From Dairyland to Down Under

A Wisconsin CU CEO on sabbatical in Australia finds clues for dealing with challenges facing U.S. CUs.

October 02, 2010
KEYWORDS australia , board , credit , unions
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CU Mag: What are some differences in products?
Sponem: Fixed-rate mortgages are rare because credit unions keep them on their books and they need to manage interest-rate risk. Also, first mortgages have a redraw option.

People can withdraw funds from their mortgages, like a home equity line of credit. Many Aussies apply their entire paychecks to their mortgages and withdraw money as needed.

Australia doesn’t really have checking accounts anymore. You can have a debit card or checks with any account. There’s no Regulation D, an outdated regulation that creates a transaction account versus a savings account in the U.S. There isn’t that distinction in Australia and there doesn’t need to be.

The typical mecu member writes one check per month on average. Australian consumers are much more into electronic payments than we are, partly because it’s so easy for consumers to attach debit/ATM cards to their accounts.

One difference in consumers’ financial behavior is that Aussies will give up anything before they fail to make their house payment. There’s a strong commitment to not being delinquent or being foreclosed on.

CU Mag: What sets apart successful credit unions in Australia?
Sponem: The really successful credit unions in Australia focus on return on assets (ROA), giveback to members, profitability, and managing expenses. That’s their fuel for growth. Less-successful ones rationalize having higher-than-average expense ratios. They’ll say, “Our expenses are higher because we’re serving our members.” But successful credit unions in Australia believe that’s just an excuse for poor management.

Another success factor is having a clearly articulated value proposition that speaks to a segment of the market in a strong way—not just “we serve our members well.”

CU Mag: What’s mecu’s value proposition?
Sponem: Sustainability is a huge concept at mecu. This is defined as promoting sustainable behaviors.

For example, living paycheck to paycheck isn’t sustainable for members, or anyone for that matter. Therefore, the credit union’s mission is to eliminate that habit and make members’ financial positions sustainable by, for example, not raising credit card limits to encourage borrowing beyond members’ means.

Also, mecu contends that how we’re living isn’t sustainable for the environment, so it has taken “eco friendly” to a new level. It measures its carbon footprint as a business and incorporates that into what it does for members.

For car loans, members get the best rate if they finance a car with very low carbon emissions. The less environmentally friendly the car, the higher the rate. And for every car financed, mecu will plant enough trees or vegetation to counteract the emissions from the car for the term of the loan.

The credit union won’t do mortgages on homes of a certain size because of the carbon footprint the house emits. Also, mecu offers the lowest-cost credit card in Australia, and it’s made from environmentally friendly plastic that’s chlorine-free.

Next: Are there similar applications for Summit?

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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