Ode to YES Summit

Well we have reached the two week mark from the YES Summit. As Christopher mentioned we who returned to the Midwest tundra of Madison have finally dug ourselves out of the snow (although my poor car had a less-than-ideal fate of being plowed in for 5 days). I hope that you all have been able to reminisce and take back ideas from our fabulous speakers to those at your credit union. I, for one, learned soooooo much!

It was a real pleasure moderating this year's conference. The rumors are true that credit union people are very passionate in what they do. I could feel the vibe of the whole movement when you all got together to discuss and brainstorm during the interactive sessions, very exhilarating!

Not only did I gain new information and insights from the topics we discussed, but I also brought back a bunch to share with my colleagues who weren't as lucky as to travel to sunny Texas (their loss!). They absolutely love the blog and our CU Community! I can't really blame them; these are great resources to share our ideas, experiences and thoughts on the CU Movement for the Y generation.

Again, it was intriguing to walk around the ballroom and hear all the ideas that were created and discussed among your tables, you all are so creative. Now that everyone's settled back at the office we can discuss ideas you've taken from the conference that you can implement at your CU. I'm very curious to see what you think will work at your organization. I'm also sure that many would benefit from hearing what you're trying and the success (and road bumps) that came along with it. We have bright CU minds that are willing to offer many solutions!

And in conclusion, my Ode:
We've concluded the YES Summit for 2007,
Held in Austin, TX -Jason's version of heaven.

As I sit and reflect at the experience I've gained,
I also revert to the knowledge obtained.

Many great speakers, and presenters who wow'd,
kept my mind reeling when digging my car which got plowed.

Two weeks later, as I trudge through the snow,
I write you this ode, and want you to know.

Dearest YES Summit, I want to thank you,
for giving me tools for youngins at my CU.

I hope that you all have a great week!
Brianne

Awesome Austin

Well it is more than a week since the YES Summit and I am still reveling in what a wonderful experience it was! As a first time moderator of this conference, I had a lot of fun getting to know many of you, listening to the diverse group of speakers, and seeing the results of the interactive sessions. Simply awesome!

I have been involved with many conferences throughout my years at CUNA, but I have to say that this conference was different. Not only were there amazing ideas tossed around, not only were we all invited to participate in a social community that is groundbreaking (in my eyes) but we had fun doing it! The conference was a great mix of information AND interaction. The passion that you have for credit unions is amazing. The enthusiasm that you have to reach young members is stunning. Thank you for your energy! (And I thought trainers were an excitable bunch... I hadn't met the 'marketers' yet.)

As others before me have pointed out, the hard part is implementing what you learned. I have faith in you, in the credit union movement and in the YES community that awesome things will result from our 3 days together in Austin. Know that we are here for you- to help you along the way, to answer questions and just to facilitate discussion. You knocked our socks off last week with your innovative and insightful approaches to the challenges we gave you.
We can't wait to see what you come up with in the coming year!

Happy Holidays Everyone!
Courtney

Execution is the Challenge

Welcome Home YES Summit attendees! It was fun to spend time with you last week! I wish I could have met more of you personally.

Last week some of you were exposed to new concepts and ideas. Others had those concepts and ideas reinforced. We are now five days removed from the conference. According to my experience, much of the emotional high from participating in a conference with people from all over the country has now dissipated as we re-enter our business and personal lives.

What have you retained from the YES Summit? Have you begun to move your credit union to attract young professionals as members and employees? Have you begun to develop a plan that you may execute?

Of course you are saying, “Wait a minute Mr. RecruiterGuy! I just got back to my office. Besides we have the entire end of year and Holiday responsibilities going on!”

Every day past the end of the conference where you do not begin to plan and implement those ideas lessens the chance that you will. Other day to day priorities will take the place of the good intentions, just like our New Years’ Resolutions.

In our conversation, I mentioned “A Players”, “B Players”, and “C Players”. Which are you? Are you strategic like the “A Players”? Or are you more tactical like the “B Players” – or biding time like the “C Players”?

The credit unions that will survive as the credit unions of the future realize the importance of new members and new employees. You are either growing or you are dying. The good news – and the potential bad news – is that you do hold the future of your credit union in your hands. Which will it be?

It is one thing to embrace new concepts and ideas. It is quite another to execute a plan.

Good Luck!

RecruiterGuy is Bill Humbert, Principal of The Humbert Group, LLC and VP/President-elect of the Iowa Senior Human Resource Association. Check out his Web site at www.RecruiterGuy.com.

YES LIVE: Post-Game Show

The YES Summit cast and crew are back in Madison. The whole team will be posting their thoughts on the Summit over the next week or so.

I still can not believe that on Wednesday, we were sitting outside in the beautiful Austin sun eating lunch and then upon returning home, I was shoveling piles of snow and ice. Talk about a rude return!

Anyway, my fingers have finally healed (half joking...) after days of furious live-blogging with my colleague Philip at the Summit. I think we were both a bit unprepared for how laborious it is to craft a coherent post immediately and to try to do it during the following session, which was distracting because they all were so interesting. But the response so far has been amazing. Thanks to all who have read and commented - our site stats have been off the charts.

The Summit was refreshing - I learned a ton and am always inspired after seeing a room of a hundred get energized about credit unions. Every attendee I met seemed to have a number of great ideas leaving the conference!

Also, most impressive has been the response to the YES CU Community, the social network built for the conference and to facilitate an ongoing discussion of better serving young adults. Since something like this has never been done before in the movement, I really had no benchmarks, but just in the last few days, I've seen the membership grow (far past the summit attendee roster number and growing every day), friending going on all over, profiles being customized (I didn't even know that you could do that, so news to me!), commenting and commenting everywhere, group discussions, and some great forum threads.

I think this is just the beginning of something wonderful. Like I said in my presentation - the YES CU Community is the cooperative principle "cooperation among cooperatives" on a new scale...for a new generation.

Thank you to everyone who attended for your enthusiasm and passion for the future of the credit union movement. Onward!

YES LIVE: Recruiting Young Adult Board Members to Attract Younger Members

On the heels of Bill Humbert’s presentation on recruiting and retaining young adult employees, Justin Ho stressed the importance of recruiting young adults at the board level to attract 18-to-30s. Justin is a 20-year-old board member at the USC Credit Union and also a Gen-Y/Marketing Consultant for Glatt Consulting, LLC.

After Justin joined the board of USC CU, he surveyed the other members to note how they thought the dynamics of the board changed. They replied that Justin offered more enthusiastic and honest opinions as well as fresh perspectives and unexpected questions.

According to Justin’s research, young adults can be segmented into three groups in regards to financial institutions:

1. Rate/reward whores
2. Relationship building/service oriented
3. Oblivious to financial institutions

He emphasized the importance of using internet-based incentives to reach out to young adults.

Justin noted that the best place to target Gen-Y is in college. They use the internet more than any other generation, and online banking is the most popular finance web tool. Also relevant is that seven in every ten college students keep the banking provider they use in college. Some examples of how USC CU reaches out to students is to offer free money management classes on campus and leverage Facebook heavily.

The key take-aways from Justin’s presentation:

1. Recruiting younger members starts at the board level
2. Having younger board members can bring your credit union a long way
3. Key to recruiting members of Gen-Y is to first understand them
4. Online resources have made it extremely easy (and cheap!) to access members of this demographic if utilized correctly.

When asked earlier why serving 18-to-30s is so important for credit unions, Justin responded:

The credit union movement will come to an end within a few generations if credit unions to make themselves relevant to this demographic. The biggest wealth transfer in history is about to occur and credit unions need to position themselves to take advantage of it!

YES LIVE: Shopping for Gen Y Employees

As prospective and actual employees, 18-to-30s present a special challenge for your credit union

We’ve heard of how different Gen Y is from previous generations. We’ve heard how much they value their personal time. They tend to pick where they want to leave and look for a job there. They tend to favor the lifestyle side of the “work-life balance," and they tend to want to make measurable contributions quickly.

Bill Humbert, a headhunter who has been a credit union member since before 18-to-30s were born, had plenty of advice for YES Summit attendees for finding those demanding and potentially valuable employees. Like any consumer, he explained, when you shop for workers, you should set goals according to a prospecting strategy, and evaluate candidates almost as you would comparison shop for a new car.

In recruiting, 18-to-30s present the biggest challenge from a marketing/advertising perspective. Gen Y uses a difference communication media, as everyone knows. YouTube, blogs, and social networks such as Facebook are more productive for prospecting for 18-to-30 employees than traditional newspaper ads.

As a bonus, social network prospecting gives employers a unique opportunity to assess the character of individual applicants. Because the members of Gen Y are so brazen about publicizing details of their private lives, employers often can toss out the applications of the poorest prospects, without wasting time interviewing them.

In retention, the biggest challenge Gen Y presents is in its expectation of immediate expectations. Humbert said, “In the old days, you started on the line. Then you might move up to line supervisor, then line manger. Today, because of technology, those steps don’t exist anymore. 18-to-30 employees need to create their own career paths.”

You can assist by “hiring them for their strengths and training to improve their weaknesses,” Humbert said. As an example, he cited General Electric as being a model for professional development. It offers employees six-month rotations throughout organization. At end of two years, based on their on-the-job experiences, you and those more-experienced employees are in a better position to find the best job for their talents.

Humbert also offered the following general recruiting tips

• Make sure that you project the right image as an employer. Your credit union is selling itself in the employment marketplace when it hires. Brand yourself as an employer. "If you don’t, the employment marketplace will brand you,” Humbert said.

• Train your managers to hire--Humbert estimates that 70% to 80% of them have never been taught how to interview or select. “A players—the top 10% of your workforce—are high-impact performers. B players, 60% of your employees, are not the most strategic thinkers. They’re good, solid performers and decent managers who get things done. C players, however, are the employees that you should have gotten rid of or never hired in the first place.

“A players tends to hire As, B players hire Bs, and C players hire Ds, Es, and Fs. But worst of all, As and Bs can also hire Cs, Ds, Es, and Fs if they haven’t been trained.”

• Don’t ask interview questions automatically. Listen and follow up (for example, “you say you’re looking for a position for the next 5 to 6 years, why did you leave your last job before that?)

• Communicate your passion for working at your credit union

• Let your hiring manager do reference checks. That person is a specialist in extracting the information you need to confirm applicant claims.

Humbert is enthusiastic about the value of 18-to-30s as employees. “The generation before mine went to the moon. My generation put a computer on every desk. Gen Y is bringing us immediate information, and I can’t wait to see what they’ll deliver next.

YES LIVE: Create your own Young Adult

What kind of services (credit, investment, insurance, etc) would you offer for an individual with the following characteristics?:

• Male, 27
• $50,000 yr income
• Single parent of 2 children, ages 1 and 3
• Rents apartment
• $5,000 in mutual funds
• $250 in savings
• $8,000 in individual stocks
• $5,000 in credit card debt
• $110,000 student loans
• Would like to purchase new car $20,000 - 25,000 in 6 months
• Wants to pay off debt in 5 yrs

The afternoon’s activities revolve around money management with each table creating three, unique young adult profiles using a mix of cards by random that contained (such as the one above). Then, the groups brainstorm and identify the financial products and services most appropriate for that unique individual.

This exercise is interesting because it’s easy to generalize young adults as needing the same types of products and services, but each individual’s needs are unique. Some young adults may have similar characteristics but have very different needs or financial situations.

The groups proved to be very creative in their responses. And what recommendations did the group come up with for the above example?:

• Auto bill-pay
• Credit card consolidation (unsecured)
• Auto buying
• Checking/direct deposit
• Financial advisor
• Budgeting
• College savings

Before the group adjourned for the day, Jeff Farver of San Antonio FCU walked away with a brand new Ipod Shuffle. He was the first to answer the trivia question – what was the 1^st CU founded in the U.S. and where? Answer: St. Mary’s Bank in Manchester, NH.

A big thanks goes out to Gilbert Niimi of Silver State Schools Credit Union for graciously donating the Ipod.

YES LIVE: Pocketful of Credit Union

Bumper sticker of the future: Stop texting your *&^$%!# financial institution and drive!

Golden 1 Credit Union (Sacramento, Calif.) is in the forefront of the technological wave of the future—mobile banking. Paul Sidhu, Golden 1’s manager of electronic commerce, shared his credit union’s experience with connecting its members to their accounts via their cell phones.

Golden 1 has offered text-messaging access since 2000 and wireless banking since 2002. Both options are free and allow members to:
• View account balances and transaction history
• Transfer funds between accounts
• Pay bills
Users also can look up share and loan rates and branch and ATM locations, and send emails to credit union staff.

According to Sidhu, the credit union provides security by not allowing high-risk transactions and features. For example, “there’s no way you can save your password on the phone,” he said.

Golden 1 has 680,000 members, 180,000 of whom are active users of online banking. Without advertising its wireless access option, the credit union has drawn 10,000 mobile banking users. Of the 1,600 using text messaging, 7% use bill pay and 40% are under the age of 30. Of the 8,500 wireless users, 60% use bill pay and 31% are under the age of 30.

In 2001, Wells Fargo pulled the plug on its wireless program which was limited to Sprint or Palm Pilot users. Learning from this mistake, Golden 1 chose to:
• Use a format that works on all cell phones
• Allow any carrier
• Design a simple format that is east to maintain
• Include a text-messaging option

Although mobile banking is still in its infancy, it is only a matter of time before it becomes widespread. In the U.S. 73% population owns a cell phone; among 18-to30s, the percentage rises to 90%. More surprisingly, 84% of cell phones have Internet ability, with an average life expectancy of 18 months.

And in some parts of the world with very limited computer networking infrastructure, such as Kenya, cell phones promise to leapfrog computer networks entirely to provide low-cost wireless transactions. In that regard, Verizon One’s recent announcement that it will eventually allow its customers to use its wireless network with other companies’ devices, software, and applications is a big step toward the inevitability of universal mobile access.

YES LIVE: Payday Loans & Young Adults – Opportunities for Credit Unions

Speaking was Lois Kitsch, National Program Manager of Real Solutions at the National Credit Union Foundation (NCUF). More info: www.ncuf.coop

(Full disclosure: In my previous job at NCUF, I worked with Lois and she is an amazing person – one of the most passionate and dedicated professionals in the credit union movement today.)

Lois discussed products and services that are used by unbanked consumers including millions by young adults. Attendees also heard how predatory lending products (such as payday loans) are used by Gen Y borrowers and how credit unions can offer products that not only beat the competition but help these young members move onto a more financially secure future.

Did you know?

• There are more payday lending stores than McDonalds and Burger King combined.

Credit unions should think about the following when deciding to offer payday loans:

• Target market
• Product mix: Delivery system
• Educator/mentor
• Finding Gen Y Employees
  
• Resources
  

Before the summit, I asked Lois about the importance of credit unions serving young adults and she emphasized the following:

Remember that not all of Gen Y are college students. In this country today, only about 70% of high school seniors actually graduate from high school (7,000 students per day drop out). This dramatically decreases their earning power over the life times. Credit unions must be ready to offer low-cost financial products for this very diverse market niche.

One of my favorite leaders in this area that Lois mentioned is Prospera CU’s GoodMoney Program - GoodMoney is an innovative collaboration with Goodwill Industries of North Central Wisconsin and Financial Information Service Center which placed credit union services in a Goodwill retail store. Here is a short video on GoodMoney:

YES LIVE: “When you say ‘bank’ to a Hispanic person…”

Credit unions will not succeed with working-poor Hispanics, especially the 18-to-30s, unless they engage with them culturally, according to Ed Gomez, executive director of http://www.elbuen.org/newindex.html, in Austin. That means understanding the essential psychology that drives their everyday behaviors.

As Gomez put it, “Most second, third, fourth generation middle-class Hispanics don’t even speak Spanish. They’re not the Hispanic market, they’re flag-waving Americans," which he pegged as 8% to 10% of the Latin American immigrant population. "The most common 18-to-30 Hispanics are young couples who have been in the United States three to 20 years,” Gomez added.

Serving these people requires understanding the “culture of poverty,” the alien background that prevents people from understanding the “hidden rules of engagement.”

Mainstream Americans intuitively know what’s expected of them in different social setting, for example, what a business casual dress code means. Unless your staff is “culturally competent,” they won’t be able to overcome the mistrust that recent Hispanic immigrants have of institutions.

The model of a culturally competent financial institution? “When you say ‘bank’ to a Hispanic person,” Gomez said, “they say ‘Wells Fargo.’”

The California-based Wells Fargo succeeds with young Hispanics because it hired Hispanic staff, including management, and engaged the market by participating in local community events. It made its presence felt on the personal basis and used the relationships it built with community leaders to design products specifically suited to people who operate outside the majority economy.

Gomez explained, “Hispanics function on a cash basis. People in most Latin American countries don’t trust the government because of a history of monetary devaluations. They fear that financial institutions are going to steal their money.” The cash culture combined with the culture of poverty create the seemingly incongruous but common sight of day laborers flashing large-denomination bills.

“If you have a $100 bill, it shows authority, that you are somebody because you have something,” Gomez said.

Here’s his advice for serving 18-to-30 Hispanics:

• Work through community insiders. As with many immigrant groups, Hispanics form enclaves to preserve their cultural identity. Credit union staff must not only speak Spanish, but also understand the hidden rules of the Hispanic culture. Only by exhibiting real knowledge can your credit union become a household name and a brand that Hispanics trust.

• Build personal relationships. Know children’s names, and the lineage of extended families.

• Design products for people that believe that money is meant to be spent. To working poor Hispanics, Gomez said, the future is the next day you get paid.

• Finally, devise a clear strategic plan to engage with the culture. Take part in local Hispanic events, be a presence on the street and in the churches. The Hispanic community has a strong spiritual base that must be respected if your credit union is going to be accepted.

YES LIVE: Holographic Financial Experts and other Ideas

Using the information gathered during this morning’s young adult interviews, attendees worked together to develop a unique product or service for a fictitious credit union to help young adult asset building.

The groups then reported back to the room on their solutions. A theme emerged - Use technology to facilitate in the budgeting/spending process with real-time account updates.

Many of the groups had variations on that idea: the young adult has certain limits preset on their checking account for their budget. Eating out too much? When you get close to your eating out limit, you get an alert (one group even used behavioral modification and had the card shock the user if they make a frivolous purchase!). For those that stayed within their limits, incentives in the form of better savings rates, iTunes cards, or just plain cash was awarded. The tracking could be embedded on the debit/credit card or cell phone (text message or email).

Other interesting ideas:

• A new wedding product for newlyweds with preset packages to choose from in their new lives (MatriMoney anyone?).
• Give incentives for promoting a CU product in different ways on Facebook.
• Give incentives for reading text messages or podcasts from the credit union on a variety of topics relating to asset building.

My favorite “out-of-the box” idea:

MyVab (Virtual Asset Builder) – Guided by a holographic financial expert (either Kramer or Susie), the young adult will be assisted in meeting their financial goals and expenses. They can have a conversation with their advisor at any time (weekly, daily, etc). The group described how a 3-D version of either Kramer or Susie could pop-up at the point of sale to talk (or argue!) about the purchase and it’s affects on the young adult’s goals. Should be ready by the year 2030.

YES LIVE: Real Life Under 30--Michael

Michael, age 24, full-time student

Hasn’t thought much about retirement—“it’s pretty far away.” Would take advantage of educational sessions on weekends, preferably Saturday morning. Needs information about asset allocation. Parents not very helpful. Setting aside 5% of income, which employer matches. Believes he’s on track to have $2.5 million for retirement.

Attendees found that:

• The 18-to-30s they interviewed had no sense of urgency about saving for retirement.

• Got their attitudes about saving from their parents. They consider their parents to be the first source of advice about money. After that, it’s friends, often through social networks.

• Each interviewee was unique. To serve them, credit unions need to look at individual needs.

YES LIVE: Real Life Under 30--Marsha

Marsha, age 23, student

Has no assets to speak of. Has a savings account with $1,500 in it, with “no earthly idea” of the interest rate. Currently has $70,000 in student debt, which she expects to reach $200,000 by the time she graduates from law school. First priority is to become debt-free, which depends on getting a good-paying job. Hopes to earn $80,000 right out of school, but thinks she’ll be paying off her student debt until her mid-40s. Hasn’t thought much about retirement, which will require “hundreds of thousands of dollars.”

YES LIVE: Real Life Under 30--James

James, age 30, IT director

Putting maximum into 401(k)—“If you don’t take advantage of an employer’s match, you're giving up free money.” Also contributes to a Roth IRA every year. Considers a mortgage to be an investment, not a debt. Will compare stock market notes with friends, but 50% of friends are living paycheck to paycheck. Parents self-employed and retired at age 45. Expects to retire at 55.

YES LIVE: Young Adults “Googling” for their Financial Future

Asset Building - that is the focus of the morning.

As I write this, attendees are interviewing local young adults to elicit details about their asset building habits and attitudes about building wealth.

After breaking off into new groups, attendees worked on developing thoughtful, open-ended questions related to asset-building. Each small group (of about six) will have the opportunity to interview two different subjects for fifteen minutes. Seventeen diverse subjects aged between 18-to-30 are being brought on.

This idea is modeled after the “Design Concepts” style of interview, which involves an in-depth interview process intent on drilling-down past the obvious. Attendees will try to understand the young adults’ reasoning, intent, motivation, etc behind their financial habits.

I sat in on one session with Steve, a 29-year-old financially savvy guy. He has a credit union account and likes that they have better rates and great customer service.

This was just one individual I observed, but he seemed to “get it.” He talked about improving his net worth, using a financial consultant, which assisted him in setting up the best:

• Roth IRA for both he and his wife
• A college fund for his ten-month old son (!)
• Savings

Another lesson I learned – smart credit unions should be using Google AdWords. Where did Steve turn when it was time to research auto loan rates? Google. I use it for everything and a few young adults on the panel yesterday stood by it yesterday.

So just imagine a young adult putting in “auto loan rates texas” or “Chicago auto loan” or similar. Wouldn’t you want to be near the top? I’d also make this part of your search engine optimization (SEO) campaign for organic search results.

My favorite part of the interview was when someone asked him what he thought a credit union is – what makes them different than a bank per se. He replied with an “of course, they are a cooperative and all members are owners…” as if it’s common knowledge. Jaws dropped, and a few attendees noted that he’s more knowledgeable about credit unions than some employees.

Yikes. Maybe the perception of young adults not knowing what credit unions are really about is skewed – It seems obvious, but can everyone in your credit union recite the “elevator pitch” citing the differences between CUs and banks? If not, it’s time to recharge.

YES After Hours: Attendees + Enthusiasm = Awesome

I can't begin to describe how awesome it is to see such an enthusiastic and engaged group of attendees here at the Summit.

After all of the planning, collaboration, and effort that went into putting this event together, it does my heart good to see folks sharing ideas, asking great questions of presenters, and making progress toward developing strategies for their credit unions. It shows that folks really do care, not only about the future of credit unions, but also about my generation.

You see, my role with CUNA goes beyond that of simply being the "Manager of Young Adult Programs"... it goes beyond sitting in a cubicle and rattling off e-mails. To me it's about making progress on two issues that I am very passionate about... the sustainability/growth of the Credit Union Movement and improving the way of life for folks my age.

And as I see it, these two issues are linked. Credit unions are uniquely positioned to help my generation with personal finance and young adults are crucial to the future of credit unions.

We are doing some excellent work here at the YES Summit and have two more days left. But the real work will begin when our attendees return to their credit unions. I feel confident we've been able to structure the Summit so that the "Your Essential Strategies" moniker is more than just a clever name.

I'd love to hear if you feel the same...

YES LIVE: Pump You Up

Alison Wolf (left) and table mates Dante Benedetti, Mark Eissens, Carin Miller, and Kerrie Davis demonstrated how they’d use aerobics to teach APR to young adults in a series of financial fitness podcasts.

YES LIVE: Angel vs. Devil

A struggle for the soul of a credit union member, Gabe Martin (center) featured a credit union angel, Tracey Sykes, against a predatory Beelzebub, Glenn Coble.

The morality play was an enactment of a comic strip idea that Martin, Sykes, and Coble created with table mates Ben Rogers, Kamilah Sanders, Yuliya Franklin, and Debs McCrary, as a lesson plan to teach creditworthiness.

Guess who won?

YES LIVE: Credit Unions and Credit Worthiness for Young Adults

As part of the afternoon focus on credit worthiness, Ben Rogers, Driver of the CU Tomorrow Initiative at Filene Research Institute, presented on building credit with young adults.

First, he laid out the environment for attendees:

• Younger people have lower scores

• It takes five to six years of debt repayment history to build an ‘A Paper’ resume

• Young people are more likely to earn low and sporadic wages, making them more likely to miss payments

• Credit report market could be worth $860 million by 2010 (USA Today)

Ben then detailed the credit union response – “There are three pieces to effective credit score programs for youth: education, marketing and financial products. Education is a good start, and it's where most CUs do start, but it needs to be coupled with marketing and tangible products to be most effective.”

One of the most intriguing examples that Ben discussed was one from Beehive CU (Salt Lake City, UT) that used Facebook to advertise a credit score improvement seminar. They were able to attract twenty people through Facebook, but overall thought the turnout was disappointing. They haven’t done it again (commentary – I think they should. Twenty on the first try on a completely new medium is actually pretty good! You have to start somewhere….first twenty, then forty, then…).

Another interesting example out of Filene’s I3 project is SmartScore. The project is pure marketing:

• Target a group of members, easier if you have recently pulled scores

• Mail them their score with information about how to improve it

• Follow up quarterly with updated score, further information

• Offset costs by cross-selling

Click the link above for a detailed business plan and summary.

Before he spoke, I asked Ben why serving 18-to-30s is so important for credit unions. He responded:

There are two ways to look at the youth issue among credit unions: 1) We need to move the average age of members down, 'nuff said; and 2) We have a chance to reinvigorate credit unions as the first choice for their financial institution, not just another among equals for young people.

YES LIVE: Small loans from person to person

Session title: Lending Club, Social Networks, and Credit Unions

Social networks provide a tremendous opportunity to meet small loan demand through person-to-person direct lending, according to John Donovan, COO of Lending Club. That’s because networks like MySpace and Facebook build connections between people, links that can be used to motivate people to invest in each other.

Lending Club is a peer-to-peer lending application available through Facebook, which has more than 50 million current users, with 250,000 new users joining every day. Each user can establish a “friend” relationship with anyone else on the network, and most do based on common interests.

Lending Club uses these links to bring people in need of money together with those who have it and are looking for better-than-market return. Potential lenders choose a risk level, which determines their “loan asking price.” Currently “low risk” translates to an interest rate of about 8%, while “high risk” sets a rate of about 14% (17.5% is Lending Club’s maximum).

Lending Club vets loan applicants, using conventional credit reports. It requires a minimum FICO score of 640. It is licensed in individual states to lend and resell loans.

Lending Club matches borrowers with lenders that fit the criteria. For example, Donovan displayed a borrower’s record showing need for $10,000 and a two-week deadline. To date, 15 people had offered 90% of the requested funds. Each lender was able to view the borrower’s qualifications, including credit rating, employment history, and intended use of the money. In the future, lenders will also be able to ask questions of prospective borrowers.

Prosper, the largest peer-to-peer lending service, has funded abuot $100 million in loans.

Zopa, the peer-to-peer lender based in the U.K., recently announced partnerships with several U.S. credit unions. The potential benefits to these credit unions include new loans and experience with new markets.

YES LIVE: Social Network for Better Serving Young Adults Unveiled

So I literally just finished my presentation where I "officially" launched the YES CU Community - the first social network created for a credit union conference. I've been working on it for months and it was great to share it with everyone.

This new community—called the YES CU Community— serves two purposes:

1. To encourage a lively discussion on the challenges of better serving young adults during and after the Summit.
2. Hands-on experience for credit union people to learn how social networking works, what these sites offer, and how their credit unions can create their own networks.

Josh Jones and I really wanted to bring another practical tool for attendees to the conference. The summit already has a blog year-round—the YES CU Blog: Serving 18-to-30s (which you are reading...). Social networking sites, such as MySpace and Facebook, are growing immensely and are a huge untapped market for credit unions reaching out to young adults.

The YES CU Community has all the basic social networking tools:

• Profiles
• “Friending” – ability to add friends
• “Chatter-wall” – Ability to write messages on other’s profiles
• Forums
• Blogs
• Groups (Marketing staff, CEOs, etc)
• Video & Photo Sharing

70% of young adults are on these sites – but many credit unions are not because they don’t know where to start and can’t get over the mystique. This ‘social networking sandbox’ will allow attendees to play around and get comfortable with the technology - all with the support of each other. I was actually impressed by how many attendees said that they have a personal MySpace or Facebook account. Only 2 or 3 said that their credit union has a presence. Many attendees said they don't blog regularly, so I hope they leverage the blogging functionality in the new site for practice.

At the end of the session, I gave out my “homework” to do different activities in the network, such as setting up their profile, joining a group, adding a friend, and so on. I also pointed out that everyone who registers by 8 AM Wednesday morning is entered to win a brand-new 8GB Ipod Touch. That got everyone very excited.

The Yes CU Community is open to anyone associated with the credit union movement that is looking to network with others on better serving young adults. Simply request access by visiting the site and follow the prompts to sign up. You can click one of the badges on the right of the blog or visit:

http://www.yescucommunity.com/

For those of you who missed my presentation, here it is in all its ten-slide glory:

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YES LIVE: Yes, You Can

Debt Management was the first scheduled YES Summit exploration. That’s where the 18-to-30s are, and where credit unions need to start with most of them.

Paul Synder

The assignment for attendees at each table—design a debt management program for Gen Y. One table created the “Yes, You Can Debt Reduction Program.”

Table mates Paul Snyder, David Kexel, Noel Hilden, Paul Gaumier, Danielle Thron, and Kenja Purkey hammered out the following basics for an educational program that helps overendebted members get back on the road to creditworthiness:

• Eligible members will have the opportunity to “earn down” the interest rate on a credit card from 16% to 10% by completing a course of instruction.

• Six courses will be available online, via podcast, or during face-to-face seminars offered monthly. Completing one course each quarter will qualify the member for a one-percentage point reduction in the credit card’s interest rate.

• Savings as a result of the lowered interest rate will be held in a CD and presented to members who complete the 18-month program.

• Further incentives will be available from a menu designed to appeal to 18-to-30s at different live stages. Examples, include a match of some portion of the savings the member has earned through the program or a waiver of some portion of closing costs on a future mortgage.

The debt reduction program offers members a chance and a reward for learning to take responsibility for debt and turn its burden into a better life. As Snyder, VP of marketing for Canton Schools ECU, explained the program title, `“You can get a handle on your debt. Yes, you can save money.” And, yes, you can become creditworthy again.

YES LIVE: Blogging is not for the faint-hearted or the half-hearted

Brent Dixon, creative director for Trabian, an Indianapolis-based Web development company. Session title: Do Credit Union Blogs Make Sense?

Blogging is Web 2.0.

Web 1.0 was characterized by the attitude: “Let’s put our brochures online.” But viewers could do nothing but look at copy. Many credit union web sites are still at this level, still static.

Web 1.0 links documents. Web 2.0 links people. The benefits:

• It’s great for putting a human face on your credit union. For example, Verity CU (Seattle, see link to the right), for example, allows any employee to post to its blog. (16 now do; some require editing.) Makes the credit union feel more like a group of people.

• A blog can help you positioning your brand with idealistic values. For example, Commonwealth CU (Alberta, Canada, see link) looking for an under-25 employee to serve as spokesperson and help design products. Video and blog application.

• Blogging can help with product development. “A blog is a ramped up suggestion box.” Bank of America invites online reviews of all products. This can be scary. You won’t get that kind of feedback from calling people or putting them in a focus group.

• Your blog can be a vital channel for crisis management by reassuring members. Verity used its blog to keep members informed about a problem that forced it to take down its web site.

Dixon’s advice:

Be open, be real, be transparent. But also beware: Because a blog is an open community it can be “hijacked.” Be sure to moderate comments. Don’t allow a free-for-all. The dangers of not moderating are not only off-color but also identity theft.

By creating an interactive blog, you’re opening yourself up, and are vulnerable. Wal-Mart—travelers cross U.S. and stay in Wal-Mart parking lots. Turned out to be PR firm employees, and once exposed, they hurt the company’s image.

Concentrate of on a specific topic of interest to your target audience. Most successful blogs are niche-focused. For example, Fiskars’ (best known, perhaps for its scissors and scrapbooking lines) addresses it blog to crafts people. Wells Fargo has a student resource site, which covers topics of interest to college students, including “Ask the Expert” Q&A feature.

Is blogging a cultural fit for your credit union? You have to be OK with responding to negative feedback.

Will blogging add value to members? 1% of Verity’s new members cite the blog as a reason for joining—this group has an average of $11,500 in loans outstanding, excluding mortgages.

YES LIVE: First Miami Student & Alumni Credit Union

On the morning’s subject of Debt Management, staff of First Miami Student & Alumni Credit Union in Ohio talked about their student-run credit union (one of two entirely student-run in the country).

Speaking was:

• Gabe Martin, Co-President & CEO
• Katie Aiken, Co-President & CEO
• Joel Niekamp, Managing Director

The credit union was started in 1988 and consists of 50 volunteer interns. It is $1.1 million in assets with about1, 700 members (mostly students, but includes an increasing number of alumni).

Their challenges include:

• Providing a wide array of financial services as a small credit union
• Revolving membership
• Name/branding
• Parent/student support is key

One of their most popular activities including presenting on financial education to students - focusing mostly on credit and money management. They tailor their examples from student suggestions and by group using real-world examples.

They are launching a new website (their current one is here), which will include financial education information and is designed to be the standard for credit unions expanding financial education sections.

They recently received a grant from the Ohio Credit Union Foundation to fund their efforts in expansion.

The staff of the credit union recommended to attendees:

• Establish relationships with a middle school, high school or university nearby
• Start with basic informational sessions (have free stuff available…food is popular).
• Create relevancy for audience
• Have educational materials on hand for presentations
• Financial links on website
• Analyze Gen-Y member base
• Provide incentives to those that attend sessions (ie: discount on loans, waive account service fees, etc)
• Consider parents when developing programs.

Continuing financial education is a key priority.

Before the Summit, I asked Joel Niekamp why serving young adults is so important for credit unions:

Gen Y is the most influential spending generation yet to hit the world. We have grown up with access to relatively large amounts of money from both our parents and jobs we have held. Because of this access to capital we rarely consider the long term affects of our purchases thus escalating the problem with outstanding debt. Not only that, but according to CUNA President / CEO Dan Mica "Most people choose their primary financial institution by age 25 and stay with it, on average, 15 years."

According to the YES Summit site, the average age of credit union members is 47. That is a rather disturbing statistic if credit unions are looking to survive well into the future and compete with the larger banks. The earlier credit unions can gain exposure to students, the better the chance of providing these people with their financial needs, and one of the easiest ways to gain exposure is through financial educations programs and materials. Education sessions or materials gain credit unions access to young people while also educating them on the importance of financial literacy, thus creating more profitable measures.

YES LIVE: Post-panel interview--Aaron, age 24

Consulting engineer--$50,000 in car loan, college loan, credit card debt

“I want to know how a credit union can save me the most money in the long run and make my monthly payments affordable. The number one problem I have is ATM accessibility, when I find an ATM to get cash, I get charged. If credit unions had more ATMs, I’d probably switch to one of them completely.”

YES LIVE: Post-panel interview--Stephanie, age 28

Mother and student--$15,000 in credit card debt

“I need information about how to get out of credit card debt. I have about $10,000 on a credit union credit card at 9.5% and the rest on a bank card at 12.9%. I’m looking into a signature or other fixed-payment loan to pay it all off. I’d come to a group educational session, a lunch seminar during the workday when I’m already away from my child.”

YES LIVE: Post-panel interview--Daniel, age 27

Database manager--$160,000 mortgage

“I own one single-family rental, and am closing on another $100,000 property. I would’ve considered getting credit union mortgages if I’d been able to find out about them. Credit unions don’t advertise this. You have to phone and go through the call center. They tell you to come into the lobby to find out. That’s the killer—I work longer than banker hours. I also had a hard time finding information about credit scoring. I was shocked to find out how your score can be affected month to month, just by having someone look at your credit report.”

YES LIVE: Post-panel interview—Jamie, age 28

Recruiter--$50,000 in student loan debt

“I need more conveniently access to my money. Young people are very mobile. I travel a lot and need access to fund nationally and internationally. I have two more years of grad school, and expect my student loans to reach $100,000 in the end. Half of my current debt is unsubsidized. I always take the maximum student loan amount offered, even if I don’t need it for school expenses. A lot of students do that. I also know students who take on subsidized student loans to borrow money for their parents.”

YES LIVE: Actual Young Adults Answer Attendee Questions

The morning’s first activity was dividing up the room into three main sections for attendees to brainstorm questions to ask real live young adults. Four young adults then took the stage to answer the questions (2 male, 2 female).

Overall, they seemed more financially literate than most (or is that just my assumption that young adults are not?). They shared personal experiences regarding their financial experiences - several themes emerged from the conversation:

• I heard three of the four young adults mention that their parents influence and upbringing in regards to their finances was key.
  

• They seemed aware of what credit unions were and that they are different from banks. Two mentioned that they thought more young adults would be credit union members if they (CUs) - had the amount of ATMs that banks had.

• Credit unions have better rates for loans.

• Bankruptcy is bad and should be avoided at all costs because of it’s long-term effects. They would work multiple jobs if need be.

• Conflicting thoughts on payday loans. One knew they were bad, another didn’t know anything about what they were.

Some ideas to reach young adults that were voiced:

• Partner with local organizations that are relevant to get 20-30 minutes of their time. One example is reaching out to college professors especially.
• Advertising on the internet are mostly ignored because they focus more on their activities. Television and radio are more visible….but one has Tivo and skips commercials. They use online banking and check their financial institution’s website daily for news and information -the events page of the site is especially relevant.

YES LIVE:Ready, set, go..

Christopher and I introduced ourselves—I’m the guy with the beard freshly shampooed and conditioned with the essential oils of angelica, lavender, and geranium.

Turns out the vast majority of attendees are active in MySpace and/or Facebook. It’s a “leading edge” crowd, so the idea of blogging from the conference isn’t much of a stretch for this audience.

The whole point of the live YES Summit blog is to get a conversation going on the fly. We’ll highlight speakers’ points, alternating speakers and sessions for maximum coverage. What we post will be fair game for attendees and the credit union world at large to criticize, question, challenge, answer, or steer in a new direction. How successful we are will depend partly on how well we frame the topics and how willing attendees are to speak up in public. Good thing this group here in Austin is already active online.

We have two laptops set up in the Four Seasons ballroom to allow anyone on site to comment on our posts at any time. In addition, attendees who brought their own computers are able to respond directly from their seats.

Readers out there in credit union land will have to speak for themselves.

Live from Austin! It’s YES!

The time is here.

We are furiously making last minute preparations. Registration opens in ten minutes. Stay tuned to this spot for session-by-session coverage of the The 2007 Your Essential Strategies (YES) Summit. The summit focuses on serving members of the diverse 18-to-30 year-old demographic. By transmitting the proceedings real-time, CUNA staff is using one of the target market’s preferred techniques to explore its financial needs.

“You should be here,” said Josh Jones, YES organizer and CUNA’s manager of young adult programs, “but if you can’t be with us, this is the next best thing. The 2007 YES Summit is the first credit union conference with full-blown, live blog commentary. We have two reporters working the agenda, so that if you’re following along at home, you’ll be able to read what people are saying within minutes.”

Christopher Morris (me), web manager for CUNA Councils, and Philip Heckman, CUNA’s director of youth and young adult programs, are responsible for the almost instantaneous YES coverage.

Heckman explained, “Christopher and I are approaching all the sessions as a tag team. Besides posting the main points that speakers make, we’re recording attendees’ insights and reactions. Our goal is to bring this gathering to the credit union world as it happens.”

Look for the typos that indicate freshness.

In preparation for this week’s event, summit organizers and speakers have posted to the blog earlier. Among the subjects they previewed for attendees:

• Board members under 30, Justin Ho, board member (age 20), USC Credit Union
• Peer-to-peer direct lending using Facebook, John Donovan, COO, Lending Club
• Gen Y staff recruiting, Bill Humbert, CEO, The Humbert Group

CUNA staff emphasized that the live conference blog is not merely online note-taking. Throughout the day, we’re constantly encouraging attendees to join in the discussion, adding their immediate impressions, questions, and disagreements. Their live comments to our posts reflect the essence of serving 18-to-30s—creating a fully engaged and immediate dialogue.