CU2.0 Podcast Episode 41 Sherri Davidoff on Cyber Insecurities and You

Put phishing emails in front of credit union employees and how many will fall for them and cough up sensitive info? 20 to 60% will get conned.

And that can be costly to a credit union, both in terms of money and reputation.

Enter BrightWise, a Des Moines Iowa cyber training company created by Sherri Davidoff, CEO of LMG Security, and the Iowa Credit Union League’s holding company Affiliates Management Company (AMC).

After training, said Davidoff, the number of employees who fall for the phishing con tumbles below 10%.

What BrightWise will focus on, said Davidoff, are fun, short videos – think maybe five minutes – than an employee can absorb at his/her leisure.

Smarter employees are critical because how hackers work has changed, said Davidoff. “It’s no longer 13-year-olds in their moms’ basements that are hacking us; it’s organized crime groups all over the world,” Davidoff shared with NBC’s Today Show.

“People tend to think cybersecurity happens in the IT department,” added Davidoff. “Front-line staff are under constant assault from crooks and their automated robots, look-alike communications and other crafty tricks. We have to arm employees with knowledge, but also give them the tactics they need to sidestep cyber sneak attacks.”


Want more details on the Paul Allen scam? Read this.


Listen up to this podcast for a fast overview of the cyber threats credit unions face – and what they can, indeed must, do to protect themselves and their members.


Listen here

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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

CU2.0 Podcast Episode 40 the Jim Blaine Marathon

At 30 he took over as CEO of State Employees’ Credit Union in North Carolina.  That was 1979.  Come 2016 and he retired. SECU had grown to $33 billion – and it had 256 branches and 5800 employees.

That’s the Jim Blaine story and here he sits for a marathon interview, the longest in this podcast’s history.

It’s worth the hour. Make time.

Blaine starts out by questioning the wave of mergers that is now rocking the world of credit unions. Why not just liquidate the institution and give every member $1000?

Keep listening and you realize he’s not exactly for doing that. In fact he denounces the loss of a few hundred credit union charters yearly.

What he is actually doing is highlighting a reality that, typically, those mergers accomplish just about nothing. The resulting institution, a bit bigger, is in fact no more competitive.

Blaine also worries about the loss of local institutions, where in many credit unions all decisions – including the trivial – get made at corporate HQ.

Is there in fact a future for credit unions?

Maybe. Maybe not.  Blaine highlights a strategy for keeping credit unions relevant. But he frets that many may not heed the message.

Are you listening?

Listen up to Blaine here.

Related podcasts mention in this interview include Bill BynumMaine HarvestTeresa Freeborn, and Cliff Rosenthal.

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

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

What Do Younger Generations Want from Credit Unions?: The CU2.0 Focus Sessions


By Robert McGarvey

Chew on this Credit Union Journal headline:  Credit Unions are losing the war for Millennials.

Worse, the average member age keeps trending up.  Per the CUJournal article, “Half of credit union members are now age 53 and older. These are members who for the most part have gone through their home-buying and wealth-building phases and are approaching the slow draw down of assets in retirement, if not there already.”

Credit unions could pat themselves on the back for wooing more than their share of Gex X – 31% of members are in that cohort – but hold the back slapping because credit unions are desperately failing in the fight for Millennials (born 1981-1996), the prime ages for active borrowers.

The CUJ piece said: “Right now, just 24 percent of members are millennials, while 40 percent of customers at digital-first direct banks and 34 percent of customers at the top 50 global bank are millennials. Credit unions are losing the battle for the youth.”

Probably credit unions are doing no better in the fight for Gen Z (born 1996-2015), whose oldest members are now out of school, in the workforce, buying cars, using credit cards, and dreaming about home ownership. They are about 20% of the US population and a reality is that most credit unions just ignore them. That’s pushing Gen Z into the arms of fintechs (can you say Venmo?) and the global and digital banks . And that’s a mistake.

What do credit unions need to do to win these generational battles? CU2.0 recently convened two focus groups.  One with three Gen Zs, in the other three Millennials spoke up.

You won’t like what they had to say.

(Both sessions are in the CU2.0 podcast series. Hear their words from their very lips. Gen Z podcast here. Millennials here.)

There is good news. Both cohorts agree that credit unions have a lot of plusses. Free checking is widely available – especially important to many who are burdened with sizable student debts.  The non profit status of credit unions is a plus with these age groups. So is the community orientation of most credit unions.

And the last big plus are the vast credit union surcharge free ATM networks, via Co-Op and also via CuLiance, where each network is 2x the biggest bank ATM networks. Just one problem: very few millennials and Gen Z know about this. “I didn’t know about this network until today,” confessed one focus group participant who works for a company that consults with credit unions.

Just about all the participants said that few, if any, of their friends and generational peers knew about any of the credit union plusses. They don’t even know they are non profits.

“They seemed sketchy to me,” said one participant who indicated he had thought credit unions were kind of wannabe banks that weren’t big enough to qualify.

(Listen to the CU2.0 podcast with Teresa Freeborn who heads CUNA’s $100 million “Open Your Eyes” campaign to raise awareness of credit unions.”)

The bad news continues. Credit unions pride themselves on their branches – but do younger generations ever step in a branch? Nope is the answer from many.  “I haven’t been in a branch in three years,” said one in the focus group.

And credit unions have a lingering reputation for serving up antiquated, secondrate technology – which is especially bad news with generations who want to do most of their banking on a mobile phone. Is the technology really this bad? Doesn’t matter if enough of the young believe it.

So is this RIP credit unions? It is not. The focus group members pointed to the strength of the credit union message and urged credit unions to get busy and active spreading their messages on social media (and maybe not Facebook – listen to the podcast to learn why).

Another idea that emerged from the focus groups is the suggestion that credit unions get busy offering financial education and budgeting skills classes geared to the young – perhaps as young as middle school students.  With many young graduating college deep in student loan debt (upwards of $37,000 apiece), these generations could benefit from classes in basic budget skills.

And get them as members early and they just may stay members – especially when they understand that the ATM networks mean they can access their credit union no matter where their travels take them.

Last advice from the focus groups: run one of your own. Gather up three or six millenials for a one hour session, do likewise with Gex Z, and listen, listen, listen.  They will tell you how to market to them if you only ask. The best route to actionable information is to go to the source. They want to tell you how to serve them better, Just ask.

Listen to the two part CU2.0 podcast on what the young say about credit unions.  

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

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

The Cooperators Podcast Episode 17 Cliff Rosenthal CDFIs

by Robert McGarvey

You want to know about community development financial institutions? Cliff Rosenthal is the man you want to talk to.  He literally wrote the book on CDFIs and also the longstanding credit union initiative to serve the unbanked: Democratizing Finance: Origins of the Community Development Financial Institutions Movement.

This podcast also posted to the CU2.0 Podcast series which I run.  That’s a professional credit union series but the Rosenthal podcast has wider appeal because – fundamentally – it’s about bringing financial services to the unbanked and underbanked and stimulating more economic activity in communities that may be ignored by mainstream banks and even many credit unions.

Credit unions of course are cooperatives. Not all credit union employees know that. But it is fact.

Have CDFIs lived up to their potential?

Have credit unions changed the shape of financial services in America?

Rosenthal has opinions and he shares them in this podcast.

Along the way he talks about his stint at the CFPB – and the ingrained credit union executive distrust of that institution. Which may not be entirely warranted.

Rosenthal pulls no punches. He said, “It dismays me that 100 years after the birth of credit unions we still have a significant problem of the underbanked and unbanked.” And, note, about 25% of households falls into the category.

 Rosenthal also said that in 1990 there were around 13,500 banks and thrifts and a like number of credit unions.  There now are about 5500 of each.  “The number of credit unions falls by 200 to 300 each year.  Ten years from now there will be 3000, 3500 credit unions.”

That math is flawless. And it has to scare you.

In this podcast, you’ll hear a discussion of the successes of a Mississippi CDFI credit union executive Bill Bynum.  He told his own story in this podcast.

You’ll also hear about Jim Blaine, the charismatic, longtime CEO of State Employees’ Credit Union in North Carolina, one of the country’s biggest.

And you’ll also hear Rosental insist that many credit unions that focus on serving the underserved do better financially than those that focus on fighting with banks for more affluent consumers.

If you enjoy this podcast, listen in to the podcast with Cathie Mahon, CEO of Inclusive, a trade group for institutions that focus on community development.

 Like what you are hearing? The Cooperators Podcast seeks sponsors and supporters to help us spread the word about cooperatives and how they often are the better way. Contact Robert McGarvey to find out what you can do to sustain this podcast.

CU2.0 Podcast Episode 37 Cliff Rosenthal on CDFIs

The McGarvey Credit Union Podcast: CU2.0 Podcast Episode 37 Cliff Rosenthal on CDFIs http://bit.ly/2Wd5vBw

You want to know about community development financial institutions? Cliff Rosenthal is the man you want to talk to.  He literally wrote the book on CDFIs and also the longstanding credit union initiative to serve the unbanked: Democratizing Finance: Origins of the Community Development Financial Institutions Movement.

Have CDFIs lived up to their potential?

Have credit unions changed the shape of financial services in America?

Rosenthal has opinions and he shares them in this podcast.

Along the way he talks about his stint at the CFPB – and the ingrained credit union executive distrust of that institution. Which may not be entirely warranted.

Rosenthal pulls no punches. He said, “It dismays me that 100 years after the birth of credit unions we still have a significant problem of the underbanked and unbanked.” And, note, about 25% of households falls into the category.

 Rosenthal also said that in 1990 there were around 13,500 banks and thrifts and a like number of credit unions.  There now are about 5500 of each.  “The number of credit unions falls by 200 to 300 each year.  Ten years from now there will be 3000, 3500 credit unions.”

That math is flawless. And it has to scare you.

In this podcast, you’ll hear a discussion of the successes of a Mississippi credit union executive Bill Bynum.  He told his own story in this podcast.

You’ll also hear about Jim Blaine, the charismatic, longtime CEO of State Employees’ Credit Union in North Carolina, one of the country’s biggest.

And you’ll also hear Rosental insist that many credit unions that focus on serving the underserved do better financially than those that focus on fighting with banks for more affluent consumers.

If you enjoy this podcast, listen in to the podcast with Cathie Mahon, CEO of Inclusive, a trade group for institutions that focus on community development.

Listen, too, to this podcast with Bill Bynum of Hope.

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

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

CU2.0 Podcast Episode 33 Erin Coleman Filene on Thinking Big and Better

How long does it takes your credit union to respond to a mortgage application with a verdict?  Anything longer than 10 minutes just may be too long. Are you still in the game?

At Filene, Erin Coleman, senior impact director, mulls just that kind of question as she hunts for ways for credit unions to stay competitive in a landscape that is ever more perilous.

She also discusses the need for credit unions to involve more young people – as members, sure, but also as employees and as volunteers, even board members.

Then there’s the question of how far in the future you are thinking. A year or two isn’t good enough. Can you think five years out? Ten? Okay, what impacts do you think autonomous cars will have on credit unions – and know they are coming and they will impact you. Are you ready? Coleman talks about exactly that question here.

This is a wide ranging podcast but it just may help light a path to a successful tomorrow. Listen up!

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

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

Fintechs and Your Credit Union


By Robert McGarvey

Ignore fintechs at your peril.

And know that many, many credit union execs do ignore fitechs.

They wrap themselves in a security blanket where they believe they are safe because their deposit accounts come with NCUA insurance and smart consumers always go for insured accounts.

Or maybe not. Fintechs are making a big move that just may put many credit unions in the crosshairs.

In 2018 Quicken Loans overtook Wells Fargo as the biggest home mortgage originator and there is a classic for instance of a non bank triumphing.

Meantime, at Venmo over 40 million of us have used it to move money and that’s a prime example of a fintech gobbling up what would have been checks in decades past. Now it’s bits and bytes and a mobile app. A growing number of consumers simply do not make use of a traditional FI account except as a parking spot for deposits and a landing place for a Venmo account.  Millennials tell me they are paying their rent and many of them are continually hunting for still more places that accept Venmo. That has to scare a traditional banker.

Apple meantime has circled back into the fintech arena with Apple Card and know you will lose some members’ patronage of your credit card as they shift their loyalties to Apple’s.  They may continue to carry your card in their wallets but if it goes unused, what good is that?

Fintechs increasingly are biting off parts of the traditional FI pie that they deem especially tasty and lucrative.

And they may be leaving behind the tasks they deem labor intensive and low profit for traditional FIs to do.

What good is that kind of future especially when it is a future written for credit unions, not by them?

New Pymnts research enters to slap us in our faces: “just 6.5 percent of FIs in the study said they considered FinTech firms to be their competitors, far fewer than in 2017 (19.7 percent).”

How can that be? Financial institutions are losing the mortgage market – a traditional backbone of many community banks and credit unions – and they are losing it to non banks, which, incidentally, offer substantially better and faster technology and decision making.  Why wait a week for a credit union’s yea or nay on a mortgage app when a fintech will give its verdict in a matter of minutes.

There are more puzzlements in the Pymnts research.  For instance: “In 2018, it took longer to bring new features to market than in prior years. For 46.7 percent of those surveyed, it took seven to 12 months to launch innovations in 2018, compared to 33.3 percent only taking one month in 2017.”

We – clearly – are in a culture of now. That is why in the Apple Apps store there are continuous improvements in apps.  It’s ongoing. Except at financial institutions where “not broken” seems to equate to “good enough.”

FIs point to infrastructure issues as the culprit behind the delays: “In 2018, IT infrastructure was cited as the biggest barrier to innovation (37.8 percent). Community banks (45.6 percent) were far likelier to claim IT infrastructure as a hindrance than credit unions (CUs) at 35.1 percent or commercial banks at 32.4 percent.”

But that honestly is not good enough.  Fintechs aren’t burdened by infrastructure barriers and neither – in many cases – are money center banks with huge IT budgets.  Shrugging off infrastructure as an acceptable excuse for delays just may be pushing consumers to more fleet footed competitors.

A still more worrying observation about the future is here: “A report from Capgemini has found satisfaction is low in customers and banks need to up their levels of personalisation if they want to keep customers from turning to tech giants and fintechs.”

It gets worse: “According to Capgemini, 32.3 percent of customers would consider turning to large technology firms for financial products and services, especially as younger, more tech-savvy customers are looking for options that suit them most.”

So, how’s that ignoring fintechs working for you now?

How Credit Unions Can Win the Fees Fight

By Robert McGarvey

Want to pick a fight you should win? Everytime? Even when battling the biggest banks?

That’s a real probability for credit unions that pounce on an opportunity that could bring them notice of their generally lower fees by consumers hunting for a financial institution that clicks exactly that box.

Surf over to TrueFees and ponder the possibilities. Founder Ben Premo is building out a consumer facing search site where consumers in many cases would find their better deal will be a credit union and that is because Premo lets the consumer search for a financial institution by any of 10 different fees, from monthly service fees to overdraft fees, even foreign wire transfers.

Premo said that when he’s looked for that info on financial institution websites, maybe half of the banks he’s investigated did not post that info or if they did, it wasn’t readily visible.

Credit unions – most of which still offer free checking – are much more transparent about their fees or lack thereof.  But even credit unions may be less than forthcoming about fees for wire transfers, cashier’s checks, and similar.

So he set about building TrueFees where a consumer can input a zipcode and be shown the institutions with the best deals.

He also said he is looking for credit unions that want to partner with him, paying a fee only when a consumer actually opens an account.  There’s no charge to get entered into the database. “Truefees will bring exposure to financial institutions with low charges,” says Premo.

Right now, digital only banks are the primary players at TrueFees but Premo is insistent he wants to change that by adding info about more credit unions.

That is a possible way to change today’s playing field which is one where the big institutions generally win.

Most new checking accounts open at the predictable, mammoth institutions, the ones with big marketing budgets and lots of TV advertising.  Are they the best deal for an average consumer?

Absolutely not, certainly not for the 98% of us.  

At Chase, Total Checking costs $12 monthly. It can be free if the consumer maintains a checking balance that never dips below $1500, or $5000 in linked accounts (such as savings).  That sounds good until you remember that four in five of us say they live paycheck to paycheck.  You might as well tell them the minimum balance for free checking is $1 million.  They can’t manage $1500 any better than that million.

The consumer’s best chance at free checking with Chase is to arrange a recurring automatic deposit of at least $500 monthly. That will do it. But not everybody has an employer or similar willing to play along.  

So get ready to pony up $12 monthly.

At Affinity Federal Credit Union in New Jersey – where I do most of my checking – a checking account is free. No minimum balance required.  

At Chase the overdraft fee is $34.  Affinity charges $33.

But a growing number of digital banks and some credit unions, said Premo, charge nothing or a nominal fee for overdrafts.  If overdrafts are a personal problem, look for a provider with small or no fees and that’s where the TrueFees search tool will prove valuable.

Don’t be shy, either.  In 2017, overdraft fees paid by Americans hit $34.3 billion – that’s billions. It’s money that does not need to be spent.  (Grain Technology, by the way, has a tool that could absolutely end overdrafts. Hear the podcast here.)

Fee specificity, by the way, is an obvious hook for TrueFees: the consumer can drill down to exactly what fees interest him/her. Personally I have never wired money abroad so fees for that are inconsequential to me but for those who regularly wire money abroad – and I know people who do that to India, the Philippines, Mexico, and in years past, Ireland – it’s potentially easy to hunt for nearby institutions with attractive charges for foreign wires.

A plus for the consumer who uses TrueFees to find and open a new account is that TrueFees will put a $25 bonus in the consumer’s pocket.

Check out TrueFees. It just may be a smart way to find a game where credit unions are destined to win because most truly offer the better deal.

A CU2.0 podcast with Ben Premo where he talks at length about TrueFees posts in mid May 2019. Find it here.

CU2.0 Podcast Episode 32 Mike Edwards WOCCU on International Trends

Quick now, what country has the highest participation in credit unions? Say the US and you are wong. According to Mike Edwards, senior vice president for advocacy at the World Council of Credit Unions, it’s Ireland, north and south, where 70% belong.

In this podcast he tells why that participation is so high.

He also tells why many regulatory matters in the US in fact originate overseas – risk based capital, Bank Secrecy Act requirements, AML, and more got their start overseas and that is why Edwards spends much of his time monitoring and attempting to influence regulations overseas.

What happens in Basel does not stay in Basel.  It may and probably will wind up in the US.

Listen in. You’ll learn a lot in this podcast

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

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