By Christian Mullins
Coming soon to a Friday night near you is an ABC News ‘gotcha’ piece on the perceived excesses of the credit union industry. Presumably posing as vacationers on the island of St. Kitts, the ABC crew observed credit union executives engaging in Caribbean-type activities. First disclosed by Jeffry Pilcher, the segment is expected to air on 20/20 as early as tonight. By all appearances, it’s a smear campaign designed to infuriate America’s credit union members while giving banks a little company in the ranks of the vilified. Since credit unions know what’s coming, the question is how they react to it, if at all. The four reactions below do not necessarily represent what’s best for your credit union, rather they represent general lines of thought that should be modified to best suit your credit union’s circumstances.
1. We weren’t there. If your credit union did not attend the conference, say so. After the 20/20 piece airs, write a short paragraph on your homepage stating that your credit union did not have a representative at the conference in question. Additionally, if your opinion regarding TARP will allow it, include a sentence stating that your credit union has not and has no intentions of seeking TARP assistance. Furthermore, state that your CU does not endorse any credit unions, trade associations, or regulatory bodies seeking to procure access to TARP for themselves or on your behalf. For in-branch members, a small leaflet should be made available to any members that mention the report. Be sure that you don’t throw any other credit unions under the bus; simply say that you haven’t been a part of anything 20/20 reported.
2. Ignorance is Bliss. Sometimes, a ‘proactive’ campaign quickly becomes an unnecessary campaign. If there isn’t any outcry, there’s no need to stir the pot. This may amount to wishful thinking, but if 20/20 overreaches in their report or the timing coincides with more important events, such as the lowest Dow Jones Industrial Average in six years, it may fizzle before it begins. Credit Unions with weekend hours can gauge the interest (or outrage) of their membership on Saturday, with staff instructed to tell members that either a CU representative will contact them or they should check the CU homepage Monday. The initial reaction by members may dictate how, or if, your credit union responds.
3. Take an offensive approach. I don’t recommend this tactic, because it will likely backfire and amplify any ill will towards the CU industry, however, in fairness to being thorough, any interested credit union could simply write: ABC has long sought to boost their declining news ratings by trafficking in human misery, preferring to enrage its viewers by cherry picking specific instances that will show their target, in this case credit unions, negatively. We understand that if ABC News had investigated the credit union industry as a whole rather than a specific conference, they would have been obligated to report a positive story that doesn’t coincide with their show’s format. While we wish the report hadn’t aired, we do not begrudge ABC for their actions as they have long since abandoned reliable and responsible reporting on a consistent basis. This statement could be written for any news outlet, from Fox to MSNBC and all points in between, as long as the same cherry picking technique is used. Again, this suggestion is purely academic and I don’t recommend it at all.
4. Contrition. If your credit union did attend the conference in St. Kitts, and has publicly stated that credit unions should seek access to TARP, you are in a difficult spot, because fair or not, this report was filed with you in mind. Explain that while your budget allowed for the expense and that the conference, not the location, was of primary importance to your credit union, you realize that some people, including some in your membership, may be understandably upset. Assure anyone who asks that these decisions will be made more responsibly in the future for the benefit of both the credit union and its members.
While everyone that has ever hosted a conference understands that location is the key to attendance, most American’s have rarely, if ever, traveled for business purposes. It’s difficult to understand why a winter conference in Youngstown, OH (sorry Youngstown) is any different than a conference in Las Vegas or Orlando, or why a conference 2,000 miles away should be attended at all. After the 20/20 report airs, some people will lose their faith in credit unions. That’s just the reality of the situation, though I have a feeling (again, this may be wishful thinking) that this report will rile those in the credit union industry far more than the credit union membership.
Good post. Location IS key to holding a successful conference. But that doesn’t necessarily equate to tropical luxury. For example, EverythingCU has held two successful conferences with CU attendees from all over the country; in Portland, Oregon, and Baltimore MD. Both of these venues were perfect. And as good as these two were, the location for our next one is even more relevant to the CU movement, and also doesn’t involve tropical golf.
I also would point out that a lot of folks suspect that 20/20 tonight will not be running this piece based on the way tonight’s show has been promoted so far. When it does air, it might not even be on 20/20; ABC has several other primetime news shows they could air this piece on, at any time.
ABC News has a lame angle on something that is — at most — a minor transgression. It’s possible that they might reconsider airing the segment altogether. Possible, but not likely. After all, they probably don’t want to waste a finished report, even if they realize it’s not the sensationalistic masterpiece they clearly aspire to air.
To add to Christian’s advice (which I think is excellent, by the way), here are some strategic points:
* BE PREPARED – Don’t wait for the calls to start coming in to form a response. Get a plan together and share it with your staff now.
* PICK A SPOKESPERSON – Don’t let the staff talk to the media. If someone — even a member — asks about the exposé, ask them if they are with the media. If they are, refer them to your spokesperson.
* USE FACTS – What is your CU’s annual travel budget? How many trips does the CEO take each year? How well capitalized is your CU? Is your CU on record as expressly being opposed to pursuing TARP money? Find all the facts you can that support your side of the story.
* DON’T LIE – Any attempt to cover something up will backfire. Not “might backfire.” It *WILL* backfire. You can’t count on it.
* STRESS YOUR GOOD POINTS – Did you issue a dividend to members this year? How much do you give back to the community?
* CRAFT YOUR RHETORIC – Finding the most potent, powerful ways to make your points. This increases the likelihood that they are remembered and/or repeated by members and the press.
[Tip of the hat to CUES for their good advice on handling PR crises: 4http://www.cues.org/pls/cuesp/!cues1.main?complex_id_in=3069489.3071923.3072752.12015379.page]
And here are some additional things to ponder as potential points for discussion with members and perhaps the press, depending on the magnitude of fallout following the ABC article:
* Planning for the conference started back in 2006, long before the economy imploded. Had the conference been cancelled, significant penalties would have been incurred, which is arguably a more wasteful option.
* ABC News is picking on a not-for-profit industry that was arguably victimized by the *real* villains behind the crisis? Why isn’t ABC News reporting on the people who caused the problem instead of those dealing with the consequences?
* Credit unions are run by 100% volunteer boards and CEOs who are paid slivers of silver compared to the mountains of gold shoveled on big bank executives. The annual bonus paid to the CEO of a typical large bank will dwarf the entire salary of credit union CEOs, who also get no stock options (because there are no shareholders; credit unions are cooperatives “owned” by their members). Simply put, being the CEO of a credit union is not the way one becomes a millionaire. The vast majority of credit union CEOs make no more than Joe the Plumber.
* There isn’t a credit union in the country — perhaps even the entire world — that owns a corporate jet.
@Morriss – You’re right. Locations are selected for a variety of reasons, and it isn’t difficult to figure out why winter conferences are held in warmer locations, and why summer conferences are held in the Northern U.S. It’s all a matter of climate. Also considering that some attendees were from other Caribbean locations, the St. Kitts location seems to be a smart choice, and I personally don’t have a problem to it.
@Jeff – Excellent suggestions. It covers all of the contingencies that businesses sometimes forget when confronting any negative press. The bottom line for CUs is the more prepared they are for something that may or may not happen, the more likely they’ll approach the situation in a way that minimizes any negative exposure.
Christian,
I was there as a speaker. As a 29 year veteran of the credit union movement this was perhaps the most surreal moment one could imagine.
For anyone who has ever coordinated a conference you can appreciate this.
CUES (who I greatly respect) has ordered phone lines and internet connections and two conference rooms (not in their original contract) so the participants can choose to NOT engage in Caribbean-type activities but rather attend the CUNA OR NAFCU webinars* outlining the details of the Corporate Stabilization program.
I was in the CUNA room. Because of the overwhelming response to the webinar (3000 plus) CUNA switched to a conference call at the last minute, so CUES made PHOTO COPIES (hotel priced photo copies) of the power point presentation AND projected it so no one in the room would know that it wasn’t a webinar.
But here’s the best part. While we are listening to Dan Mica speak, Fred Johnson, CUES CEO, is in the hallway with an ABC camera in his face.
It was kind of ironic. Participants were NOT engaging in Carribean activities at the time of the ambush, but were learning how to “shore up our Corporate network system” in the true cooperative way.
The man on record ASKING for TARP was on the phone in the next room! AND refused to be interviewed by ABC when asked.
I doubt the piece will ever run. If you look at the ABC investigate team’s website – there’s such filth on there http://abcnews.go.com/Blotter/Story?id=3998439 that the credit union story would look like them kicking a nun.
Great crisis management tips though – and you never know so I hope everyone reads this post!
*NAFCU and CUNA continued their struggle for “who’s the best trade association” by airing their webinars at the same time.
Thank you for filling in a lot of the blanks Denise!
While I have a feeling the piece will run at some point, it will only make a significant impact if those that are asking receive access to TARP. Until that moment, the report will be irrelevant, and the timing of their interview with Fred Johnson will only push their report further towards the margin.
If TARP access is granted to the CU industry, however, all bets are off, and I’d expect the piece to air immediately thereafter. At this point, I think that’s what they’re waiting for.
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