YES LIVE: Rodney Hood--“Now is the time to differentiate yourselves from other financial institutions”

Nothing could be more important at this time than to get out the message that credit unions are not part of the current economic problem, that credit unions are safe and sound, and credit unions are open for business, according to Rodney Hood, vice chairman of the National Credit Union Administration.

Hood spoke at CUNA’s YES Summit on Friday. He pointed out that with a national average net worth 11.16%, representing $89.6 billion in capital, “credit unions have the wherewithal to weather the storm and extend credit. I encourage credit unions with adequate capital to use it.”

Joking that it’s “never been a more exciting time to be a regulator,” Hood cited the newly chartered Realtors Federal Credit Union for members of the national realtors association as an example of the continuing strength of the credit union model. “They could have become a bank, but they chose to have a credit union for their 1.5 million realtor members,” he said.

Hood urged summit attendees to increase their marketing efforts to restore and maintain confidence in credit unions. The message should focus on educating members and the public about:

· The expansion of insurance coverage of their credit union savings,
· The overall strength of the movement, and
· The continued availability of credit.

Hood also spoke to the summit audience about Blueprint 2020, NCUA’s initiative, announced in June 2007, to encourage strategic partnerships between credit unions and universities and trade schools to provide internship opportunities for young adults. Students would receive income, academic credit, and the opportunity for permanent employment. In the process, the interns will help sponsoring credit unions attract not only the next generation of members but also the next generation of leaders.

“We have strong credit union leaders and wonderful boards,” said Hood. But he recently met a man who has served on his board for 65 years. Hood said he was grateful for his service, but believed that unless credit union recruit young leaders, they will become stagnant, and miss essential new ideas.

Hood expects the Blueprint 2020 task force, listed in the Blueprint, to set benchmarks for the initiative in the future. To make it possible for low-income credit unions to participate in the enterprise, NCUA provides grants of up to $3,000 for paid internships.

IMHO: What we call the “next generation” cannot be limited to 18-to-30s. In reality, credit unions would not be struggling as hard to pursue young adults’ business today, if they’d captured that business 17 to 29 years earlier, when there was no competition for the target group’s hearts and minds. To be successful in the long-term, credit unions must augment their young adult strategies with aggressive youth programs. Otherwise, they will be doomed to a perpetual and increasingly more expensive campaign in pursuit of the elusive 18-to-30 market, locked in battle with big-bank competitors with a lot more marketing dollars to spend.