A Credit Union Litmus Test: Do Your Members Matter Most?

by: Walt Laskos, Principal, The Laskos Group

This year’s promotional message for International Credit Union Day is succinct and simple, Members Matter Most. It encapsulates the centerpiece of what we all believe makes credit unions different from their peers in the financial services marketplace—or does it?

I’m willing to bet there are a lot of credit union folks who view this banner message as downright fluff, preferring instead to call attention to loan rates and balance-sheet performance. Their belief is that competitive loan rates and the safety and soundness of their credit union are reasons enough to demonstrate the value they offer to their members. And you know; they’re right!

Without exercising a fiduciary responsibility to all members; without safety and soundness; and without competitive rates, the credit union would surely sour the stomach of any consumer. Then again, if that’s solely their focus, then what makes them and their business any different from bankers and a for-profit model?

To be a credit union is to be a financial cooperative with a business model governed by a set of cooperative principles and values. It’s not something we make up as we go along or construct buffet- style, selecting only what principles and values we personally believe should be the guidelines.

Our business model of delivering financial services is to do so within a cooperative framework while at the same time, adhering to a set of rules, regulations and practices designed to maintain integrity and safeguard balance-sheet performance. When you think of it, the cooperative financial model seeks a balance. It’s not a charity nor is it an investment house. It’s not exclusive to the right-brain or to the left-brain but rather a mutual collaboration of balance and cooperation.

With that in mind and ever-respectful of our fiduciary responsibilities, Members Matter Most should really be viewed as a call to action. A lot of us are simply not yet there.

To say, Members Matter Most must start with everyone at the credit union having an appreciation for and understanding of our heritage. It’s more than the way we do business. It’s how we think and innovate, communicate and serve each and every day. It’s embedding that heritage in staff and volunteers through orientation presentations and ongoing discussions and educational sessions. It’s having a poster of the cooperative principles prominently displayed as a visual reminder.

And just as the regulator and auditors ensure fiduciary performance, it’s designating someone at the credit union with the responsibility to ensure that everyone remembers and remains faithful to their cooperative roots and values. If Members Matter Most then, we first and foremost cannot forget why it is that we call them members instead of customers.

Second, we must continually reinforce and fuel this faithfulness each and every day, if not we’ll eventually lose our way—lose touch with our roots. Aviators constantly monitor their flight path, GPS and navigation to maintain a proper heading from their point of origin to their destination. Religions have their creeds that are recited or reflected on each week. And, as Americans, we have our Pledge of Allegiance.

What is our pledge to members and do we express it, verbally as a statement of fact, telling them why, Members Matter Most?

Finally, is our value proposition really all about membership or should it be about ownership?

How do we make “membership” at the credit union distinct and different from every other membership folks have? We all know they carry loyalty cards from grocery stores, gyms, dry-cleaners, healthcare providers, Costco, and Sam’s Club to name a few. Is a credit union ATM card similar and, what does it represent besides competitive rates and safety and soundness?

In an article appearing on Oct 8th in the Credit Union Times, ABA Vice President and Senior Economist, Keith Leggett, was quoted in posing the question to attendees of the CU Water Cooler Symposium, “Are credit unions loosing their soul?”

As reported by Myriam DiGiovanni, Leggett queried attendees, “What is the value of ownership in a credit union? What is it you get to exercise as an owner outside of voting for a board of directors? When you look at that ownership stake, you can’t transfer it, can’t sell it, can’t take it with you. So while you give a great PR line that ‘you own us,’ I don’t see anything being concrete with regard to ownership. On top of that do you treat your members as owners?”

Do Members Matter Most? If they do then we have much more work to do.

We all know that those in the winner circle are there because they are never totally content with their performance. They despise complacency and constantly strive to excel and improve. It’s a never ending process and requires a commitment of time and sacrifice every day.

While we celebrate our success on this observance of International Credit Union Day during this, the International Year of Cooperatives, let’s strive to remain ever-faithful to our heritage so that we might accomplish even more for our owner/members because for us, Members Matter Most.