Know–and focus on–your membership.
by: Moisette (Tonya) Sweat
In the aftermath of the nation’s recent economic woes, credit unions now face the potential for new capital demands and plenty of other forms of increased regulation.
More specifically, the National Credit Union Administration is working to “modernize” CU risk-based capital regulations. As financial institutions that must base their net worth on retained earnings raised from member deposits, credit unions can find these capital requirements daunting. Plus, the Consumer Financial Protection Bureau is revising regulations formerly issued by the Federal Reserve Board, adding increased disclosure or reporting requirements.
Knowing a credit union’s own, unique membership is the key to overcoming the burden of regulation, including the coming impact of a new capital rule. Every credit union should know who its current members are; who its potential members are (or at least where to find them); and the products and services its members need, want, or use most.
By knowing its members really well, a credit union can determine the social and financial behaviors most prevalent within its membership and the financial products and services that best enable those behaviors for provident and productive purposes. Credit unions unwittingly already possess much of the information.continue reading »