  members surveyed rate their OLB experience as "excellent". 

Recall the first article mentioned in this post. If branches aren't practical to build and members are willing to do most of their banking online, shouldn't you have a virtual branch that really screams? Yes, yes you should. I've been saying as much for years.  

It's nice to hear someone else singing the same tune. Tim Bunch of CapEd FCU wrote a great guest piece on the Financial Brand about turning your online branch (mobile, browser, et. al) into your flagship branch. It's a brilliant article, written by a person who knows what they're talking about in the realm of online development because, hey, he's doing it first hand. His take:

Sadly, online banking doesn’t get the same internal treatment as a physical branch. It’s often something that we like to “set and forget”. It tends to be viewed as an inanimate object. We think of it like a hammer. When our members want to use this hammer, they pick it up and hammer away. But in reality, online banking has so much more potential. We need to stop thinking of it as a tool, and start thinking of it as a branch. Then, add the tools needed to make it an effective branch.

Some of the things Bunch thinks are critical in making the best online branch possible:

  • Pre-filled loan applications
  • Targeted marketing
  • Easy account management/PFM

If I can add a few of my own?

  • Switch kits that actually handle all the action of switching 
  • Single sign-on to other services
  • Wealth management tools/secure document storage and management

The crystal ball always shows a murky picture. It might be that more credit unions survive than predicted, it might be fewer. But what will all the survivors have in common? I'm betting they'll all have a strong focus on mobile and online convenience, a few helpful branches and a commitment to helping their members for the long run. 

Got an insight? Leave it for us in the comment section. 

July 10, 2012

They'd Like to Leave, You'd Like to Have Them…Technology's the Bridge

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by Ron Daly

When we started this blog, we wanted to call it "CU Soapbox" because it was meant to be a place to stand up and shout about the industry. I've been doing a little "shouting" recently and I thought I'd make it a point to do the same on this blog, because hey, this is the right place, isn't it? 

I've done a little reading about a recent Javelin study about big-bank customers and why they want to make the switch to another FI...but don't. The Financial Brand does a great job of making all this digestible and points out one very important piece of information: 40% of surveyed consumers WON'T LEAVE their big bank because of that bank's online/mobile banking service. Do they want to leave? Yes, of course they do. Who wouldn't? Getting beaten by fees and losing a ton of money that you could hang on to would make anyone want to leave...what keeps them hanging on is the illusion of convenience. 

I say "illusion" because the kind of technology that would bend the bow in credit unions' favor is out there, and it can be had. We could be courting these on-the-fence big bank customers and their billions in collected assets. Why aren't we? 

I believe there are two problems:

  1. We're not promoting the technology/convenience we have and already offer, and
  2. We're not positioning ourselves to bring in the technology that levels the playing field. 

 I wrote two articles recently that sum up my thoughts on the topic. Go read: 

Then, start asking yourself the four major questions that need to be answered, and fast:

Question 1: "Are our current members utilizing the online services we offer, and if not, why?"

The best and easiest research to conduct for yourself is on your own member base. If you have 10,000 members and only 1,000 are using online banking, what could be done to get more people to sign up and start using it? Maybe they already did and it was such an excruciating experience that they swore off of it (I can't imagine that happening, but who knows?). What can you do to make it right?

Question 2: "Is our website (or OLB/mobile app/email newsletter/social media feed) everything it should be?"

Websites need updates and overhauls. It comes with the territory. Marketing hates to hear that they have to write new copy and make new graphics and IT hates the hassle of creating and implementing sweeping changes. I have two words for both: tough toenails. If the site needs a face lift, give it one. If it needs a total reboot, give it one. Make it easy for interested outsiders (and undereducated insiders) to get all the information they need.

Question 3: "What next-generation technology would best suit our members?"

Audience is everything. If you serve a member base that's always on the move (military, air travel industry, etc.), why not include remote deposit capture and a smartphone app? If you serve a large area that's tough to reach on foot, more drive-thru ATMs make sense, don't they? Don't just throw everything at the wall and see what sticks...make an informed decision for the member.

Question 4: "Who's in charge?"

So often, technological advances and purcahses are made without clear goals in mind, or anyone to enforce them. Set expectations and meet them. It's not difficult and it means there's a person driving these endeavors from the inside. 

Final Thought

Did you ever hear the riddle about the frog in the well? 

A frog falls into a well, 20 feet deep. Every morning, he wakes up and hops three feet up the side of the well. Every evening, he falls asleep and slides back two feet. How many days does it take him to get out of the well? 

The answer: Considering he jumps three feet every day and falls two feet each night, it would take him eighteen days to get within three feet of the top. Then, on the nineteenth day, he'd jump three feet and clear the well. So simple it's complicated, right? 

Let's put a CU-spin on this. If a credit union gains ten members a month and loses nine by the end of the month, how long will it take that credit union to compete with Bank of America in terms of sheer numbers? 

The answer: You can't compete with BofA on locations. You can't compete on "number of members vs. number of customers". Their product offering is too abundant, their reach is too wide and too far. Where you can compete is on an emotional level -making a lasting impact on your member. You can also compete on member service. You can also compete on rates. You can even compete on technology...provided you're willing to make it happen. 

Start jumping.

May 10, 2012

How Often Does "Co-Op" Come Up?

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by Ron Daly 

I was at a meeting the other night where Randy Smith from CUinsight was the speaker. He was talking about the importance of local relevance and community building for CUs. One of the things he brought up was the idea of the credit union as a cooperative. With more and more people buying into the idea of a local economy, why not talk up your virtues as a cooperative institution? After all, you're likely serving a certain small area in your state...you're as local as money gets. 

2012 is the International Co-Operative Association's  Year of the Co-Operative. I've read a lot about this in the trades and I've heard a lot about it from the "Net-Set" (my nickname for social media savvy CU folks). But as a credit union member? I haven't heard that much about it. I only know what I've gone out of my way to find out. 

I've tried to look at this from two sides, as I do with most topics here. One part of me says this is a worthwhile talking point. The conversation about what "membership" is takes a while, but the kind of folks that buy Community Supported Agriculture (CSA) shares and shop at farmer's markets are already keen to this concept. What would stop an enterprising credit union from setting up outside a farmer's market, or even better, HOSTING a farmer's market at your branch (parking lot permitting, of course)? Why not talk to a crowd that you know will listen? 

The other side of this seems to be a perception issue. If you talk about how "local" you are, you risk scaring away people who want you to be easily accessible out of town. There are ways to counter this: ensuring you're a part of a shared ATM network; having reliable, easy-to-use online banking; call centers; and so on. But how do you stradle the knot? "Use your money anywhere - it'll still be here." Kinda confusing, but I'm no copywriter. Is there a fear that members will choose a big bank because they believe it's more convenient?

What do you think? Is being a co-op important to your credit union? Is it important to you personally? Which way do you lean? Any great examples of people maximizing this local synergy? 

Tell us about it in the comments. 

 

April 19, 2012

Point, Counterpoint - No More "Fun" in Functions?

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I read an interesting post from That Credit Union Blog yesterday, in which author Rob Rutkowski shed a tear or two for NCUA examiners who were doomed to attend a conference with no free meals or drinks. Not becaus of anything they did, mind you - most of the blame goes to the GSA, who spent $800,000 on an extravagent Vegas that outraged the public and the President, too. 

Rutkowski, from his post: 

...Canceling a reception does not help moral...Look, NCUA has to compete with private employers to recruit bright and honest people.  Are there perks in being an employee of the federal government?  Sure, good benefits, nice holidays, what have you, but in Washington D.C. private industry pays more and NCUA has to compete with that.  Having a modest reception for hardworking employees in any industry is a good idea.

A short time later, Aite's Ron Shevlin (of the Snarketing 2.0 Blog) offered his colorful reply: 

This is the political reality of the times, Rob. The GSA is part of a government whose President calls for “shared sacrifice.” Spending $800k on an event isn’t shared sacrifice, and it should come as no surprise that political opponents would make hay out of this.

I have to believe that Ron's onto something when he talks about the political blowback of another raging party scene. I'm sure that after the GSA had its fun, a big, bad envelope showed up on the desk of every director in every branch of government with a very simple message: 

"Don't even THINK about doing this."

What's the happy medium? How can government agencies give employees a good conference experience and a reason to continue their employment without blowing nearly a million dollars on swag? 

I want to hear your thoughts - leave your comments below.

 

April 05, 2012

The Worst Part of "Data"

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by Ron Daly 

The era of social media has changed many aspects of our daily lives. We don't wait for news to happen, it happens and we're sent our own little headline to read and link to click. We don't wait for emails from family, they broadcast what they've been doing and we just observe as an audience. You don't have to work that hard to be a stalker...heck, all the hard work's done for you.

I read this article on Cult of Mac about an app called "Girls Around Me", at one time available on the App Store (now removed), that could show anyone using the app where girls (or guys) were in their area on a Google Map. Not only could you see images of the "girls" in your area, you could see their personal details. You could even track their movements.

I was disgusted...certainly, as a father, but even as a human being. These girls were being tagged - if you wanted to, you could walk up behind one and call her by name. 

Is this what we want? 

Troubling thing is, these girls didn't seem to know they were doing anything "wrong"...they were just checking into locations and updating their Facebook profiles. 

Read this section of the article, where the author was asked by a friend how this app could be sold on the App Store. 

...I replied that as sleazy as this app seemed, Girls Around Me wasn’t actually doing anything wrong. Sure, on the surface, it looks like a hook-up app like Grindr for potential stalkers and date rapists, but all that Girls Around Me is really doing is using public APIs from Google Maps, Facebook and Foursquare and mashing them all up together, so you could see who had checked-in at locations in your area, and learn more about them. Moreover, the girls (and men!) shown in Girls Around Me all had the power to opt out of this information being visible to strangers, but whether out of ignorance, apathy or laziness, they had all neglected to do so. This was all public information. Nothing Girls Around Me does violates any of Apple’s policies.

You see, it's all just data. Yes, it's personal. Yes, it's revealing. Yes, in the wrong hands, at the wrong moment, it could be dangerous, even deadly. But on the most basic level, it's just data. Facts and statements, numbers and figures. Separately,  they don't seem like much:

"I went to the laundromat today."

"I just became the mayor of the Fro-Yo place."

"I dumped Josh, so I'm single again." 

Put them all together, you get a pattern. Look at a pattern long enough, you begin to see ways to exploit it. 

A few weeks back, we brought up the story of a teenager whose parents figured out she was pregnant after she got baby coupons from Target. Our solution? A little more humanity in an automated process. But all of this data comes from behavior. The girl with the coupons? She bought a certain set of products Target had flagged as products purchased by pregnant women. The girls on "Girls Around Me"? They were posting updates and "checking in" to locations. They were all behaving a certain way and leaving an easy-to-follow pattern. What's the solution? Make people behave differently? Or, more simply, teach people how to self-select their level of privacy?

The same website (Cult of Mac, which for Mac-minded people is a very good read week-to-week) came up with a guide to stopping this kind of data output on your Facebook and Foursquare accounts. Give it a look...it could be very helpful.