More Ads Coming Out of More Credit Unions - Will It Mean Business or Backlash?

by Ron Daly 

The New York Times did a run-down of credit union ads and the new face of credit union marketing Friday of last week.  The article (in my opinion) goes back and forth between "about time" and "really?" in terms of tone. There are some praise-worthy notes and some jabs that feel a little more like condescension than reporting. But maybe that's just me. 

This was accompanied by a "Bucks" blog post with videos and PDF versions of "anti-bank" campaigns from different CUs around the country. 

I really liked the above ad from America's First FCU. It's got an "anti-bank" element to it, but it ends on a high-note and isn't vitriolic. One aspect of many of the ads featured are actors pretending to be bankers. Really? You really can't come up with one single real-life example of "bankers behaving badly"? Watch the video below:

Visit msnbc.com for breaking news, world news, and news about the economy

Remind me: When's the last time a group of credit union employees tore up the highway in a Lambo? 

There are folks who are concerned all this "bank bashing" is counter-productive. One such person is Jason Sherrill, who wonders if this method of advertising has lead to more people being against financial institutions altogether...and to consequences such as the Durbin amendment. 

I want you to tell me what to think about all this. Are these anti-banking campaigns going to have a negative effect on membership and on our credibility as an industry? 

I set up a simple survey via our online survey tool that will collect your data and I'll print the results when I have an "n group" of 50 voters. 

Talk to me, credit unions. What say you?

Go to http://tinyurl.com/soapsurvey1 and tell us what you think.

[Thanks again to friend-of-the-blog Jeffry Pilcher and The Financial Brand for bringing these stories to our attention.]

Reg E Opt-Ins, Part 2: Compelling Arguments

by Ron Daly 

Our last post walked through some of the headaches associated with Reg E opt-in programs at credit unions. Members are reportedly planning to throw away their opt-in forms and not bother with overdraft protection, and there's really not much we can do other than make a compelling argument as to why members should enroll.

An article from CU Journal from the 17th of this month has advice from Rory Rowland of Rowland Consulting. I thought some of it was worth sharing with you.

Some mistakes that Rowland says CUs are making: 

• Waiting to see what happens: "This is not a healthy strategy. Get a plan of action. Place an (opt-in) banner message on your website to encourage people to opt in. When members overdraw, send them and e-mail and tell them about the new regulation and that they need to opt in. If they are in the top 29% of your abusers, call them." 
• Lack of monitoring: "You need to know how much income you are making from courtesy checking-20% to 29% of your members give you 90% of your NSF income. Target those top 29% and get them to opt in before July 1."
• Front-line staff have no idea what they are doing: "Do you have talking points written for front-line staff to tell members how to opt in?"

Waiting It Out, or Just Not Getting On Board?

by Ron Daly

There's an old joke about a guy who lives at the foot of a volcano. The volcano erupts, spilling lava toward his home and his village. His neighbors hop in their car and say "Our car is fast, we can get away in time. Come with us." 

"No," says the man, "God will come for me and save me from the lava."

Later on, the lava has reached his porch and burned off the front steps and the siding. The man climbs to the second floor of his house and a military tank full of survivors rolls by and says "Sir, jump onto the tank. We can't get burned and we'll keep you safe."

"No," says the man, "God will come for me and save me from the lava."

The lava gets deeper, and the house starts to dissolve. The man must climb up to his roof. A helicopter drops him a rope ladder, saying "Climb up! Climb up!"

"No," says the man, "God will come for me and save me from the lava."

The man gets swallowed by the lava, and is reduced to ash.

He gets to Heaven and talks to God. "I thought you'd save me!" the man said to the Almighty.

God looked confused. "I sent a car, a tank, and then a helicopter - what more do you WANT from me?!?"

Which reminds me - Reg E is still an issue. 

Get with the program! 

Reg E is an issue that threatens everyone in the financial services industry - it's going to affect income and capital, it's going to affect member relationships, and it's going to affect the bottom line. Credit unions across the country are scrambling to try and find a way to get folks "opted in" before the deadline on August 15 (yes, there's a July 1 deadline on new members, but August 15 affects everyone). There's a lot of worry, as some credit unions/banks just can't do without the fee income. And when the next step is a choice that hinges on the members and customers, the results could be a blessing or a curse. 

Blessing: the income still exists, members just have to opt-in to overdraft protection (or courtesy pay, whichever you prefer). Which means they'll get their way at POS and pay for it later, and the CU can collect on the error.

Curse: everyone is automatically opted out after August, and that's going to mean a big hit on income. Whether they come back to overdraft protection or not is at their discretion. 

Everyone knows that Bank of America announced they were doing away with overdraft fees and came off looking like a good guy as a result. But they're still offering overdraft protection, they're just making it so that it takes the difference out of your savings or credit account and charging a $10 fee for it, according to this NYTimes.com article. When every headline related to that story says "Bank of America does away with overdraft fees" and you're asking people to CHOOSE to be assessed those fees, how do you win? 

What's worse, according to this CU Journal article, is that members are planning to throw out their opt-in forms when they get them, and somewhat more disturbingly: 

The findings should be noted by credit unions and banks, said [Brian] Beach, [CEO of ACTON Marketing], because those customers will not have overdraft protection when they overdraft, will start to have their retail purchases denied and most likely will move their accounts elsewhere. “The psychology of overdraft users is such that they are extremely averse to having their debit card transactions denied at retail,” said Beach. “If they begin to be denied, they will not just re-opt-in with their current bank or credit union. Most likely they will cut and run.”

So, here's the question: how obvious is your car, your tank, your helicopter? Will a person who is at risk to use this service you've provided to them for years know what happened when their transaction is declined? Or are they just going to blame you and leave for a bank? In a new, debt-conscious America, will people want the chance to go over the limit at all? 

The lava's on its way. Get as many folks on board as you can. And if they get "burned", remind them - they had (and still have) a chance.

Your feedback is always welcome. 

EDITOR'S NOTE: 

 Full disclosure time. DigitalMailer is offering a Reg E Opt-In package that uses email and secure online forms/databases to record member opt-ins and encourage more sign-ups. 

Email us at info@digitalmailer.com, let us do a walk-through of the system for you, and if you tell us you're a Soapbox reader, we'll give you a discount on the system. 

This is your call to action - get started now. 

Tired of the Bank? CBS Says "Dump That Sucker"

by Ron Daly

We've been talking about the "Move Your Money" movement for a while now. CBS's EconWatch published a story earlier this week titled "Hate Your Bank? Dump That Sucker For a Credit Union!" It came with the video below and spelled out the differences between banks and CUs. [Note -- email readers, please click over to the website to watch the video.]

We've had quite a few of these in 2010. Do you find your credit union gets more memberships/inquiries because of them? What do you wish these videos would say? Are videos like these something you share with members via email or your website, like TDECU does on their home page? 

Tell us all about it in the comment section. 

Bank Customers Are Mad As Hell, But What Else Is There?

by Ron Daly 

An article caught my eye on Monday about rallies against banks in major cities around the country. Citizens angry at big banks (with a particular focus on Goldman Sachs, still the whipping boy for public ire) mounted protests in places such as Charlotte, NC, New York City and Washington, D.C. One particularly disturbing protest involves a giant, inflatable banker chewing up people and spitting them out - as in the following video. 

Man, that's weird. 

Anyway, it made me wonder about how credit unions are doing with drawing new members away from their old banks.As a company that works with over 180 credit unions across the country, we know that there are a handful of credit unions willing to poke at the bruise left by the big banks to get new member's attention. 

Where Anger Fails, Marketing Succeeds

It seems like every six weeks, we get a new story about the "big banks" that drives people crazy, but we rarely see an "action step" coming from the other side.

Two opinions to consider when it comes to working with "Bank Rage" - that of Paul Lucas of Paul J Lucas consulting, and that of Ron Shevlin at Aite Group. 

In the April 12 issue of the CU Journal, Paul Lucas outlined three major action items for credit unions looking to sway the opinion of the non-member. 

1. Marketing Core Loan Products - That loan capital is capital you can count on, and do more with in the long run. 
2. Cross Sell Checking with Direct Deposit - says Lucas, "Cross selling at every opportunity is the hallmark of a smart, competitive credit union."
3. Keep Your Promises - "Knowing a member's name when she walks in the front door is not service. Handling her transactions with speed and accuracy is service." 

And speaking of service...I read a very thoughtful article on Marketing Tea Party, the new blog by Ron Shevlin. Titled "Moving His Money", the post tells the tale of a man with a long relationship with his community bank that, because of a series of unfortunate transactions, decides to move from a little bank TO a big bank. Says Shevlin in the post-story commentary: 

"This isn't a good sign for those marketers. The populist anti-big bank sentiment isn’t going to last forever. America loves to find new villains to crucify. Knowing when to jump off the #moveyourmoney wave is a decision that needs to be made."

My Rant: Why do credit unions always fight over the small piece of the pie left to them? Let's quit marketing against each other, continually moving our 6% market share between credit unions and let's figure out a way to collectively go after the 94% opportunity share out there and move it to credit unions before it's too late. 

Comments?

Making a Statement - How much "green" are you saving?

by Ron Daly 

Happy Earth Day, everybody! Here's hoping you carpooled to work, you're recycling all your soda cans, and you've changed all your light bulbs to those cool curvy ones. Most of all, we hope your credit union is offering electronic statements and documents to save money and save trees. 

You're curious. How many trees am I actually saving? The answer might surprise you. It takes a lot of paper to create those mailed statements that go out at the beginning of the month, and given your number of members receiving two, three, and four sheets of paper per month, the number of trees you can save with eStatements ever year can be quite surprising - not to mention the costs you're saving by encouraging members to go green by going paperless. 

DigitalMailer Green Check-Up - Click here to get your diagnosis!

 

 

We've created a very simple calculator to help determine how "eGreen" your credit union is. Click here to visit digitalmailer.com/greencheckup and run your numbers through our calculator to see how you're doing and how much "green" you're saving. You can share your score via Twitter or Facebook, or email us for more info. 

What are you doing to make your credit union greener - today, or any day? Let us know in the comments. 

Information: The Number One Enemy of Bad Lending

by Ron Daly 

I recently learned about "Borrow and Save", a program started in Baltimore by the Neighborhood Housing Services, banks and the FDIC. The program allows underserved consumers to borrow as much as $1000 at an 8% interest rate, but requires that they go through a "financial fitness" class to get the money. 

This story from WAMU in Washington talks about one consumer who has already been helped by this program. 

"I grabbed the number as soon as I seen it. I said ‘I can’t believe this is happening.' This is what I want, way better than the alternative was," says Witherspoon.

The alternative was a cash advance loan with a double-digit interest rate. Witherspoon says he did that before and it took about three years to get clear of all the repayments...

Witherspoon used his loan to pay some bills and move to a safer neighborhood with his wife and grand-kids. But he says the financial counseling was more valuable than the cash. One lesson: pay yourself first.

"So now I snatch $40 out of my pay no matter what going to a savings account just to make sure I got a little extra that I don’t need or don’t touch. That’s a plus for me," he says.

Music to a former CFO's ears. 

Here's the cold, hard truth - folks in underserved/underbanked areas that take on payday loans aren't "borrowers" so much as "victims". The rates are ridiculous (650% APR, in some cases), the terms are ridiculous (loans rolled over after the initial period, which many lawmakers are seeking to end), and borrowers who are barely getting by are finding themselves further away from financial stability as a result. A little information goes a long way in getting folks who previously thought financial management was unattainable on the right path to recovery and eventual prosperity.

I know there are community CUs and specialty CUs that cater to folks like Mr. Witherspoon (mentioned in the story above), and if they have programs like this I'd love to hear more about it. I think CUs that offer programs/packages such as this are doing good work, work that should be mentioned and applauded. If your credit union offers similar programs and is fighting hard against the pull of cash advance and payday lending, let us know. We will devote a story to your credit union's anti-payday program and give you the credit you deserve.

Your thoughts and opinions are welcome, as always, in the comments section. 

Let's Talk About Money

by Greg Crandell

[Editor's Note -- Ron Daly is off for the week, so Greg Crandell, DigitalMailer's Executive Vice President, is stepping in for a guest post.]

I'm certain my kids are going to cringe if ever they read this, but I'd be remiss if I didn't start out with this phrase. 

IN MY DAY...people didn't talk about how much money they were making or what they were doing with it. The most chatter that went on about a person's money matters happened when your neighbor drove home with a new boat dragging behind the car. Hopefully on a trailer, because there's no faster way to ruin a boat than by dragging it down a rough street. 

But the times, they are a'changin', as they so often do. People are becoming more open, sharing their thoughts via Twitter, their home movies via YouTube, their hobbies over Etsy and their...well, everything via Facebook. Facebook surpassed Google in total visits to its homepage a few weeks ago and, as CNBC says, it's "a sign that the web is becoming more sociable than searchable".

Even as the world wide web begins to bring people even closer together, online banking becomes a greater part of people's finance management. Of course those realms are going to overlap, but to what effect? 

Buy the Cow, OR Just the Milk!

by Ron Daly 

Let's pretend for just a moment that you run a credit union (and you might). Your credit union can offer checking and savings and loans, but has no online banking, no student lending program, and a weak collection strategy. "Just doing" these programs isn't in the cards, given your membership size and available capital, but doing without them will surely cost you future members and won't let you compete with the mega-bank down the street. What do you do? 

If "use a CUSO" didn't cross your mind, you're sadly not alone. 

In a recent article from CU Journal, Tom Davis, CEO of the National Association of CUSOs (NACUSO), expressed his frustration with credit unions' unwillingness to invest in CUSOs. 

From the article: 

"Why think about joining a multi-owned CUSO in the first place?" Davis asked rhetorically. "Because it will help sustain the credit union. It will drive value to the credit union's members. It spreads risk among multiple credit unions. It adds expertise. We need to point out the advantages, specifically driving value back to the members, which is why we are here. Putting my NACUSO hat on, that is what we are all about...we provide applied learning experiences on the value of collaboration."

Tom has some great reasons for investing in a CUSO and collaboration. The article is worth the read. But here's a question that hasn't been asked yet, and I'm going to be bold and put this out there: 

Why not just BUY from a CUSO? 

I can appreciate why a credit union would buy into a CUSO so they'd have a stake in its success, add value to the CU, and obtain owner pricing. But if what you need is a service and what that CUSO is providing is the exact service you need, just buy the product from the CUSO! You don't always need to invest in the CUSO to become a part of it, you just need to use their products and services. 

I put my CUSO (DigitalMailer) out there as an example. We're the 2nd largest eStatement provider in the industry, our email engine is designed to help you maximize your online marketing ROI, and we're used by 180 credit unions nationwide. When it's down to two, if you have the choice between an industry outsider or someone with ten years experience in financial services, why choose the former? 

 Put simply: When it comes to CUSOs, you can buy the cow and get the milk or you can just buy the milk. All things being equal, when considering a vendor, we encourage you to buy CUSO. 

As always, your comments are appreciated. 

HAMP Hampered

by Ron Daly 

The successes of President Obama's financial programs have been debated by pundits for the past year or so. Some say that progress is naturally slow in recovery and that the seeds of these initiatives will bear fruit for years to come. Others say that the programs have not helped enough in the short term to warrant their continued support. 

One program being debated currently is the Home Affordable Mortgage Program, or HAMP. A recent story from ABC News talks about the program - its proponents, its opponents, and its short-term success. 

Watch the video below. [EMAIL READERS - please visit the website to view the video. Flash player required.]

According to the online version of the story, only 116,000 homeowners have taken advantage of the $75 Billion program thusfar. Only 116,000 on a program designed to help 2 million? Why? Because bankers won't help customers and would rather foreclose. This has led some lawmakers to call the program a "failure" and has prompted the Treasury to suggest a stronger hand. If the Treasury and the Obama Administration had their druthers, banks would be required to see if homeowners qualified for HAMP help prior to foreclosure. Banks would only be allowed to begin the foreclosure process after a borrower had been officially unqualified.