credit union

by Robert McGarvey

A question is getting asked these days that you probably never thought would be on the minds of credit union executives: should we get involved in cannabis banking?

Even 10 months ago it was a topic broached only by the boldest financial institutions. Why? Because one recent US Attorney General had been adamant that marijuana is against federal law, period. And, although his successors have been vaguer about marijuana, the volatile character of the current White House gave pause to many in financial services.

In a worst-case scenario, the whole of an institution’s assets possibly could be tied up over a single, small cannabis business, and who needs that?

Not too many, in fact. For the quarter ending in March 2020, just 710 banks and credit unions reported serving marijuana businesses, down from 739 for the quarter ended in December 2019.

Continued in the CU2.0 blog

The subtitle for this podcast should be All You Wanted to Know About Mortgage Servicing But Were Afraid to Ask.

Our guest is Andrew Wang, CEO of Peach Street, a new approach to mortgage servicing that just may be exactly what many credit unions want.

Most mortgages are passed off to third party servicers for two reasons. The servicers know the government regs and how to comply and they also are skilled at cutting costs.

Most see mortgage servicing as commoditized and the only difference between companies is price.

Enter Peach Street which puts a focus on consumer experience, customer experience, and technology.

Lost at many mortgage servicers is interest in the consumer experience, if only because the servicer’s customer is the financial institution that owns the paper.

Peach Street wants to win by offering a new model where experiences matter.

A lot of what the consumer needs will be delivered via self service online – but in most surveys that approach lowers consumer friction.

“This is about a 30 year relationship,” said Wang, who adds that, done right, mortgage servicing can become a vehicle where the financial institution cross sells products to a happy consumer.

“Mortgage servicers should think of themselves less as a collection agency and more as a financial adviser,” said Wang.

Along the way, Wang tells how Peach Tree has ended NSF fees for its consumers and also its innovative thinking about how to handle foreclosure in a way that benefits the homeowner, the lender and the community.

See what we meant: this is all you waned to know about mortgage servicers and didn’t know to ask.

Listen to the Wang podcast here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

Is there racism in US financial institutions?

Can credit unions make a difference in the fight to combat racism?

Yes is the answer to both, says Renee Sattiewhite, CEO of the African American Credit Union Coalition, a founding member of the CU DEI Collective which is centered around this belief: “We believe that diversity, equity, and inclusion is good business and is fundamental to a vibrant, relevant and growing Credit Union Movement.”

That is the key: practicing DEI is both the right thing to do and good business.

The US increasingly is a minority majority country.

So is today’s DEI movement likely to result in real changes?

Or is it another well intended effort that results in little substantive?

Ask Sattiewhite and she will tell you she is optimistic. Maybe cautiously so. But optimistic nonetheless.

“This time is different,” she said.

The time for change is here, she believes, a reality dramatized by weeks of coast to coast protests against racism and police brutality.

“I believe credit unions can lead the way in helping America eradicate racism.”

Sattiewhite is keenly interested in job opportunities in credit unions for people of color and she has numbers: there now are 15 African American CEOs of credit unions, including 6 at billion dollar institutions.

Could there be more?  “I look at this and see a glass half full,” said Sattiewhite, who added that credit union can do more, better in hiring minority professionals, promoting them, and – this is key – recruiting minority board members.

Hear the Renee Sattiewhite podcast here.

There are many related podcasts in this series, including #100 with Victor Miguel Corro of Coopera, another CU DEI Collective member, and also Cathie Mahon, CEO of Inclusiv, also a CU DEI Collective member.

Sattiewhite also offers a shout out to Jim Blaine, a past podcast guest for his support of AACUC.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

Something is happening, something big, when it comes to the US and race relations and this is making itself felt in financial services.

That’s the strong opinion of Victor Miguel Corro, CEO of Coopera,  a consulting firm – started with support from the Iowa Credit Union League – that helps credit unions meet the needs of Hispanic consumers.

That market is huge.  In less than thirty years, one in three US consumers will be Hispanic, said Corro. Right now, Hispanics are about 15% of the US population.

But this conversation is about still more – the founding of the CU DEI Collective, by some 15 credit union related organizations, including CUNA, CUNA Mutual, Filene.  The organization explains its purpose: “The CU Diversity, Equity and Inclusion Collective is an expanding group being formed within the Credit Union Movement devoted to furthering DEI, a shared cooperative principle. We believe that diversity, equity, and inclusion is good business and is fundamental to a vibrant, relevant and growing Credit Union Movement.”

Corro was in on the founding.  Several additional podcasts with other credit union people are in the works and will post as we continue our coverage of what may be the other huge issue now confronting credit unions (Covid-19 of course is the other).

A credit union disconnect, said Corro, is despite the expanding multicultural character of US society, 90% of credit union board and c-suite positions are filled by non Hispanic whites.

But the credit union board, and its executive team, to succeed have to look more like the communities they serve, said Corro.

This is an expansive conversation.  The foundation is Corro’s belief that, for a credit union, a multicultural tilt is not simpy a good thing to do, it also is good business. It’s a way to stay relevant in a society that is changing its face.

Regular listeners will recall Corro from an early podcast, #17. Catch up with it here.

A related podcast is with Cathie Mahon, CEO of Inclusiv, the association of community development credit unions. Hear her here.

Hear the new Corro podcast here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey

Call it a sea change – a massive alteration of the US financial services landscape.  Everything seems different today and it is because of the pandemic.

What do you need to be thinking abut now to survive tomorrow?

An interview I did with Cornerstone consulting firm’s Brad Smith for a CUInsight article left me wanting more from Smith and here it is, a one-on-one podcast where we hear what smart credit unions are doing today.

Like what? Like recognizing that the mainstage role of the branch finally is over, probably forever. Smith is not saying he thinks branches are toast – he doesn’t – but he thinks their role is necessarily changing as many of us have gotten accustomed to not needing the branch and many of us also are simply fearful of places like branches.

Much financial services has shifted to digital and there it will stay.

“The challenge for credit unions now is learning to sell through the digital channel,” said Smith – and many institutions are playing catch up.  There’s no time to delay.

An unexpected problem, said Smith, is that the economy’s collapse has necessitated taking a new look at the FICO scores that used to enable confident and instant credit decisioning.  But that 800 score of May may be today’s 700 score and falling due to late pays, job loss, and worse.  

How can an institution provide the fast decisioning consumers now expect – but do it safely? Smith has thoughts.

Another big winner today: MRDC, said Smith. Even those who had scorned it are diving in.  

One more big winner: video chat.  We use it at work and we are now ready to use it in financial services. “Video conferencing will be another net winner,” said Smith.

An area where credit unions need to hop to it: credit card rewards programs need restructuring. The big players – Amex, Chase, Capital One – already are on the move.  Credit unions need to think fast and hard about this. But not many are, Smith admitted.

A last pandemic triggered push: a huge drive for cost savings and efficiencies. Many credit unions are looking to trim costs on commodity tech – think core systems – and redirect monies into strategic tech – such as true digital account opening.

Big changes are in motion.  Smith offers a road map in this podcast.  Take notes.

Hear the Smith podcast here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey for CU2.0

Everything is different today in financial services.

That means your credit union.

For the past decade, many credit union executives smiling agreed that they needed to make changes to keep pace with the mega banks—but times have been good and talk was cheap. Almost all clung to their traditional, branch-centric financial services practices.

The branch is king, long live the branch!

Except no more.

In many states, branches have been closed for months.

In just about all states, consumers are steering away from branches to better avoid the coronavirus.

You Can’t Go Back in Time

Enter Brad Smith, with Cornerstone Advisers, who thinks long and hard about what credit unions need to be doing to prosper in a post-pandemic world.

Continued at CU2.0

by Robert McGarvey

You want to read James Robert Lay’s Banking on Digital Growth.  It’s a book not about digital tools but rather about the transformation of community financial institutions, credit unions included, into organizations that can compete with and win against the mega banks.

Too small to do that? Nope, says Lay. That size can be a strength. It means a credit union can turn on a dime – if it chooses to.

It starts with recognizing that the traditional branch first marketing model is broken. Today’s consumer is digital first. And yet at most credit unions digital is simply a bolt on onto the old branch model.

Time for a refresh. Think digital first. Flip the business model and that’s the path to success.

Lay also believes that “Covid is a wake up call.” He is not trivializing the damage it is doing to the health of the nation, or the finances of many of us. What he is saying is that this is the time to look for new opportunities. Many credit unions will fail because of Covid. Many others will find new prosperity.

Why haven’t more credit unions seen the need for big changes? Precisely because they have had a good 12 year run since 2008. Why fix what ain’t broken?

But now breaks are showing.

Make the most of opportunities.

This podcast is about digital transformation but what you won’t hear is propellerhead talk. Lay is a marketer at heart and that’s what you will hear. And it’s what you need to embrace to get ahead in 2020, a year of immense challenges.

Hear the Lay podcast here.Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.comAnd like this podcast on whatever service you use to stream it. That matters.Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

Do you have 10 minutes?

That’s all it will take to listen to this CU2.0 Fast Take on PPP Loan Forgiveness, a topic that suddenly is bedeviling thousands of credit unions as they confront the reality of how time consuming it is to navigate the loan forgiveness process.

Make no mistake: you want to get that loan forgiven. Best guesses are that many of the loans that aren’t forgiven will in fact default.

You don’t want that on your books.

How long does the loan forgiveness process take a credit union that manually tackles even loan?  Figure 10 to 20 hours.

That cannot work on a $100,000 or $50,000 loan.

No way.

Enter Capiform, where CEO Sherif Hassan tells in this Fast Take how to get the credit union staff time down to a few minutes, maybe an hour, max, per loan forgiveness application.

The secret: Capiform screens that guide the borrower as he/she inputs the needed data.

Call it a Tom Sawyer moment of brilliance.

And Capiform gamifies the process so it almost becomes fun for the borrower.

10 minutes.  Spend them wisely. Listen up.

Hear the full length Capiform podcast here.

Want more info? Contact Capiform at its website.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey

Steve Winninger is the man to talk with about credit union boards and governance.

A longtime credit union CEO – 20 years at Lake Trust – now a $1.6 billion institution based in Michigan – plus he also served as CEO at IBM Lexington and since retiring from Lake Trust he has put in stints as CEO at four credit unions (only one of which merged out of existence).

But Steve is a rare CEO.  He loves talking about the role of the board and – done right – a board should be crucial in a credit union’s prosperity.

But many CEOs grumble about board meddling. In other credit unions – mainly larger ones – it’s the board that grumbles that they are ignored.

Sigh.

Hear Winninger’s views on that dichotomy in this podcast.

In this podcast Winninger spells out the four steps a good board must take. Must. No exceptions.

We also talk about whether boards are ready and able to help in the immensely difficult decisions that loom as credit unions wrestle with the economic fallout of the Covid-19 pandemic.

In this podcast we talk about some writing I did on Partners Credit Union – click the link and read about it.  There’s a mention of Maine Harvest Credit Union, also the effort to form a student credit union at George Washington University.   Follow the links to hear the CU 2.0 Podcasts.

Listen to the Winninger podcast here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey

Michigan Legacy Credit Union just may be a unique $220 million institution – it’s the product of five mergers in five years, said Carma Peters, the CEO.  And now she said the institution is on a huge digital push, an initiative that had been in the works but Covid-19 has intensified the effort.

One Michigan Legacy employee has died from Covid-19. So did a former member of the board.

All this hits Peters hard and, she said, she tells employees and also members that there is no rush to re-open the credit union’s six branches

“We sent out a strong message from the start of the pandemic that the safest way to bank was for members to use online and mobile banking and webchat, rather than coming into the branch,” Peters said. “While we were hopeful that members would comply, the shift to online banking has been dramatic, with 50,000 more online transactions in April than we had in March. That’s a 38% increase.”

Peters thinks that shift is permanent and she is deep into a total revamp of the branches. The remodeled ones will be around 1200 sq. ft apiece. “We are downsizing 35,000 sq. ft.” said Peters.

There won’t be a teller line.  There will be a couple ATMs, also a drive-through teller.  And Michigan First will provide members with video banking (and she tells about a much more affordable option that she is installing in her credit union).

The big question: can credit unions the size of Michigan Legacy survive?

You bet, said Peters.  And she goes a step farther – she helps smaller credit unions survive by helping them with tasks that may be beyond their staff’s skills.  Why? It’s the credit union way: helping others.

This is an optimistic podcast about small credit union survival. Listen here

In this podcast, there’s mention of Jim Blaine (podcast here), also Randy Karnes (podcast here), and a video tool named Popi/o (linked here).

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto