This Week’s ES International is Up

By Christian Mullins

In this week’s shameless plug, a new Executive Summary International has been posted for the week ending April 30th.  This week’s collection of seven articles were compiled from Australia, Canada, and Ireland.  Some are favorable to the movement, and some… well, not so much.  I would suggest reading the article on the state of Ireland’s data security problems.

If international CU news isn’t your cup of tea, there’s always the American version that runs Monday thru Friday each week.  Bringing both national and regional stories into focus, all in Executive Summary (short) format, for your convenience.

End shameless plug.

Website Spring Cleaning

By Christian Mullins

It’s spring again! Time to clean out the garage, open the windows, and scare your local refuse collector with the amount of junk you accumulated, then threw out, over a period of 12 months.

Since you’re already in a cleaning mode, here’s a few quick tips to get your credit union’s website back in peak condition:

Clean Out The Garage:

Believe it or not, your homepage is a lot like your garage; it’s the gateway into your world. If you take care of your garage, it looks clean and organized. If you don’t, it looks like, well, a garage, and it needs to be cleaned out.

Not every deal, special, or announcement needs to be on your homepage, just the most important ones. Aren’t sure what should stay and what should go? Take a look at your web reports and bury the links and ads members don’t use.

Mow The Lawn:

There’s nothing like the sight of a freshly cut lawn. It’s even and tight, and it feels nice just to stand on it (ok, maybe that’s just me). The same can be said for your homepage.

Much like your garage, this is about getting rid of excess. There’s a theory that your homepage should fit inside your member’s monitor. No scrolling. While I don’t know if that’s realistic, try to keep your site’s homepage as close to one screen as possible. It’ll look nice, and members might even see what the bottom of your page looks like before clicking on their desired link.

Clean Out Your Refrigerator:

There’s nothing more vile than a refrigerator with its own ecosystem, so it’s time to toss the cottage cheese that went bad in 2006. And when your fruit pulses, it’s time to don some rubber gloves and do some dirty work. It’s thankless, but it saves the embarrassment of someone drinking three week old milk.

Double checking every… single… hyperlink on your website is no glory job either, but it has to be done. External links change all the time, and some of the internal links may have as well. Once it’s been done once, you can hand the job off to someone else to do monthly. By that time, it’ll be more like dusting (no one notices when it’s been done, but everyone knows when it hasn’t) than fridge duty.

Tend Your Whole Garden:

There’s more than one vegetable in the garden, but if you only weed around the carrots, your tomatoes will suffer. Likewise, there’s more than one web browser out there.

The top three web browsers in the world today are Firefox (37.0%), Internet Explorer 6 (30.1%), and Internet Explorer 7 (21.9%). Your website may look pristine on one browser but look a little messy on another. If your website looks good on both Firefox and Internet Explorer (6 or above) you’re in good shape.

Reevaluate Your Wall Art:

Much like music, art is in the eye of the beholder. However, most would agree that a movie poster held up with thumbtacks will draw the kind of attention you don’t want.

Clip Art is along the same vein. In the early days of the Internet, clip art was as good as it got; it didn’t use a lot of memory and dial-up surfers weren’t left behind. With most of America on DSL or better, it’s time to upgrade to photos. It looks nicer and won’t give your site that antiquated feel.

Invite Some People Over:

Now that you’ve cleaned, invite some neighbors over. If you don’t, they may glance over when they drive by, but since they already know where they’re going, they probably won’t notice.

If your credit union offers online banking, make sure the only way your members can access it is through an embedded link on your homepage. Otherwise, they may have bookmarked the link rather than your homepage and they’ll never know what you have to offer.

Checks, the environment, and an ugly phrase

By Christian Mullins

Last week, Earth Day came and went to worldwide (or at least Northern Hemisphere) fanfare. Making two very blanketed generalizations, Earth Day proponents call attention to global warming, humanity’s collective carbon footprint, and what’s being done to counteract it. Those who oppose Earth Day do so because they don’t believe that pollution is the root, or even a significant cause, of rising temperatures. Regardless of how you feel about Earth Day, the environment, and global warming, one thing is clear: There is a lot of money in it.

I first heard about ‘checkless’ checking accounts about 7 or 8 years ago, give or take a couple of years. They were designed for people that had problems with too many overdrafts. Given all the rights of a checking account, including a debit/check card, they were denied access to paper checks. In short, they were designed to help save members from themselves. A quick search on Google shows that not much has changed in the last decade or so, and they’re still primarily offered as an account for those with a history on ChexSystems.

Last week, on Earth Day, Boeing Wichita CU in Kansas introduced their ‘Green’ checking account. They’re not the first CU to have one, and they’re not the first to call it Green. Rather, it has all the same properties as a checkless checking account with electronic statements and online bill pay (which probably was already available as an add-on). For BWCU, introducing it on Earth Day was a savvy marketing move, though they don’t need me to tell them that.

Data from Forrester Research Inc and Aspen Analytics supports the belief that consumers will sign up for ‘environmentally beneficial’ products. And with more and more ‘environmental’ checking accounts available to members, it’s imperative that your credit union introduces this product before your competitors.

It really is a win-win situation. Members benefit from the belief that they’re reducing their carbon footprint. Credit Unions benefit by saving on check processing charges and the accompanying hassles.

And the phrase that inspired this post is incorrect. By turning a checkless checking account into a Green account, you really can put lipstick on a pig.

Framework for Carpool/Public Transportation Incentive

By Christian Mullins

This is a follow up post that provides the framework for a carpool or public transportation incentive for employees. It is by no means a final product, rather, the framework provided can be modified to fit your needs (and procedural writing style).

Purpose: To encourage environmental awareness through public transportation and ride sharing.

Subsidy: Employee choice of

a. Cash/Gas Card
b. Bus/Subway/Rail Pass

Determine the Cash/Gas Card Subsidy:

The incentive can be determined using the following formula:

Shared Miles (round trip) / 2 / 22 (mpg) * Price of Gasoline

(Note: This formula assumes that there are only two passengers in a vehicle. Additional passengers would require a revised formula to account for varying shared miles and additional gasoline saved. If you’d like a customized formula to suit your situation, email me and I’ll be happy to provide one.)

Shared Miles indicates the number of actual carpool miles.

‘2’ is the number of passengers carpooling (See note)

22mpg is the average that all US passenger cars achieved in 2007, according to the U.S. Government.

Price of Gasoline should reflect costs on either the first or last day of the month.

Using this example, two employees carpooling 40 miles (20 miles each way) for 22 business days at $3.25/gallon would each be subsidized $65 for the month.

Carpool log sheet:

Each employee completes a monthly log sheet containing the number of shared miles traveled and the number of passengers on that trip. The employee would submit the sheet at the end of the month; management would calculate the subsidy and disburse the cash/gas card.

Again, this is just an example and can be modified to suit your credit union’s needs. For example, it may be prudent to cap the incentive at $50/month, or subsidize half of the gasoline costs (cut the price of gas number in half).

One last note.  Other factors, such as taxation of disbursements, may be relevant, so be sure to contact your Human Resources Department for clarification before proceeding.

Offer Your Employees an Environmental Incentive

By Christian Mullins

Gas prices are soaring. While this is something that can be said to describe almost any moment over the past several years, it appears that the American consumer has reached their breaking point. With gasoline at it’s highest historical price (even after inflation has been accounted for), the Federal Highway Administration is estimating that traffic levels fell 1.4% last year. Even more dramatic is news that the Energy Information Administration estimates that gas consumption will decline 0.3% this year, the first annual decline since 1991.

People everywhere are concerned about energy prices, and, as a credit union, you have the ability to give your employees peace of mind while positioning yourself as a pro-environment institution, all for a minimal cost.

If your credit union is in a city that offers public transportation, offer to subsidize the employee for part or all of its monthly cost. Even with public transportation available, it is also prudent to offer a ‘car pool’ incentive, for those that either live in areas that don’t offer public transportation or feel uncomfortable riding in a bus or subway. Doing so offers several benefits.

First, it won’t cost much. Even fully subsidizing your employee’s monthly public transportation pass or offering a set amount for car pooling won’t significantly affect the bottom line.

Second, once you’ve offered the incentive, employees will view your credit union as taking positive steps towards being more environmentally friendly. Studies have shown that employees, in general, are happier when working for a company that tries to make a positive impact on the environment.

Third, without any urging, your employees will tell your membership about it. Bus passes and car pools are a small step, but like employees, the public may be more willing to utilize a company that is actively trying to reduce its carbon footprint. While some credit unions may go much further and make the environment a central theme of their credit union, like Vancity in British Columbia, your membership will appreciate every step taken.

With energy costs at a premium, disposable income is shrinking for everyone, especially for those living paycheck to paycheck. Offering employees an incentive to voluntarily reduce their energy output is not only environmentally sound, but may give them some assurance that their credit union is looking out for their best interests. If it’s a success, you can display your results (e.g. gallons of gasoline saved, carbon not released into the atmosphere), in your newsletter.

There’s an old adage: People love their cars. But they also love a little cash in their pocket, something that’s harder to come by these days. Offering your employees an environmental incentive will allow them to make the choice between freedom and disposable income. Even if employees don’t accept your incentive, they’ll appreciate your offer.

CU News Briefs has moved

I’m happy to announce that CU News Briefs has been given its own blog, effective today.  The blog’s name is CU Executive Summary, and, beginning Wednesday, will also include a weekly international recap of the top headlines.

It was becoming increasingly obvious that the two styles (news driven and analysis) didn’t coalesce well from a visual or content standpoint and each would benefit their own location.

Thank you to everyone who suggested a split, and my apologies in advance for the shameless self-promotion that is sure to adorn one blog in reference to the other.

Christian Mullins

CU News Briefs - 4/18/08

By Christian Mullins

Executive Summary:

Several lawmakers have introduced bills that, if approved, would reshape the credit card industry. The Federal Reserve will also propose regulatory changes later this spring, with final implementation by years end. Retroactively increasing interest rates, excessive fees, universal default, and double-cycle billing have all come under scrutiny in recent years and will be the target of the legislation.

Kentucky Employees CU, a $44 million asset financial in Frankfurt, Kentucky, has informed Frankfurt police that $151,000 has been unlawfully taken from their credit union. The funds have been missing since approximately September 2006. Officers are currently inspecting records dating to that time and before, but cannot comment on an ongoing investigation.

Robbed:

• GHS FCU, Greenville, North Carolina. Thieves using a Bobcat or similar equipment ripped an ATM from its foundation early Thursday morning. The incident, the second ATM robbery of its type in several weeks, was caught by surveillance cameras.

Arrested, Arraigned, Charged, or Sentenced:

• Janet Keys, a former auditor at Mississippi Public Employees CU, has been arrested in Jackson, Mississippi for allegedly embezzling $72,000 from May 2004 until May 2006, using the money to pay creditors.
• Stephen Cuthbertson received a nine year prison sentence Thursday for the robbery of eight financial institutions, including Alabama CU in Tuscaloosa, Alabama in 2007. The robberies occurred in four states.

CU News Briefs - 4/17/2008

Executive Summary:

Juniper Research has announced that worldwide mobile banking will expand to 816 million worldwide users by 2011. In that same year, 37 billion transactions are expected, up from 2.7 billion in 2007. The best markets for growth during that time are expected to be China, the rest of the Far East, Western Europe, and India.

Boeing Wichita CU President Gary Regoli is leaving the credit union, effective May 15, to become President of Achieva CU in Clearwater, Florida, a $630 million asset financial institution. Regoli had worked for Kansas’ largest CU, at $450 million in assets, since 1999. He had spent the previous 20 years in Florida.

Robbed:

• Nothing to report today.

Arrested, Arraigned, Charged, or Sentenced:

• Two men have already been charged with the Wednesday robbery of Coastal FCU in Cary, North Carolina. Desmond Lamont Garrett, 29, robbed the credit union while Thomas Clayton, 16, drove the getaway car. Both men are in custody.
• A woman suspected to have robbed South Shore CU in Cudahy, Wisconsin on April 9 is in custody after robbing a bank in the same area. Nichole Halbrooks was arrested about 25 minutes after the bank robbery when a police officer matched her vehicle’s description to the getaway car.

CU News Briefs - 4/16/2008

By Christian Mullins

Executive Summary:

Southern Traditions CU, with offices in Georgia and North Carolina, announced intentions to merge into Doco Regional FCU, also based in Georgia. Once combined, Southern Traditions CU ($41 million in assets) and Doco Regional FCU ($85 million in assets) will serve 13 counties and 34,000 members.

Tucoemas FCU, of Visalia, California, has been ordered to pay more than $1.5 million to a former executive. The credit union, with over $191 million in assets, was found guilty of workplace discrimination against Kim McGee, a former vice president forced out of her job after being diagnosed with breast cancer. After taking time off for treatment she was demoted, and her hours were cut to the point where she no longer qualified for health insurance. The case, originally ruled in favor of McGee in 2003, was on appeal to the U.S. Supreme Court. The Court declined to hear the case, effectively ending all legal options for the credit union.

Robbed:

• Florida Telco CU, Jacksonville, Florida, Friday. A man approached a teller and demanded a stack of $100 bills. He fled on foot with an undisclosed amount of cash. No weapon was shown, and no one was injured.
• Security One CU, Arlington, Texas, Monday. A man, armed with a rifle, threatened members and staff before leaving with an undisclosed amount of cash. He wore a rubber mask, but gold dental work on his front teeth was visible. No one was injured.

Arrested, Arraigned, Charged, or Sentenced:

• In Fresno, California, police have arrested and charged Aida Hernandez with over 150 felonies relating to a large scale identity theft ring. In the past six months, it is believed that she and three accomplices tapped into 319 credit union accounts. The total losses are believed to be in the range of $500,000. Two of the accomplices are still at-large.

What’s Next For Kansas In Wake Of Expansion Constriction?

By Christian Mullins

Last week, Kansas Governor Kathleen Sebelius signed a bill into law restricting state chartered credit unions from expanding into all corners of the state. Federally chartered credit unions, already restricted from a statewide charter, are exempt from the legislation.

Titled Substitute for SB 535 as it passed through the Senate, it restrains a credit union’s ability to expand beyond one metropolitan area, and Kansas has three: Wichita, Topeka, and Kansas City. In addition, credit unions located within these metropolitan areas can expand into contiguous counties only until the total population of those counties reaches 1,000,000.

The new law will affect 9 out of 60 state chartered credit unions when it goes into effect on July 1, but its real power will come 10-20 years from now, when population trends further inhibit expansion. While this is far from a ‘fatal blow’, Kansas credit unions need to find new ways to build their membership. Fortunately, the means necessary to do so already exist.

The overwhelming majority of credit unions focus primarily on adding new members, with a secondary focus on member retention. In Kansas, with a finite ability to expand into new population areas, member retention can no longer remain an afterthought. Two ways to retain membership are to join a shared branching network and join a shared ATM network.

In the 21st century, it’s almost a sure bet that the city you currently live in will not be the city you retire in. People change addresses for a wide variety of reasons, and if their credit union has a location near their new address, the likelihood that they will change financial institutions decreases. Shared branching, with the ability to have locations all over the state and country, can serve that purpose. However, with only 4 shared branches in Kansas, all in Wichita, there’s a lot of work to be done. It isn’t impossible to add a lot of locations in a short amount of time, though. Maine was able to add 80 shared branches, all within existing credit unions, in four years. Today, 28 credit unions in Maine have more locations than the largest bank, and there’s no reason to believe Kansas can’t achieve the same results. Reducing lost members by even 10% should have a noticeable positive impact on overall membership growth and its benefits.

ATM networks operate along the same principle. If a credit union belongs to an ATM network, their members can generally use any of the network ATMs without paying a surcharge. CO-OP Network, with 25,000 ATMs nationwide, already has a strong presence in Kansas, meaning members that move away from their credit union can still access cash without a fee, even without a prominent shared branching network in place.

The legislation in Kansas is only the first salvo, as bank-supported legislators are sure to introduce similar bills in other states. If successful, credit union expansion can be curtailed, but with shared branching and regional/national ATM networks, it will fail to stop credit union growth.