Compliance

Cheney: Look to the Future With a Common Purpose

By sharing a single vision, CUs could positively influence many more consumers.

June 19, 2012
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The state of the credit union industry is “outstanding,” with $1 trillion in assets and the addition of two million new members over the past 15 months.

But by sharing a single vision, credit unions could influence many more lives toward financial well-being, CUNA President/CEO Bill Cheney told the America’s Credit Union Conference (ACUC) Monday morning.

Speaking on the “state of the credit union industry,” Cheney noted that credit unions face such regulatory burden and “partisan gridlock” in Congress that they will need to collaborate and look to the future with a common purpose and vision dedicated to the financial well-being of their members and all Americans.

He announced several initiatives to address the future.

“For too long we’ve let others define what credit unions are and what we should be,” Cheney said, adding that CUNA is close to rolling out a new vision for the credit union movement based on “common values that can be building blocks for the future: People helping people and people before profit are part of our foundation. We’re all member-focused, cooperative, not for profit.

“These common values and purposes create a vision all credit unions can play a part in,” he continues. “What if we could agree on a vision that Americans choose credit unions as their best financial partner? A vision that can lead from today’s combined 95 million members today to 100 million?”

However, only half use credit unions as their primary financial institution, “so we have a long way to go,” he said.

Credit unions should work to create awareness and foster service excellence. That means fostering collaboration on a large scale--with 95 million members, 7,200 credit unions with $1 trillion in assets “all with the same goals.”

Cheney noted that too many say that credit unions are less accessible because of membership requirements, less sophisticated, and less convenient, and “we know nothing could be further from the truth.”

CUNA will be working further in the coming weeks on the vision and how to communicate it, get feedback and measure its progress. One way being considered is adding member value.

“Credit unions deliver $6 billion in value to members. What if in 10 years we could triple that?” He noted it has taken 104 years to get to the $1 trillion asset mark, but in 10 years it could be $2.5 trillion.

Cheney also addressed legislative and regulative issues, noting Washington’s current “partisan gridlock is a disservice to the people who elected” their representatives, and the current pendulum of regulatory burden and oversight in credit unions’ examinations and supervisions continues to swing.

There have been times when credit unions could deal with the level of regulatory burden and times when it got tougher. Now, he said, there are “glimmers of hope” such as NCUA’s 11th hour changes to the Troubled Debt Restructuring Rule following input from a CUNA/league working group.

The changes “will save credit unions millions of dollars in regulatory compliance costs” and help keep members in their homes.

But credit unions “have our work cut out for us” with the “tens of thousands of pages of new regulations” expected under the new Consumer Financial Protection Bureau, which could cripple community-based financial institutions.

“How do you ‘simplify’ regulations with new regulations?”

Cheney announced that CUNA would be rolling out a new initiative: Operation CONTAIN to “contain oversight and needless rules to achieved improvement (in the regulatory burden) now.” Operation CONTAIN “will need your help,” he told the 1,300 conference attendees at ACUC.

On the legislative side, credit unions are “fighting the calendar” with Congress’s session nearly over. “We have legislation we want to advance,” referring to the push to lift the member business lending cap to 27.5% of assets from 12.25%. Doing so would inject $13 billion into small businesses and create 140,000 new jobs at no cost to taxpayers.

“Banks are the only group opposing it. Many groups have supported us and we’ve won the public policy argument,” Cheney said.

CUNA is aiming to put together a package to help banks and credit unions in the Senate and House, but “banks would rather burn down Pennsylvania Avenue than help credit unions. That is not playing well in Washington. If we put together a package that credit unions support and that banks should support, then we would have an overwhelming majority fighting the [congressional] calendar.”

Even if a credit union has never made a business loan, it is “extremely important” to support advancing the legislation. “Do you want to be able to determine [your future] in the board room? Or have ABA and ICBA decide for you?”

Purpose Driven Industry

Gary Easterling
June 19, 2012 2:46 pm
A purpose-driven industry needs purpose-driven industry leaders. At United Federal Credit Union our purpose is to enhance community through people, product and place. So my question is, "How can CUNA help me fulfill my purpose?" CUNA is an industry environmentalist. Their purpose is to enhance the environment for credit unions so we may fulfill our purpose. An environment that supports prudential behavior; limitations on investments driven by reserve requirements, risk diversification, sound Asset Liability Management, and consumer-friendly behavior makes sense. The need to enforce good management and the observation of what should be self-limitations on prudent business practices is the role of our regulatory authorities and it is appropriate for CUNA to assist in creating simple and clear regulations as it relates to prudent management. Limitations that do not make sense are the limitations that restrict our ability to serve. These external restrictions; imposed by legislators and regulators; restrict competition and limit consumer choice. So how can CUNA help UFCU? Help create an environment that permits UFCU to develop a community, an FOM, driven by consumer choice. Allow UFCU to freely make investments in people, product, and place that are prudent and sustainable. A mission with a margin. CUNA, help us create that environment and credit union value will excel!


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CUNA's vision

Bill Cheney
June 26, 2012 2:31 pm
Gary: Thanks for your comments. To your last point, we at CUNA absolutely agree, and what you outline is precisely what our vision focuses upon. As I said in my remarks at the ACUC (and thank you for commenting on them), we see a credit union movement that envisions an environment in which Americans choose credit unions as their best financial partner. What that means, of course, is that Americans have the freedom to make that choice, and have clear access to financial services from credit unions that they want and need. As a movement, we are taking steps in that direction now – such as by pushing for increased business lending authority and the ability to raise supplemental capital. But these are merely incremental steps. What we need, and what the CUNA Board is working on, is an ultimate vision of where we can go. In short, as I suggested at ACUC, we should define ourselves and our future – and not let others, such as the banks or regulators, do it for us. Getting to the point of being the financial institutions that “Americans choose as their best financial partner” is not going to be a walk in the park. It will take a great deal of work and commitment. We’ll have our work cut out for us: • We’ll be challenged to remove barriers that prevent us from more easily serving more Americans with the financial products they need, want and deserve. • We’ll be obligated to promote awareness about what credit unions are, what they offer and how they are different (and better) than other financial service providers. • And, we’ll be tested to deliver service excellence to our members. Fortunately, credit union people are no strangers to hard work and commitment. Further, I have no doubt that there will be some differences among credit unions with regard to the strategies and tactics we should adopt that are aimed at achieving the things I’ve outlined here, in pursuit of the ultimate vision. That’s OK. The credit union movement is blessed with a passion for success among its devotees, and with a high number of very bright people with a torrent of very good ideas. But how we get to the vision is less important than establishing and working toward it. That is, something we can all agree on and start moving toward. UFCU wants a mission with a margin. CUNA wants to help set the movement united on the same path forward. Together, I am hopeful we can achieve both of these goals, by developing and maintaining an environment in which Americans can choose credit unions as their best financial partner.


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