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CU System
ALM forum notes shifts in market member dynamics
DALLAS (9/10/08)--Credit unions need to be unique and bring value to their members, according to one of several speakers at the ALM First Financial Advisors Financial Forum Aug. 11-13. The forum presented speakers who discussed the current economic state and the dynamics of credit union members. Diana Dykstra, president/CEO, San Francisco Firefighters CU, said banks have “wised up” and taken a cue from credit unions that they need to focus on their customers. “Customer intimacy doesn’t just belong to credit unions anymore,” she told the group. “We can’t just be marginally better. The world has changed on us--and we must pay attention and be willing to shift with it.” On average, 20% of a credit union’s members will generate 150% of its earnings, said Joseph Prunty, founder/president of CorePROFIT Solutions Inc. “These members are your franchise--they add value every day. No credit union today should not know who its members are. If members leave, it is very hard and expensive to replace them,” he said. Other highlights addressed included:
* Credit unions’ survival in the current market woes. ALM First partner Tom Manley said the Bear Stearns failure has set in place “different mechanisms and oversight” by the Federal Reserve. “How this will impact credit unions, I don’t know. But credit unions have managed very well, with very few realized losses. We’re an industry that doesn’t have nearly as many problems as the rest of the financial community,” he said. * Consumer confidence, which has plunged to a 40-year low. People fear that their income is declining, said Chris Low, chief economist, FTN Financial. “Not just unemployment, but underemployment, where they work below their skill and income levels. People aren’t finding jobs with income growth,” he added. * Shifts in consumer wealth. Wealth isn’t linked to consumer saving, said Torsten Slok, director, US economics for Deutsche Bank Securities. “U.S. households have just started to save again--a little bit, at 2%--but we have to save more,” headded.
The forum also featured a panel of credit union leaders addressing the challenges, opportunities and risks that credit unions face. New Jersey Credit Union League President/CEO Paul Gentile moderated the discussion. The panel presentation is free to credit union professionals through ALM First’s website (use the resource link). Panelists included:
* Jim Blaine, president/CEO, State Employees’ CU, Raleigh, N.C.; * Dykstra; and * John Tippets, retired Dallas-based American Airlines FCU president/CEO.
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