By Frank J. Diekmann
Some odds and ends from the Reporter’s Notebook while waiting, and waiting, and waiting, for the pandemic to end.
Musical Chairs, Without the Music
In the days when people also spent much time at home, but not because of a pandemic but instead a lack of entertainment options, they were called “parlor games,” often word games but also hypotheticals and conjecture. Such games were never played more often than in Washington, and that includes credit unions.
For instance, this observation related to the appointment of a new NCUA board member, Kyle Hauptman, whose nomination is up for a vote this week.
Geoff Bacino, who served on the NCUA board in 2001, noted in his newsletter that if Hauptman is seated, it will set up an “interesting dynamic” should Joe Biden be elected president. Bacino pointed out current Board Member Todd Harper would likely be elevated to chairman in 2021. But Hauptman’s term is to expire in August 2025 and current Chairman Rodney Hood is to serve through 2023—both are Republican appointees—meaning a Chairman Harper would be in the minority.
“It would make for some interesting horse-trading, or it could mean the chairman of NCUA could see few, if any, of their proposals come to fruition,” wrote Bacino.
The Things You Learn
Sometimes, while poking around on a credit union’s website, you can learn some fun and interesting things, especially given how CUs reflect the broader marketplace in the U.S.
For instance, this: O Bee Credit Union in Olympia, Wash., got its start in a shirt pocket and its name from a fear of carpel tunnel syndrome.
The credit union was chartered in 1955 after Ted McGill, a worker in Bottle House “A” at the Olympia Brewery, heard about credit unions and thought it would be a good idea for the brewery workers to start one. Hence, that’s just what he did, and in the early years Ted was the credit union.
“He would walk around the brewery with membership cards, loan applications, and receipts stuffed in his shirt pocket. Some say it was like the whole credit union was in that one pocket,” O Bee explains on its website.
McGill also gave out share withdrawals and loans right there on the bottle house floor.
But as O’Bee explained, “The credit union was named ‘The Olympia Brewing Company Employees and Families Credit Union.’ Ted, who was afraid he would have to write that name by hand ‘at least 40 million times,’ objected strongly and countered with ‘O Bee Credit Union.’ The name stuck and history was made.”
Now, as a certain radio personality used to say, you know the rest of the story.
You Were Warned. Are You Feeling the ‘Chill?’
For years credit unions have been warned by many analysts that it was just a matter of time before we reached the so-called “tipping point” with payments. Many people dismissed such predictions, noting how some have had entire careers pass by with predictions the “cashless society” is just around the corner. The coronavirus pandemic has now greased the timeframe for digital service acceptance, and that includes payments.
For example, Chick-fil-A has announced it’s among the latest to go cashless, joining numerous other retailers. The effort is designed to reduce risks around the coronavirus. “While some stores are simply encouraging the use of mobile or credit card payment, other stores are restricting the use of cash altogether,” Business Insider reported.
The hugely influential Walmart, meanwhile, recently announced that due to the nationwide shortage of coins, it is encouraging all customers to pay via card.
And that’s not all. As CUToday.info has been reporting, both PSCU and CO-OP have been releasing weekly analyses of member card spend data. PSCU pointed out, for example, that one week it found Amazon credit purchases were up 51%, and Amazon debit purchases were up 135% year over year.
For many years representatives of CO-OP cautioned credit unions over the importance of being “top of wallet” (I’m pretty confident that early on there were some execs and board members who didn’t really understand what the phrase meant).
Now, everyone better know, especially as the pandemic has led to significant increases in sign-ups for Netflix, all the other new streaming services, Amazon Prime, Uber Eats and all the other app-based delivery and service providers. You know that new entry in the American lexicon, “Netflix and chill?” The chill part is being made possible by a monthly payment on a plastic card.
But that phrase has a different meaning if your CU isn’t the default card being used in all those payments.
The chill you’re feeling is all that volume going to another provider, and if doing something about that to change member behavior isn’t a priority for the second half of your year, it’s not going to be a warm winter.
Pat, I’d Like to Solve the Puzzle
Each week seems to bring news of another credit union merger and with it, the disappearance of some of the unique kinds of names from fields of membership past. And that includes the kinds of acronyms created when “brand” wasn’t such a thing and that sound like clues from Wheel of Fortune.
A good recent example: A merger between West York Area School District Employees FCU and First Capital Credit Union in New York, which has meant the end of WYASDEFCU (which comprises a third of the alphabet). I suppose the news of the merger was embraced primarily by the person who had to answer the phone.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.info or @FrankCUToday.