By Frank J. Diekmann
Sometimes, you just have to admit that others can say it better than you can. They have perspectives you’ll never share. Experiences you’ll never have. Insights that I wish I had thought of.
So, instead of my banging out a thousand words here, I give to you some keen observations as shared by others during Mitchell Stankovic’s Underground Collision meeting in Las Vegas earlier this week (you’ll find plenty of coverage in CUToday.info’s Fresh Today section).
Here's what some smart people had to say:
Fintechs Are Not Going to Let Up
Fintechs are starting to gain marketshare and big banks spends billions and billions of dollars and guess what, they are going after your members. They are not going to let up and it’s not going to get any easier.
Funding for fintechs last year exceeded $130 billion. The tech budget for the credit union industry combined is $6 billion, The number of fintechs in North America now outnumber credit unions two to one. My guess is we will see that number decrease by a little bit, but the fact is there are a lot of credit unions out there.
Fintechs have knocked credit unions out as the number-one source of unsecured personal loans. Today, fintechs have just shy of 50% marketshare, and there are more fintechs now hungry for other loans.”
--Brian Kaas, president of CMFG Ventures, CUNA Mutual’s venture capital fund
Non-Volunteer Volunteers
We have term limits (for the board). And this has been hugely controversial, but we have compensation for board members. When you are asking a younger person to give up time, to give up vacation time for a conference, you have to compensate them. It’s not a compensation where I’m driving a Tesla. It’s just an acknowledgement of the time and work a lot of board members put in.
--Frank Chinn
Food on the Table Comes First
So, if we know…60% of Americans are living paycheck to paycheck independent of socioeconomic status, what are we as credit unions doing to support that kind of diversity in our membership base? What are we doing to go beyond the traditional credit score to meet that needed and in the time frame of when they are experiencing that need?
How are we making sure we have products for people who need them the most? How are we supporting people in the gig economy?
It’s great that you are offering financial counseling, but if they can’t put food on the table or buy medicine, they don’t need your financial counseling.
–Seth Brickman, QCash Financial
Responding to the McPredators
A few years ago a study said there are only 15 states in the U.S. that have more McDonalds than predatory store fronts. Five years from now I want there to be no predatory lending storefronts because credit unions are meeting their needs.
––Seth Brickman
Dealing With The Russian ‘Bastards’
“In Poland we are not waiting with folded arms for those bastards from Russia. We are all part of the family of credit unions and what we are talking about now is perhaps the most beautiful embodiment of the principle of people helping people.
(After funds were raised to help Ukrainian refugees) Thank you for your open heart and your generosity. There is a lot to do, especially from a long term perspective. So very glad we have so many amazing friends here in the United States. It is something unusual for me and I am very happy to spend some time with you.
– Rafal Matusiak, president of the president & CEO of Poland’s trade association, the National Association of Credit and Savings Unions (NACSCU)
Do the Math
Funding for fintechs last year exceeded $130 billion. The tech budget for the credit union industry combined is $6 billion. The number of fintechs in North America now outnumber credit unions two to one.
–Brian Kaas, CMFG Ventures
Hunt Alone or Hunt Together?
Partnering with fintechs is something I would encourage. Doing it as a group is better than doing it alone. In a planning session I asked the question, 'Do we want to hunt alone or hunt together? We want to hunt together and work with fintechs together.'
–Tony Boutelle, CEO, Origence
Generation Hurry Up
That’s the question, how do we get ahead? I have already lost my 16-year-old daughter. I have to make her use a credit union. She wants the Venmo credit card. It’s really about the speed. For the next generation, is our value proposition enough? Access and service is just the basic stuff to be in existence.
– Jennifer Oliver, president and CEO, SCE FCU
Generation Hurry Up 2.0
I have a 16-year-old son who needed to open a checking account to get a debit card. We had to go to a branch to open a checking account. We couldn’t do it online. It took 45 minutes. This credit union really touts that, ‘We give service.’ Strip yourself of the thinking that makes a difference any more. You are accustomed to providing service to a member group that is different from the group you are trying to recruit. My son told me it took me five minutes to open an account with Coinbase. In 45 minutes of service, we didn’t confirm the mobile number. And I said to him, ‘You have to call the call center.’
–Kris Kovacs, president, Constellation Digital Partners
Different ‘Mental Frameworks’
They are not bound by the thinking we have had for the last 15-20 years. They don’t have the same mental frameworks for assessing problems. A fintech gives you the opportunity to take a whole new look at the problem. I think it’s a matter of using them as an innovation source and getting behind them and getting funding. It’s very expensive to build things from scratch.
–Kris Kovacs, Constellation Digital Partners
What is Our Responsibility?
Alkami just bought a company called Segment and it’s just spooky what you can know about a person. Let’s just assume we do have a complete picture. Then the question is, do you do anything? Do you have a responsibility to do anything? If you drink too much, the bartender has a responsibility to stop you. Here in Vegas, if you are gambling too much, they will stop you.
So, in the vice industry there is a certain responsibility that when I notice something that could be destructive to a person’s personal life, they are going to hit pause.
So, what responsibility to we have in our industry? We can see your income and what percentage of your income you’re spending on things. But the first question is, should we even weigh in?
–Stephen Bohanon, founder and CSSO, Alkami
This is Our Responsibility
My bottom line is I do think we have a little bit of responsibility. I’m going to talk about economic abuse and financial coercion related to victims of domestic violence, human trafficking, and those who grew up in the foster care system. I’m not an expert, but I am married to a wonderful lady who works in this space in assisting women and children fleeing domestic violence. There is a financial component here. The stories are tragic.
It’s not a moral dilemma—it’s a moral imperative that we get involved. These things lead to a poor credit history, financial vulnerability, and often forces them into bankruptcy. The long-term consequences are huge.
–Todd Lane, president and CEO, CalCoast CU
It’s Time to Make Room on the Board
I’m on the downhill side of things as far as the board is concerned and I’m happy to say that. Too often we have board members for whom board meetings become their social club, their once a month meeting with others with whom they have been on the board with forever.
Someone has to have that hard conversation with them. It’s time to make room. We have board members who say, ‘Don’t give me an iPad, I don’t want to work on an iPad. Mail me that 300-page document.’ That no longer works.
– Roxy Ostram, board member, Ventura County Credit Union
We Don’t Need Authorities on the Obsolete
We just had a great conversation on fintechs. Do you think (most board members) understand fintechs? They don’t. So how can you expect to stay relevant as a credit union.
We are starting to do self-assessments. And maybe you don’t have space on the board for various areas of expertise. So, we are creating board advisory positions. And when someone comes off the board we can bring them in.
The next generation isn’t just about being that I’m young. I’m an entrepreneur, I have a tech background. We just heard car loans are going away. So, why do I need a board member who is an expert on auto loans?
–Michael Maxwell, chairman, SCE FCU
‘I Never Thought I Would Have to Say That’
One piece of potential advice I have is to make sure your board really understands the difference between a credit union and a bank. I never thought I would have to say that. I have said to people at NCUA, ‘Give me five ways credit unions are different from banks, and one of them can’t be that credit unions are nicer than banks.’ And if members don’t know they’re owners, that’s not on them, that’s on us.
–Sarah Canepa Bang, NCUA
Don’t Wait Until the Parking Lot
I’ve been at board meetings where, after the votes are held, people are asked how to you feel about this and do you have any other thoughts about this. Everyone is asked to speak. Let’s have the conversation in the board room that’s had when everyone leaves the board meeting and then meets at their cars.
–Sarah Canepa Bang, NCUA
Who is the Credit Union Built For?
We need to be the center of their financial lives. We need to be centered on an audience of one. We need a credit union built for them. You build the credit union based on you. Your value proposition isn’t to be the best deal in town, it’s to build the best financial outcome for members.
–Samantha Paxson, chief experience officer, Co-op Financial Solutions
How Much & When?
As fintech evolves, and this is an evolutionary period, the stuff that used to be revolutionary is now just taken for granted. Why is that important? (It raises questions) around how much, when do we make decisions? I don’t know and my guess is no one in the room has the answer, and those who do are selling something.
–Paul James, board member, Kinecta FCU
If You Don’t Know the Difference, Well…
One reason many immigrant communities don’t bank is they don’t trust banks. If you don’t know the difference between a credit union and a bank, you can bet your bottom dollar the immigrant communities do not.
If we want to treat people equally, we have to treat them differently. You have to understand the communities you are serving.
–Selfa Saugedo, board member, Ventura County CU
Not Storybook Ending, But Storybook Lending
We have all grown up with the three C’s of credit: collateral, capacity and character. FICO was invented all those years ago and it has a heavy weighting on the character component. I think what people have to learn is it's like on the commercial side of the business--you have to do more storybook lending.
–Harold Roundtree, president/CEO, UNCLE FCU
Everyone is Not Like You
A lot of credit unions focus on one-size-fits-all, one-product-fits-all underwriting. Micro loans may not occur to you. You have to look at the population, and you have to ask what will work here? Everyone is not like you.
–Scott Lascelles, marketing services, GDS Link, Sertech
You’re Not the Morality Police
Thirty-six states have passed laws on sports betting. It’s here to stay. In 2019, there were one-trillion P2P payments related to sports betting. Your members are doing it. You can’t be the morality police about that, it’s every day.
–Michael Maxwell, SCE FCU
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of several new book, including the brand new “The Last Lyric,” a humorous satire about a murder investigation at the Rock & Roll Hall of Fame in which every line of dialogue is either a classic pop/rock song title or lyric. Available on Amazon, Apple iBook, Barnes & Noble and Smashwords. Mr. Diekmann is also author of a non-fiction compilation of the very best & worst he has seen and heard in covering more than 500 CU meetings and conferences, “501 Name Tags: How Everything You Need to Know About Business Can Be Learned at a Conference & Forgotten in the Trade Show.” It is available on Amazon, Barnes & Noble, Apple, Lulu, and Smashwords