Credit Union Times - Centennial Edition - (Page I19) oPiNioN CeLeBrAtiNg 100 YeArS , SPeCiAL CeNteNNiAL editioN CUs Mark a Century of Service as a ‘Value System’ One hundred years ago, a small group In fact, the dual-chartering system of forward-thinking people recognized thrives today because of these challenges. the inextricable value of a memberNAFCU was founded in 1967 out of a desire owned, nonprofit financial institution by federal credit union leaders to have an and the nation’s first credit union, St. independent voice in Washington that Mary’s Cooperative Credit Association, would focus exclusively on the needs and was born. issues of federal credit unions. Since that time, credit unions have The first major victory for the associacelebrated many milestones. Perhaps tion came in 1970, with the creation of the the most noteworthy is that credit unions NCUSIF. More recent accomplishments have continued to uphold their memberinclude the preservation of credit unioncentric focus with steadfast commitment member reaffirmation rights in bankruptcy and great results. Credit unions overproceedings and the overturning of the whelmingly outpace banks and thrifts in California credit card law that would have member satisfaction. These are not required credit unions to make onerous NAFCU’s results but rather those of the Fred Becker is presidisclosures to their members residing in Consumer Federation of America, For- dent/CEO of the that state. National Association of rester Research, Foresee Results/Forbes. There are still many issues that we Federal Credit Unions. com and even American Banker, which must continue to fight to advance the have uniformly found that credit unions credit union agenda. Capital reform and rank highest in customer satisfaction. member business lending are just two examples of how Perhaps in one of the most critical areas affecting our credit unions could further assist our great nation is economy today–mortgages–credit unions have proven recovering from the current economic malaise. their worth at serving minorities and individuals of Speaking of the economy, there is a clear silver lining lesser income ($40,000 annual income or less). In 2007, in the clouds and we are it. for the 13th consecutive year, credit unions’ approval In the thick of the financial upheaval, federal credit rate of minority mortgage applicants exceeded banks unions are a beacon of hope. They continue to offer and thrifts. members great rates, excellent service and the confiThese findings underscore my belief that as we rec- dence that their deposits are federally insured, carrying ognize a century of service of credit unions, it is about the full faith-and-credit guarantee of the U.S. governmore than a sector of the financial services industry, but ment. While certainly no one is immune from some it is the perseverance of a value system. impact in this economic crisis, compared with the rest of This value system has served us well over the years the financial services industry, credit unions are doing as we have faced challenges on many levels and it con- well. tinues to serve us well today. Banks and other financial I am particularly encouraged by the recent data on institutions represent formidable adversaries. As they the mortgage market, which shows that our share of the have seen their market share eroding, they have mortgage market jumped to 3.6% from 2.9% last year. In launched aggressive efforts to thwart credit unions’ addition, the figures also demonstrate that the average prosperity and continued development. amount of first mortgage loans has continued to rise for (Continued from previous page) dition of adding value to the credit union charter. Looking forward, I see more than just changes in the playing field. Rather I see a tectonic shift in the consumer financial services landscape. I see new mountains, new valleys, and new oceans of uncharted waters. Spreads will continue to narrow, the costs of compliance and serving an ever-expanding array of member needs will continue to rise. Combine these trends with the fact that a significant portion of current credit union leadership will likely retire in the next seven to 10 years and we see more rapid consolidation just over the horizon. The remaining credit unions will be key partners in their members’ financial lives, but will be competing with mega trillion-dollar banks. With razor-thin margins in a commodity business, a new era of cooperation will emerge to help improve credit union offerings and efficiencies, so we can maintain capital expansion and safely grow. Our biggest challenge will be remaining relevant with an increasingly divergent member base. We must be able to serve the high tech and the high touch, the youthful and older members, those of modest means and those who need solutions to protect the means they have accumulated through a life of thrift. Credit unions need to be there with trusted advice and high-value solutions for baby boomers entering and managing through retirement. We also need to attract the next generation of savers and borrowers. Neither task will be easy, but both are critically necessary. A century of experience provides us with a wonderful collection of inspirational, real-life examples of men and women who made a difference when there wasn’t even a path to follow. This may be captured best by my favorite author, Ayn Rand, in her quote, “Throughout the centuwww.cutimes.com ries there were men who took first steps down new roads armed with nothing but their own vision.” Now it’s our turn to ensure credit unions remain a viable financial alternative in which consumers have both a choice and a voice. Will we be satisfied with our current course, or will we blaze new trails to ensure members’ financial well being? What will we add over the next 100 years? And how will those who come after us view our successes and challenges? We’re at the strategic crossroad, and the decision is ours. credit unions this year, with a significant increase in the second quarter. Mortgage lending continues to be the greatest source of loan growth at credit unions and I am gratified to see that many credit unions have seized the opportunity in the mortgage market. Most recently, NAFCU lobbied, in concert with NCUA, to secure parity for credit unions in the Emergency Economic Stabilization Act. This legislation increased the level of federal deposit insurance for credit unions in individual share accounts. NAFCU and the NCUA also collaborated to secure the removal of the existing cap on the lending authority of the Central Liquidity Facility, a government corporation established in 1998 to ease credit union liquidity needs. In closing, it is with immense pride that I look back at the achievements of the credit union industry over the last century. I have great gratitude for Ron Rioux, the president/CEO of Saint Mary’s Bank, and his board; Gordon Simmons, chairman of America’s Credit Union Museum board; and Peggy Powell, executive director of the museum, and the many others who have helped capture our history for all to see. Looking ahead, NAFCU recognizes the hard work that brought us to this momentous occasion. We also recognize the steadfast stewardship that we must maintain to overcome the obstacles of our current economic morass and continue to champion our great industry. Today, credit unions boast nearly 90 million members at approximately 8,000 credit unions with total assets over $815 billion. As I look to the 75th anniversary of the federal credit union charter next year, there are clear parallels to the role credit unions played in bringing our economy out of the Great Depression to their role today. To continue growing, credit unions must continue to build on the momentum of the last year and the fundamental values of credit unions, as well as our solid lending and business practices, to bring greater stability and confidence to the marketplace. I see a tectonic shift in the consumer financial services landscape. — Dave Colby (Continued from page 15) Our development efforts continue throughout Africa, Latin America, the Caribbean, Central Asia, the South Pacific and other areas of the world. Currently, we have development programs at work in 16 countries, continuing our history of reaching out to people who need credit unions the most. Some of our most challenging environments, in fact, are home to some of the World council’s greatest progress. In Kenya, a country rocked earlier this year with civil unrest, more than 4 million members are served by nearly 4,000 credit unions. And that level of service is growing thanks to social and legislative changes in the works. The uptick in sectarian violence in Afghanistan continues to make the news, yet we still have established 18 Islamic investment and finance cooperatives– which is what credit unions are called in that country– and five additional points of service to date. In spite of escalating hostilities, more Afghan people are finding new ways to build an economic future thanks to World council’s continuing efforts there. That’s just part of the World council equation, but it contributes to a growing number of credit unions and members served worldwide. Currently, 177 million people are served by more than 49,000 credit unions in 96 countries, and that number continues to grow. Each year we see more people served by cooperative institutions. By allowing members to participate in the financial democracy that membership brings, credit unions enable the personal accumulation of wealth, which leads to financial and social stability. In many cases, credit union movements have formed the very underpinnings of civic society, which has helped support the development of nations. Global credit union development will face its own economic challenges as we navigate through these dark times. We’ll be looking for support, from within as well as outside the credit union movement, so we can keep reaching out to the people in greatest need of credi http://www.cutimes.com
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