Stairway Heaven - NACUSO · stairway to heaven? Let’s take a closer look at a new credit union...

Stairwayto Heaven

»A New Business Model Emerges

»The Future of Credit Unions

The 2004 Fall Conferences Are Heating Up!

NEW IDEAS TRANSITION OPPORTUNITIES EDUCATION EXPANSION PERSPECTIVE CHANGE

PRESIDENT’SDESK

THE

Board of DirectorsJohn D. Unangst (Chairman)Franklin Mint FCU1974 Sproul Road, #300Broomall, PA 19008610/325-5010

Robert Dorsa (President/NACUSO)PMB 3419 Via Lido #135Newport Beach, CA 92663949/645-5296

Ava Milosevich (Vice Chairman)The SELCO GroupP.O. Box 7487 Eugene, OR 97401541/686-5339

Peter W. Snyder (Treasurer)Addison Avenue Financial PartnersP.O. Box 3010 Rocklin, CA 95677916/435-5425

Dennis Pierce (Secretary)CommunityAmerica CU9777 Ridge Drive Lenexa, KS 66219913/905-8100

Thomas C. Davis (Director)Davis & Company8616 S. Meadow Creek DriveHighlands Ranch, CO 80126303/791-5141

Victor Pantea (Director)Member Gateways, LLCP.O. Box 2617 South Bend, IN 46680574/291-9484

Dave Serlo (Director)PSCU Financial Services560 Carillon ParkwaySt. Petersburg, FL 33716800/443-7728

Guy Messick (General Counsel)Lastowka & Messick P.C.108 Chesley Drive Media, PA 19063610/565-0330

Navigating Your Ship to Calmer Waters.On the heels of our most successful Annual Conference ever, I am filled with optimism

for the credit union world. Although regulatory changes are creating a new paradigm

for the industry, I see fresh new opportunities. Some

of these are created in part because things are being

shaken up for the first time in years. The way things

have always been done…well, they won’t be done

that way any more. I am also convinced more than

ever of the significant value of our organization to

credit unions like yours. With decades of experience,

we can help you navigate uncharted waters that

stretch from credit unions to CUSOs and to all

ports in between. As I said, these are exciting

times—but only if you have clear direction.

In this issue of Share we focus on some key issues in this time of transition: 10 steps to

move from a CUSO, opportunities for business lending, and strategies for growing your

business. These articles are packed with content and I recommend you treat them—and

upcoming issues of Share—as a resource library. You can also access these articles and

additional information at our all new high-energy web site: www.nacuso.org make this

your “turn to” first response resource.

Finally, let me personally invite you to attend one or both of our fall conferences

in Phoenix and Kauai. The Phoenix Conference is for credit union leaders and will

be packed with meaty topics such as compensation packages, profitability models,

advertising alternatives, and integration of investments. Our Kauai conference is at the

spectacular JW Marriott Resort and Spa and is designed for board members. It will be a

powerful event!

I hope you enjoy this issue as much as we have putting it together. Thank you for the

many, many wonderful comments you have sent our way. We love getting them!

—Bob Dorsa

NACUSO President

By Bob Dorsa

»The Future for Credit Unions is Now.A New Business Model Emerges.

SHARE • SUMMER 2004 • 5

The recent passage of the Incidental Powers act

has launched a barrage of questions, concern

and confusion for many credit unions that

have grown comfortable with their CUSOs and

the critical services they provide for members.

As a result, some credit unions are rushing to

transfer this division into the core business of the

CU while others are standing firm behind the

value of their CUSO. Is this new regulatory

environment the beginning steps of a descent

into a financial services netherworld…or is it a

stairway to heaven? Let’s take a closer look

at a new credit union model that may offer the

promise of brighter days ahead.

STAIRWAY HEAVENto

CREDIT UNION Networked Model

CARD PROCESSING

BROKER/DEALER

DATA PROCESSING

MORTGAGE SERVICES

SHARED BRANCHING/

ATM NETWORK

CREDIT UNIONMANAGEMENT SERVICES

TRUSTSERVICES

INSURANCEAGENCY

The future of credit unions may be tied more to the creation

of a new business model than a step-by-step alteration of the

old one. Certainly both the traditional credit union and the

CUSO bring specific strengths to the table (see chart). The credit

union provides consumer loan programs, deposit accounts and

electronic banking services. The CUSO complements these with

commercial loans, investments and financial planning, shared

branch systems, ATM networks and insurance services. Once

these are combined, a more powerful entity is created (see below).

This wide array of services removes confusion for the member

and allows staff to present and sell more products. Marketing

dollars are also leveraged through this model and the potential to

expand services is even greater.

NACUSO is ideally situated to meet the needs of this new

model by providing input, experience, case studies, research, and

consultation for virtually every product or service shown here. It’s

to your advantage to access the many benefits of your NACUSO

membership as well as bring your knowledge and insights into

the organization. Founded in 1985, NACUSO is the leading

professional trade association for credit unions and CUSOs

seeking to provide a full array of services, such as mortgages,

business lending and business lending depository services, trust

services, investments and insurance to their members and non

members alike. NACUSO’s mission is to enhance the ability

of credit unions to serve their members through CUSOs and

the implementation of Incidental Powers authority and other

associated capacities.

Because today’s highly competitive marketplace and the changing

credit union and CUSO regulatory terrain require businesses to

work faster and smarter, the synergy between CUs and CUSOs

has never been more important, and the treasury of knowledge

offered by NACUSO more relevant. Additional significant

benefits available to members are shown on the next page.

6 • SHARE • SUMMER 2004

EDUCATIONAL CONFERENCES NACUSO holds several first class educational conferences

each year (see pages 17-20) and conducts regional workshops on emerging issues as

required. We also provide comprehensive coverage of events online and maintain a

complete text and graphic (html) archive of past conference coverage.

INSURANCE SERVICES RESEARCH NACUSO has joined forces with LIMRA to provide our

members with more research and information about insurance products and the industry.

Plus, for a limited time, all NACUSO members are entitled to receive a complimentary

copy of the LIMRA Bank-Credit Union Life Insurance Study (see sidebar).

NACUSO CONSULTING With the passage of Incidental Powers, some organizations are

unsure of where they stand or exactly how to deal with the integration of CUSO products

and services. NACUSO can provide valuable answers and insight through an on-site

discussion and evaluation (see page 29). Bob Dorsa is also available to address director

education or orientation for the past, present and future of CUSO products and services.

REFERENCE RESOURCES NACUSO can refer you to a qualified source for information,

saving you many hours of research when looking for information on Best Practices,

Benchmarking, Industry Standards and other tools. Speaker reference materials and

PowerPoint Presentation copies are always available to members. That way, ideas, concepts,

strategies and innovative products offered by industry leaders, experts and guests at

NACUSO conferences are always at hand.

NCUA EXAMINATION GUIDELINES NACUSO members receive a NCUA Examiner’s

Checklist to assist in self-examination of their CUSO. NACUSO also maintains a library

of legal opinions and comments issued by the NCUA and other regulatory agencies.

LIMITED LEGAL COUNSEL NACUSO provides valuable assistance by answering commonly

asked legal questions. This limited counsel on CUSO issues may save your organization

time and money.

Annual membership is only $375 for credit unions and CUSOs.

For more information, please call (888) 462-2870 or email Bob Dorsa

at [email protected] or Shawna Luna at [email protected]

Free LIMRA Research Study As you can see, NACUSO’s

not just about investments—

we’re about building,

strengthening and growing

credit unions like yours!

If you’re not already a

member…you need to

be. Have complete access

to extensive research and

decades of experience during

a time when direction is an

invaluable resource. When

you join, you will receive

a COMPLIMENTARY

COPY of this extensive study

issued by the Life Insurance

Marketing and Research

Association. It includes

eye-opening information

that can help you build a

more profitable bottom line.

Call 888.462.2870 Fax 949.645.5297 www.nacuso.org


PowerAccess the Power of NACUSO


The Securities and Exchange

Commission (“SEC”) does not permit

commissions from securities sales to

be shared with non-registered persons.

This is so the SEC and the National

Association of Securities Dealers

(“NASD”) can oversee and discipline

persons who violate the securities laws

and cause harm to investors.

When CUSOs were born

In 1993, the SEC issued a no-action letter to

Chubb Securities setting forth an exception to

the commission sharing rule. The SEC permitted

broker/dealers to share commission income with

financial institutions or their “required service

corporations” if the financial institutions could

not receive the income due to regulations affecting

that type of financial institution, i.e., credit unions.

Credit unions were permitted to only receive their

actual expenses in supporting the programs (e.g.,

the fair market rental value of the space used by the

broker/dealer). In response to this limitation, credit

unions formed credit union service organizations

(“CUSOs”) to contract with the broker/dealers.

CUSOs were not limited by regulation and could

receive a share of the commission income for the

support provided to the broker/dealer.

TEN

KEYS

8 • SHARE • SUMMER 2004 SHARE • SUMMER 2004 • 9

Enter Incidental Powers In 2001, the ability of credit unions to receive income

from third party vendors changed with the passage of

the Incidental Powers Regulation by the NCUA. This

Regulation permits federally chartered credit unions to

receive income over its expenses as long as the arrangement

complies with other laws. State chartered credit unions

generally have the same powers. As a consequence, CUSOs

are no longer a “required service corporation” under the

Chubb Letter and the SEC has advised the industry that

CUSOs are no longer qualified to receive commission

income unless the CUSO becomes a registered broker/

dealer. The SEC has insisted that all new networking

agreements with broker/dealers must be with the credit

union and not the CUSO. The SEC intends to issue a no-

action letter in the first half of this year that may provide

some further clarification to the role of CUSOs.

I do not expect that the SEC will grandfather existing

CUSOs or change its mind on the requirement that credit

unions have to be the contracting party in networking

agreements. They have made that very clear. The SEC

feels comfortable with permitting a non-registered financial

institution to receive a share of commission income

because the credit union is directly regulated by NCUA

or state credit union regulators whom the SEC can call

upon to help it correct a problem. CUSOs are not directly

regulated by credit union regulators.

Services on the Move Many CUSO investment services programs have already

been moved from the CUSO to the credit union. Some

credit unions have seen that this is inevitable and were

proactive. Many credit unions view the move to the credit

union as a benefit. The association of the investment

program with the credit union helps the credit union more

fully integrate investments with other credit union services.

I expect that the SEC and NASD will actively enforce the

movement of existing programs into the credit union this

year, especially after the issuance of the no-action letter.

Some credit unions have already reported SEC examiners

who are pushing the affiliated broker/dealers to

make the move.

Having received many questions on the topic of moving

the investment services from a CUSO to the credit union,

I decided to write this article to set out the action items of

the move. Most of the items would also apply to brand

new programs being implemented in the credit union.

CUSOMoving your investment securities back into the Credit Union

TEN

KEYS to

from

Transitioning

By Guy Messick


KEYSTRANSITIONING

1. Revise the financial services agreement with the broker/dealer. This takes a little more thought than

just assigning the agreement from the CUSO to the credit

union. There are terms in these agreements that refer to the

relationship between the credit union and CUSO that have

to be modified. This is an excellent opportunity to review

the agreement to make sure that you have all the terms that

you might have overlooked the first time. These items could

include the control of business upon termination of the

agreement and privacy terms that were not fully set forth in the

original agreement.

2. Revise the Letter 150 policies. The Letter 150

Policies will have to be amended to remove the CUSO.

3. Appoint a Letter 150 compliance officer with a job description. Letter 150 requires the appointment of

a person not involved in the management of the investment

services program to oversee the credit union’s compliance with

Letter 150. Are the proper disclosures being given? Is there

adequate separation of the investment sales function from the

deposit taking function at the credit union? Some credit unions

are looking for heightened vigilance in this area now that

CUSOs are not involved to help shield the credit union from

liability. Letter 150 requires the appointment of a compliance

officer. Typically the Letter 150 compliance officer is an internal

auditing function. I recommend that you give your compliance

officer a job description so he or she does not do too little or

too much. Remember the compliance officer is only looking at

Letter 150 compliance not securities law compliance. Security

law compliance is the job of the registered principal assigned by

the broker/dealer to supervise the investment sales activities at

the credit union.

4. Revise the registered representative’s employment agreement. If your CUSO has employed the

registered representative in a dual employee type investment

program, you will have to shift the employment agreements

to the credit union. You will want to work with your

benefits providers to coordinate benefits and determine how

a commission based employee will be integrated in benefits

program. If you have platform representatives (part time

representatives that also perform credit union duties), you will

want to have an agreement with them as well. The agreements

can confirm that the relationship is an at-will relationship,

terminable at any time and protect against diversion of

business and solicitation of clients after termination of the

representative’s employment. I would also recommend that you

review the representative’s agreement with the broker/dealer to

insure that the agreement contains adequate non-solicitation

provisions to protect against the diversion of business away

from the credit union’s program. If the broker/dealer has

the responsibility to pay the registered representatives, this

is called a managed plan and the credit union does not have

employment agreements with the registered representatives.

5. Decide whether you intend to offer the insurance products through the CUSO or the credit union. The SEC ruling only applies to the sale of securities,

e.g. stocks, mutual funds and variable annuities. You can still

offer insurance products through a CUSO. A few states do not

permit a credit union to obtain an insurance license. Where

credit unions have a choice, most credit unions are electing to

sell the fixed annuities insurance products through the credit

union networking agreement which in most cases means that

the credit union will have to obtain an insurance license.

Credit unions are split on whether they will offer other types

of insurance products through the credit union or CUSO. It

depends on the model they have constructed. If the CUSO is

actually the selling agent (and not a referral agent), the CUSO

is required in order to sell the insurance products, as the credit

union does not have the power to actually sell insurance.

SHARE • SUMMER 2004 • 1110 • SHARE • SUMMER 2004

6. Obtain an insurance license for the credit union if necessary. It is a relatively easy process to obtain an

insurance license if the state permits a credit union to obtain an

insurance license. An NCUA General Counsel Opinion permits

a credit union to obtain an insurance license if state law requires

a license in order to share commissions under Incidental

Powers. NCUA does not permit a credit union to be the selling

agency, as credit unions do not have the power to actually

sell insurance. Note that all states issuing an insurance license

require that a licensed person associate with the credit union,

sometimes in an officer capacity. This means that a special

officer position at the credit union would have to be structured

for the licensed person. The associated licensed person could

be a credit union employee or an outside person that is also

licensed with the affiliated insurance broker. In some states, the

credit union does not have to obtain a license and can receive

commissions if it has a licensed employee. All these licensing

issues have to be explored and may determine whether you

continue to use your CUSO to sell insurance products.

7. Verify if the credit union can receive securities commissions under state laws. I know of at least one

state that will not permit a credit union to receive securities

commissions without being licensed as a broker/dealer. Credit

unions do not have the power to be broker/dealers. Unlike

obtaining and maintaining an insurance license, obtaining and

maintaining a securities license is cost prohibitive. You could

use an expense reimbursement agreement for the fair market

value of the rent, clerical support and marketing support

provided to the broker/dealer. I expect that this anomaly will

be temporary and that all states will enable credit unions to

receive commissions under the Chubb Letter.

8. Review the credit union’s bond and insurance coverage for the investment activities. You should

review whether you want to supplement your bond or

insurance coverage to cover the investment services. Typically,

your affiliated broker/dealer has professional liability

insurance to cover the negligence of the representatives and

its own negligence. The broker/dealer typically indemnifies

the credit union for the broker/dealer’s errors (make sure

the indemnification covers the errors of the registered

representatives whom the broker/dealer exclusively supervises).

Some credit unions also are considering buying their own

professional liability insurance, especially in dual employee

programs. While the cost is reasonable, the high deductibles,

the insurance and indemnification from the broker/dealer

and low history of risk to financial institutions in networking

agreements causes many credit unions to pass on this insurance.

9. Determine who will manage the investment program. A key success factor is the presence of a

knowledgeable and skilled manager at the credit union/CUSO

level. Most credit unions with effective CUSO managers are

moving the mangers into the credit union at a Vice-President

level. Do not make the mistake of trying to run this portion of

the credit union’s services with an unqualified person on a part-

time basis.

10. Will the investment program have profit accountability? When the investment programs were in the

CUSO, the profitability was always an item that was monitored.

If the credit union has a cost accounting or arranges itself in

profit centers, the investment services’ profitability will still be

monitored. If the credit union does not have cost accounting

by services provided, there is a larger question for the credit

union as to whether it should apply cost accounting across all

lines of service.

10 SHARE • SPRING 2004

PLUGGED INThe goal is for members to identify credit union Financial Advisors as preferred “Trusted Advisors”

By Thomas C. Davis and Valorie A. Seyfert

PLUGGED INThe networked economy has ushered in new challenges and opportunities for credit unions. Competition is fierce and the need to create differentiated, sustainable advantage is

more critical than ever. To surmount these challenges, some credit unions are trying

to link the credit union’s reputation of trust to initiatives that carryover from the

retail financial products and services side to the non-traditional side of the business.

The goal is for members to identify credit union financial advisors as preferred

“Trusted Advisors”—for all financial transactions, whether it be the sale of stocks,

bonds and insurance products or auto loans, credit cards, CDs and mortgages.


Financial services providers have generated most of the

information related to trust-based positioning and trusted

advisor strategies. However, the most accurate source of

data and information on the importance of trust and

the characteristics of a Trusted Advisor come from credit

union members themselves. In order to develop primary

qualitative market research information related to trust

and the Trusted Advisor, Davis & Company and CUSO

Financial Services L.P. (CFS) collaborated on a joint

project to conduct a series of focus group interviews with

credit union members. One objective of the research was

to capture data on the selection and use of investment

services and to identify characteristics desired of a Trusted

Advisor– from the member’s perspective.

Highlights of Research Members indicated

that trust was the number one reason for selecting

and using an investments provider. They felt that

trust was something that evolved and developed over

time, not something that “just happens.” Members

also indicated that they were able to assess a level of

trustworthiness with a financial institution or Financial

Advisor before they used them though such techniques

as referrals from trusted associates and interviewing

several Financial Advisors, asking relevant questions

of them.Members defined the elements of trust in a

combination of rational and emotional terms. Rational

definitions included “the stability of the financial

institution,” and “the honesty and integrity, knowledge

The goal is for members to identify credit union Financial Advisors as preferred “Trusted Advisors”

plugged in

Valorie A. Seyfert is President/CEO of CUSO Financial Services L.P., San Diego (Member NASD/SIPC). For more information on CFS please visit www.cusonet.com

Thomas C. Davis is President of Davis & Company. For more information on the Trusted Advisor and member focus group research, contact Tom at (303) 791-5141 or [email protected].

and expertise of the Advisor.” Emotional terms included

“the secure feeling I get,” “having a positive gut reaction,”

and “the warm feeling I get knowing they have my best

interests at heart.”

When asked about the level of trust of the Credit Union,

the near uniform response by CFS users was “10 out of 10”

when asked about the level of trust with the Investment

Reps, members responded “very high.” When users of

other broker/dealers were asked the same questions, they

responded similarly to the CFS users on trust with the

Credit Union; however, when asked about their level

of trust with the Credit Union Investment Representatives,

they were either unaware that the Credit Union offered

investment services or more frequently -- did not perceive

them as a credible resource or as having a good track record.

Members defined the greatest “trust busters” by such

behaviors as not finding out about their needs; not

listening; pre-judging and making recommendations

before asking questions and understanding their situation;

talking “down” to them and not explaining things at a

level they could understand; appearing to have their own

interests rather than the members’ interests at heart (e.g.,

using hard-sell techniques to sell a product just to get a

commission). Scripted or boilerplate information was not

well received and for women, the assumption that the

husband makes all investment decisions was a negative to

gaining trust.

On the Trusted Advisor One of the most important

findings of the research was that members disclosed

experiencing feelings of vulnerability in many investment

situations. Members explained feelings of vulnerability

as due to the uncertainty surrounding their retirement

situation, and the need to rely on someone else for

knowledge and information to make an important decision.

They said they had to believe that the advice and guidance

they were getting was unbiased, and they hoped the

advisor has their best interests at heart. These feelings were

especially critical when in a Bear stock market. Self directed

users were skeptical, did their own research and lacked this

required level of trust.

Given the feelings of vulnerability expressed by members

in investment situations, it is not surprising that they

defined the characteristics of a Trusted Advisor in both

rational and emotional terms. A cluster analysis was

performed on member responses on the characteristics of a

Trusted Advisor. The analysis yielded four distinct rational

dimensions of a Trusted Advisor: credibility, sincerity

and commitment, focus vs. self focus and track record.

Each rational dimension is defined by 8-10 behaviors,

which they deemed critical for a Trusted Advisor. Members

also defined the following four corresponding emotions

and feelings related to each of the rational dimensions:

confidence, being cared for, comfort and security.



These emotions were described as relieving the feelings

of vulnerability and contributing to feelings of trust.

Being informed of changes that may impact (favorably

or unfavorably) the member’s investment situation was

important to gaining that trust. Member education was

also highly valued, as was coming prepared for meetings,

and working with the same Investment Rep. Disclosure

of how Financial Advisors are paid was also a key factor in

developing trust. The Trusted Advisor Model shown below.

describes the four rational and emotional dimensions

of a Trusted Advisor along with examples of the

corresponding behaviors.

Strategy and Positioning Being a trusted financial

institution and being perceived as a Trusted Advisor

was important to members in selecting and using an

investments services provider. By manifesting the specific

behaviors and Trusted Advisor characteristics identified

by members in this qualitative research study, Investment

Reps can better satisfy both the rational and emotional

needs of the members. Strengthening the credit union’s

image of its investment program would go a long way

towards its identity as a Trusted Advisor. Increasing the

awareness of the Investment Program is only the first step

in that process.

Once established, continuing communication and contact

is necessary, especially as Investment Representatives

leave and replacements are hired. Continuing education

must also be available for the Investment Representatives

themselves, as the marketplace is seen as complex, with

new products made available frequently. This strategy will

translate into a greater percentage of members using the

Investment Program and higher levels of Gross Dealer

Concessions generated.

TRUSTED ADVISOR

Sincerity & Commitment • Accessible & Responsive

• Listens without pre-judging

• Relaxed, unhurried demeanor

• Delivers on promises

• Follows through

Member feels cared for

Credibility • Knowledge, expertise, experience

• Has a fresh perspecitve

• Brings in outside experts

Member feels confident

Member Focus • Has my best interests at heart

• Asks questions, assesses my situation, gives advice

• Understands my needs

• Is impartial and honest

Member feels comfortable

Track Record • Many referrals

• Client portfolio performance

• Length of time with investment firm

• Keeps clients

Member feels secure


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2004 NACUSO FALL CONFERENCES

PHOENIX, ARIZONA

KAUAI, HAWAII��

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SAVE $100

EARLYBIRD PRICING

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LEADERSHIP CONFERENCE PHOENIX, ARIZONAWednesday/September 157:00am Golf at the Wildfire Golf Club (Faldo Course)

12:30-5:00pm Pre-Registration/ Internet Café

1:30pm Using Life & Health Insurance Products to Energize Your Bottom Line Insurance products create opportunities for additional product penetration and revenues. Products such as key man life, buy-sell arrangements as well as health products like major medical and supplemental insurance may be required to give your organization a competitive advantage. Listen to an experienced panel present some of their practical experiences as well as their revised plans for their insurance marketing in the future.

3:00pm CU Investment Program Integration Incidental powers authority has been in place nearly two years. What lessons have we learned and where are the new opportunities for success? Discover the results from credit unions who have acted and embraced incidental powers. Facilitator Guy Messick has been an influential force from the onset of these sweeping changes. His latest report will certainly impact your credit union’s future.

7:00-9:00pm “Welcome to Phoenix” BBQ Reception Join conference participants for a special Sunset Reception under the beautiful desert stars at the magnificent JW Marriott Desert Ridge property. Spouses welcome!

Thursday/September 167:30am Networking Buffet Breakfast Enjoy your breakfast and our “NEW” networking format. Select table seating based on pre-determined subjects such as financial services, mortgage lending, business services, operational, director and governance issues, training and recruiting, and technology.

8:30am Keynote Presentation: Cracking the Comfort Zone What are the attitudes, skills and strategies necessary to seize emerging opportunities and turn them into success? It is safe to say much of what credit unions and CUSOs have been doing and the “comfort zone” we have created must be challenged if credit unions are to grow and prosper. Neville Billimoria, is SVP of Membership, Marketing, Quality Sales and Service, and eBusiness for Mission FCU headquartered in San Diego, California. Neville’s focus is externally on sales, marketing and communications effectiveness, and internally with leadership development and organizational alignment issues. For the past 17 years he has worked with a diverse client base serving both public and private companies in hi-tech, biotech, software, the Internet, personal development and other industries.

10:15am Benchmarks and Profitability Models Tom Glatt, Sr., Counter Intelligence Associates The changing environment in both the economy and the financial services industry will inevitability require credit unions and CUSOs to restructure their perspectives and expectations on future profitability including the potential for a very different revenue stream.

12:15pm Awards Luncheon NACUSO will formally announce the 2004 Best Practices Recognition Award and Executive of the Year Awards. Who will be this year’s prestigious recipients? Join us to find out first hand!

1:30pm Media and Advertising Alternatives Look beyond the traditional forms of print advertising. Some people believe in addition to focusing on new electronic media opportunities, including the internet, television advertising is essential if credit unions are serious about reaching more consumers. What has your organization done to thoroughly research and understand the benefits and costs associated with this dynamic media opportunity?

3:00pm Open Networking Discussion

Friday/September 178:00am Networking Buffet Breakfast

9:00am Executive Compensation Issues with Paul Dorf, PhD, APD, Compensation Resources How does your organization deal with components of executive compensation issues such as competitive base compensation, merit or performance measurement and rewards, employment agreements including performance incentives, fringe benefits and employment relationships? As credit union titles, positions and skill requirements change, attracting and retaining qualified and skilled employees becomes a greater challenge.

10:15am Case Study: Title Insurance/Settlement Services This panel discussion will cover different models for CUSOs entering the business of Title Insurance or Settlement as it pertains to real estate lending. Panelists will include: Michelle Dean of Bethpage FCU; Victor Puliafico of Langley Financial Services and Dennis Godfrey of Navy Federal Financial Group.

11:45am Obtaining and Using “Competitive Intelligence” What is the definition of Competitive Intelligence and how can it be used in your organization? George Scott is the President of Level Five Consulting. George is an expert on this topic and will provide his insight into this fascinating area.

1:00pm Farewell Networking Luncheon Buffet

2:30pm Open Discussion Session

The leaders of today will determine the future of the credit union industry.

Never before have there been more opportunities to deliver products and

services that can distinguish you in the financial services marketplace. But, just

as there are more opportunities, there are also more obstacles.

At the 2004 Leadership Conference in Phoenix, we will be addressing

how credit union leaders—individuals like you—can develop an aggressive

entrepreneurial attitude that can allow you to grab market share and position

yourself for future success.

Specifically we will be dealing with such issues as marketing strategies, human resource options, profitability

standards, incentive programs and compensation packages.

Unlike the past, credit unions will require a new attitude to cut through

the clutter of competition. Join us for a few intense days that are jam-packed

with the information you want and need to maintain leadership in your market.

FOR ENTREPRENEURIAL MINDED CUSO AND CREDIT UNION LEADERS • JW MARRIOTT • PHOENIX, AZ • SEPTEMBER 15-17, 2004DIRECTORS CONFERENCE KAUAI, HAWAII

Recent headlines in both the for-profit and non-profit worlds have clearly pointed out that the roles of Board

Members are under increased scrutiny and are being held to higher standards.

Changes in the regulatory environment are creating new challenges and

opportunities for credit unions that can either launch them to new levels or leave them stunned and confused.

Many of the keys to the future of your credit union are clearly in the hands of

your Board of Directors.

At our 2004 Directors Conference, in breathtaking Kauai, attendees

will learn about critical governance issues, discuss product development

opportunities and discover marketing, communication and branding strategies.

Every session is designed to empower directors and make them one of the most valuable assets that the credit

union can claim.

Don’t miss a significant event in a spectacular setting!

Wednesday/November 106:30am Golf at the Kauai Lagoons Golf Club (Kiele Course)

2:30-5:00pm Pre-Registration, Internet Café

3:00pm CEO Panel Discussion The job of the credit union CEO is changing. With the change of pace in the financial services marketplace and the number of competitors increasing, how will credit unions need to be positioned in the future? What are the views of our panel on how their organizations will deploy CUSOs in the future?

7:00-9:00pm “Welcome to Kauai” Luau Reception Join conference participants and their guests on this island paradise for a wonderful evening of Hawaiian culture, food and beverage and authentic entertainment. This will be the perfect end to your first day in paradise. Spouses welcome!

Thursday/November 118:00am Networking Buffet Breakfast Enjoy your breakfast and our “NEW” networking format. Select table seating based on pre-determined subjects such as product based (financial services, mortgage lending, business services, operational efficiencies and technology) or governance issues (director education, recruiting, board meeting structure.

9:00am The “Real” Future for Financial Planning with Robert Baranoff, LIMRA International Sales of mutual funds, deferred annuities, 401(k)’s and 403(b)’s and other savings vehicles have mushroomed as the Boomers have saved for their retirement. But now that that retirement is approaching, what will happen to those savings? Will your credit union be positioned to capture and/or retain the assets? Do you have the products and know-how to help the Boomers live out their retirement in the “payout” phase?

10:45am Product Marketing: Creation to Communication with Lisa Renner In today’s environment of deregulation and increasingly demanding members, credit unions are feeling pressure to innovate. Nine out of ten new products will fail within the first two years because they don’t meet a member need. Embrace a member-centric approach to product development and achieve a sustainable competitive advantage.

12:15pm Networking Luncheon Your opportunity to connect with peers who can help give perspective on issues your credit union/CUSO are facing.

1:30pm Transitions: Reworking Your Credit Union’s Brand with Jerry Jamison Take a step-by-step tour of one credit union’s transition from a long-standing logo and brand to a fresh new look. Examine the pitfalls and challenges as well as the benefits and advantages.

Actual examples are used throughout this fascinating case study. If you see any marketing, advertising or brand transition in the future, this session is a must for you.

3:30pm Open Discussion With the endless number of important topics and issues at hand, the opportunity to hear commentary from conference participants will bring clarity to the information presented and discussed. Useful and creative information may be the key to assessing whether your organization is near the top of your class or needs more work!

Friday/November 128:00am Networking Buffet Breakfast

9:00am The Changing Role of Credit Union Board Governance with Dr. Thomas C. Davis In the wake of the meltdowns of Enron, WorldCom, Tyco, and Quest, many experts have called for increasing Board regulation. What is needed is new thinking about how corporate boards should function and be evaluated. This is true for credit union boards as well because the corporate governance debate in the United States is spreading from for-profit organizations to non-profit organizations. This session will focus on how the Board can provide a competitive advantage and function as a strategic asset.

10:30am Panel Discussion: Integrating the CUSO & CU One of the most critical issues facing many of the nation’s credit unions and CUSOs is how and when to integrate. Financial services like investments and insurance, real estate lending, and now business services are but a few of the disciplines which have been tested, worked and reworked in order to find the formula for success. With changes in regulations, the declining number of credit unions and the highly competitive and sophisticated marketplace, what is the right recipe for your organization?

11:45am Developing an Entrepreneurial Attitude with Joe Saari What does having an entrepreneurial spirit or attitude really mean? What entrepreneurial leadership qualities does your organization need or require for the future? Joe teaches a class on entrepreneurship and has gathered research exclusively for our conference. In the future, it will be imperative for directors to be more aware of entrepreneurship and these skills as you guide your organizations.

1:00pm Farewell Networking Luncheon Buffet

2:15pm Open Networking Discussion Groups Join participants in this round-table format to address some of the most important topics on the minds of volunteers and staff for the future of Credit Unions and CUSOs.

BUSINESS STRATEGIES & MARKETING FOR CU DIRECTORS • KAUAI MARRIOTT RESORT • LIHUE, HI • NOVEMBER 10-12, 2004DIRECTORS CONFERENCE KAUAI, HAWAII

The First Full-Service Marketing CUSO www.beyondmarketingllc.com

Contact us at: [email protected]

E-Marketing

Web Development

Advertising & Promotions

Strategic Planning

Market Research

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Vic PuliaficoVictor Puliafico is the President of Langley Financial Services, LLC, the wholly owned subsidiary of Langley

Federal Credit Union. Vic has expanded their CUSO’s services by adding a variety of insurance services, acquiring an existing tax preparation service, creating an in-house P&C agency and forming a joint venture title services company.

Dennis Godfrey Dennis J. Godfrey is the President & CEO of Navy

Federal Financial Group, a wholly owned subsidiary of Navy Federal Credit Union. Navy Federal Financial Group enables the credit union to provide members expanded financial services and certain types of insurance.

Tom GlattThomas Glatt, Sr. is the President of Counter Intelligence Associates, a full service consulting,

training and development resource for financial institutions, nationwide, providing services to individual institutions, trade associations & regulatory agencies.

Joe Saari Joe Saari is CEO and Co-Founder of Precision Information, LLC. Joe is a registered investment advisor

and member of the Governor’s Task Force on Financial Education in the State of Wisconsin. A recognized thought-leader on the topic of financial education, Joe has been a featured guest on programs such as CNBC’s Squawk Box, Bloomberg Personal Finance and CNN’s Your Money.

Bob BaranoffRobert M. Baranoff, FLMI, LLIF is Senior Vice President/Research of LIMRA International. Baranoff is

responsible for LIMRA’s North American research program, including monitoring industry results and tracking the strategic issues that are and will be affecting the financial services industry.

Lisa RennerLisa Renner is CEO of Beyond Marketing, LLC, the first full-service marketing CUSO with comprehensive experience

in strategic planning and developing successful marketing strategies to generate revenue for credit unions and their affiliates.

F E A T U R E D S P E A K E R SPHOENIX KAUAI

Conference Fees:$695/Early Bird Member RegistrationPhoenix Early Bird Deadline: July 30, 2004

Kauai Early Bird Deadline: September 15, 2004

$795/Member & $895/Non-Member$125/Golf Outing & $150/Guest Dining FeeVisit website for hotel reservation information

Register Today! Call 888/462-2870 or email [email protected]. Or go online: www.nacuso.org

Presort StdU.S. Postage

PAIDRoper Mail

PMB 3419 Via Lido, #135 Newport Beach, CA 92663

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SPONSORS

The First Full-Service Marketing CUSO www.beyondmarketingllc.com

Contact us at: [email protected]

E-Marketing

Web Development

Advertising & Promotions

Strategic Planning

Market Research

E X P A N D I N G O P T I O N S

E X P A N D I N G O P T I O N S

The passage of the

amendments to the

NCUA’s Member Business Lending

Regulation in September is evidence of

a healthy and vibrant regulatory environment. The

Credit Union Membership Access Act (“Act”) put restrictions

on the ability of credit unions to meet the business lending needs of

their members. The restrictions were not the result of an analysis of the ability of

credit unions to serve the business market or safety and soundness considerations. These

restrictions were part of the political price that credit unions paid for the passage of the Act.

By Guy Messick

CUSOs AND LOAN PARTICIPATIONSIN BUSINESS LENDING

E X P A N D I N GO P T I O N S

NCUA and the state credit union regulators have been

examining ways to expand the options that credit unions have

in providing member business loans within the parameters

established by the Act. Seven state credit union regulators

(Washington, Maryland, Missouri, Wisconsin, Oregon, Texas

and Connecticut) have persuaded NCUA to approve state

business lending regulations that have extended the powers of

their state chartered credit unions to provide business loans.

For example, most of these state business regulations permit

unsecured loans and loans without personal guarantees, having

demonstrated to the NCUA that such loans could be made

within acceptable safety and soundness standards. In light

of these changes at the state level, NCUA has reexamined its

own regulation and has made many changes which applies to

federally chartered credit unions and state chartered, federally

insured credit unions in the other forty-two state.

There will be many commentators that discuss the changes

to the regulation. I thought that I would focus on the use of

CUSOs and Loan Participations in providing business services.

As many of you know, these are two subjects near and dear to

my heart.

CUSOs as Business Services Providers CUSOs have been used for several years as a means to aggregate

the expertise to provide business loans. Examples of this CUSO

are Telesis Partnerships, Inc. of Chatsworth, California and the

Business Lending Group of New London, Wisconsin. These

CUSOs have internal and external resources that are able

to solicit, underwrite and service business loans, principally

loans that are secured by commercial real estate. Their credit

union clients are able to originate loans to their respective

members (“Member Loans”) and participation interests in

loans originated by other credit unions in a more efficient and

economical manner than if each credit union accumulated

their own independent resources. The amendments have

not changed this role for CUSOs. My experience is that the

Business Services CUSOs are beginning to flourish. It is a very

hot area for CUSOs.

There is no doubt that business loans will provide a

much needed boost to credit unions searching for lending

opportunities, but loans are just the tip of the iceberg when it

comes to servicing the micro and small business market. All

businesses need depository services but not all businesses need

loans. The service and fee income opportunities for business

depository services are much larger than the business loan

market. Experts agree that a financial institution has to have

both deposits and loans in order to successfully serve the micro

and small business marketplace. Credit unions are beginning

to use their Business Services CUSOs to provide the expertise

to offer business depositary services. Since most credit union

information technology providers do not have viable solutions

to serving the business market, CUSOs are being considered

to obtain a collective IT solution for the business depository

services. Note that the Act does not impose any limitations on

credit unions providing business depository services.

CUSO’s as Business Lenders The amendments permit the CUSOs to actually make business

loans. Most credit unions have a demand for loans. The

question is why would a credit union run a loan through its

CUSO and not the credit union? The answer could be one of

the following reasons:

Loans to Non-Members. CUSOs can grant loans to non-

members. Keep in mind that CUSOs still have to primarily

serve members of the affiliated credit unions. Thus, a CUSO

has the ability to have a minority of its business loans with non-

members.

No Restrictions on the Types and Number of Loans. CUSOs

are not confined by the limitations in the Credit Union


“There is no doubt that

business loans will provide a

much needed boost to

credit unions searching for

lending opportunities, …but loans are just the tip of the iceberg when it comes

to servicing the micro and small business market.”

Membership Access Act or the NCUA Rules and Regulations. If the credit

union is in danger of exceeding its regulatory limit, the CUSO can be the lender.

Manage Loan and Regulatory Risk. If a credit union had a non-conforming

loan or a loan that had a higher risk factor than the credit union is comfortable

with, the credit union could place that loan in its CUSO. For example, if real

property secures a loan and the credit union belatedly learns of environmental

problems on the property that it does not want to deal with on a default, the

loan could be sold to the CUSO. Another loan might have financial ratios that

are not within the credit union’s polices but the loan risk is reasonable. In that

case, the CUSO could take the loan.

Raise Outside Capital. There are practical limitations as to how much capital

is available to a CUSO for lending. A credit union can not invest more than

1% of its paid-in capital and surplus in all its CUSOs. A solution to this

regulatory restriction is to raise capital outside of the credit union. A CUSO

can raise outside capital by selling a portion of the CUSO to other credit

unions or to non-credit union investors. Lenders need capital to loan. If there

is strong demand for loans, more members will be able to be served at a lower

cost of funds than if the funds were borrowed by the credit union. The CUSO

can grow as big as it needs to in order to serve the member and non-member

marketplace.

Create Marketable Value. A successful lending CUSO will create value for the

investors that can be sold and realized at a later time.

Loan Participations Loan participations are very valuable tools. They can be used to allocate

risk among two or more credit unions. Originating credit unions use loan

participations to generate liquidity. Purchasing credit unions use loan

participations in lieu of purchasing investments with their excess cash.

In business lending, loan participations are also used to manage the Act’s

aggregate business loan cap (12.25% of total assets). In the proposed

amendments, NCUA was not going to count participation interests in business

loans in calculating the aggregate cap. In the final version of the amendments,

loan participations in business loans are counted toward the purchasing credit

union’s aggregate loan cap. As for the originating credit union, the amount of

the loan participation sold is removed from the amount counted toward the

24 • SHARE • SUMMER 2004 SHARE • SUMMER 2004 • 25

24 SHARE • SUMMER 2004

E X P A N D I N GO P T I O N S

originating credit union’s aggregate loan cap as long as the

participation interest is sold without recourse (the risk of

repayment is shared by all participants in proportion to

their participation interests). For example, if a credit union

that has a $100,000 business loan to its member and sells

50% of the loan to another credit union, each credit union

counts $50,000 toward their respective aggregate loan cap.

This amount is reduced as the loan is paid down.

Note that a credit union that qualifies for Reg Flex

status can buy the business loan for another credit union

outright. Yes that is right. They can buy the whole loan

made by another credit union to its member. This would

be a non-member loan to the purchasing credit union.

A credit union can not exceed its aggregate loan cap for

loans made to its members. However, if a credit union’s

aggregate loan cap would be exceeded by the sum of the

outstanding balances of Member Loans, participation

interests purchased and non-member loans purchased (for

Reg Flex Credit unions), the credit union can apply to the

NCUA Regional Director for permission to exceed the cap.

NCUA is drawing a distinction between Member Loans

on one hand and participation interests and non-member

loans on the other hand, as the language of the Act only

restricts the credit union’s ability to lend to its members.

NCUA understands that credit unions could play games

to avoid the aggregate loan cap for Member Loans by

trading loans back and forth. This is the reason why the

application for Regional Director approval to exceed the

cap includes a certification that the non-member loans

and loan participations are not being used in conjunction

with one or more other credit unions that are trading loans

solely for the purpose of avoiding the cap.

Coming Full Circle Credit unions were originally formed in Germany to help

the farmers and merchants who could not get credit at

the banks for a reasonable cost. Credit unions have come

full circle and to again serve the small business market.

CUSOs and loan participations are two powerful tools to

help credit unions be successful.


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There’s no doubt that investment services are growing to be an essential part of the credit union package that members expect and enjoy. With the regulatory picture rapidly

changing, now is the time to carefully examine whether to provide these services through a

CUSO or as part of the credit union. As a member of NACUSO, you have exclusive access to

Bob Dorsa and his 20 years in the credit union industry as well as a wide range of additional

resources. NACUSO Consulting is available on a contract or hourly fee basis to review your

present situation and make recommendations that will maximize your system and profitability.

Dozens of credit unions have already taken advantage of this valuable benefit and are more than

pleased with the results. Following is a list of credit union services that are regularly reviewed

through the consulting process:


Time for a New Perspective?

“NACUSO President Bob Dorsa has been an invaluable resource to First Resource Federal Credit Union. Bob has worked with our credit union in developing our growth strategies and new business opportunities. He assisted us in determining the best structures and business models for these growth scenarios. Bob has also helped match our organization with the appropriate partners to implement these projects.”

Dave Weichhand President/CEO First Resource Federal Credit Union

“I always talk about the wonderful things we pick up from NACUSO and encourage people to join. I really believe you’re just the group we needed to associate with after our first meeting. Keep up the fine work!”

Ariel Chun University of Hawaii Federal Credit Union

• Investment products including variable and fixed annuities, mutual funds, retirement

planning services, 401k and other investment strategies, Registered Investment

Advisory, discount and on-line brokerage services

• Insurance products such as: life, health and supplemental health, long term care,

disability, umbrella personal liability, auto and homeowners, title insurance on real

estate loans, extended auto warranties and GAP for vehicle loans, debt cancellation,

AD&D, major medical and commercial lines for businesses

• Trust services

• Business services including business lending, payroll services and commercial insurance

• Real estate lending and loan servicing, settlement services; brokerage and dealing with

realtors and purchase money real estate transactions

• Collection, accounting, marketing, auditing and other operational or administrative

CU services, credit card processing, human resources management, staff training,

disaster and business interruption planning and web site design and maintenance

• Shared branches, facilities and or ATM Network Management services

• Automobile brokerage or locator services

NACUSO Consulting Services can help you determine when to use a CUSO and when not to.

For more information on NACUSO Consulting or to discuss your organization’s situation, please call Bob Dorsa directly at (702) 270-3863.

E x c l u s i v e B e n e f i t f o r N A C U S O M e m b e r s


Benchmarking, performed correctly, is a powerful tool for improvement. Otherwise, it is just the latest trend in spin. HIGHER

HIGHER

SHARE • SUMMER 2004 5

A BENCHMARK

GROUND“As I celebrate another anniversary in the credit union industry, I find myself asking the same question I have asked over and over again, where are the “new” credit union members coming from?”

THOUGHTS ON TAKING IT TO THE NEXT LEVEL__________


According to the U.S. Bureau of the Census, the resident population of the United States, projected through May, 2004 is 293,325,850. This is based on the following facts:

__________________________________________________

__________________________________________________

THERE IS ONE BIRTH EVERY 8 SECONDS

THERE IS ONE DEATH EVERY 12 SECONDS

THERE IS ONE IMMIGRANT ENTRY EVERY 24 SECONDS

MAKING A NET GAIN OF ONE PERSON EVERY 12 SECONDS

______________________________

______________________________HIGHER GROUNDHIGHER GROUND


BUT DO THESE FACTS MEAN ANYTHING FOR CREDIT UNIONS?Take a look at this: the credit union industry is estimated

to include approximately 88 million individuals. Simple

math allows us to conclude that there are approximately

two and one-half that number of people who do not

yet belong to a credit union. Again, where can we find

new members?

Unfortunately the answer is not an easy one. The

competition for consumer and business financial

products and services has never been greater! Add to this

the incredible changes taking place in the distribution

methods as well as newly developing business models and

advertising strategies and the question looms even larger.

I just heard a news flash that

McDonalds, the recognized worldwide

leader in fast foods, is going to be

testing DVD rentals in the Denver

market. What does a DVD rental have

in common with a Big Mac? Beats me, but clearly the fast

food giant believes its distribution channels can deliver

more than they are at present and has a plan to make

that happen.

This also brings me back to my thoughts on credit union

membership. How can we make growth happen? What

exactly is it that drives consumers to open accounts with

credit unions? Is it convenience, pricing, brand recognition,

product differentiation? It may be all or none of the above.

Still, this is the question you and your organization must

address very carefully. The answers hold the key to your

future direction and strategies you will need to meet

your goals.

SHARE • SPRING 2004 28

For the past 20 years CUSOs and credit unions have

experimented with various non-traditional

products and services designed to appeal

to existing members. I emphasize

existing members because I really

don’t think we have been aggressive

enough in our strategies to attract people to

the credit union way of banking. I usually point

to media advertising in support of my argument.

Many well known financial institutions spend millions

and millions of dollars on advertising. Television has been

one of the primary advertising sources for many years—a

media now comprised of both network TV and cable.

Once again, advertisers have used some very clever themes

to get your attention. What about the AFLAC duck or

the GEICO gecko? Neither animal has much in common

with insurance but both seem to attract attention. More

so evidently than the Taco Bell talking Chihuahua. Clever

or corny? Who is to say, but each sure gets their share of

airtime and has made a mark on modern pop culture.

Once again my point is that designing financial products

is but a small part of achieving our objectives. Let’s review

some of the possibilities we may be overlooking.

Say what you will about the GEICO

gecko or its clever parodies but the

fact is they are working. Compare

that to the fact that the aggregate

amount of automobile insurance premiums written in the

credit union system does not even amount to enough to

measure against the leaders. Yet a credit union’s primary

lending product is auto loans. Where is the disconnect?

Why can’t we place more emphasis on packaging auto

insurance with credit union auto lending? Through

Incidental Powers, most credit unions no longer need a

separate organization (CUSO) to offer these products.

The credit union now has the power but seems to lack

the desire to take on heavyweights in the auto

insurance market.

Let’s examine another opportunity: real estate

loans, not just for home equity but also for home

purchases. As interest rates have fallen, more

consumers than ever can qualify for a home loan.

However this has not resulted in any meaningful

gains in outstanding real estate loans at most credit

unions. In fact, even though 2003 recorded more than

$3.3 trillion of total real estate lending activity, the

percentage held by the credit union industry dropped by

almost .5 of 1% to 2.5%!

In my opinion we just cannot sustain these kinds of lapses

in opportunities while our competitors take full advantage

of these situations. Furthermore, when we miss these

opportunities we not only lose one product (the home loan

itself ) but perhaps four or five.

Studies have validated that credit unions have a product

penetration rate four to fives times greater when they

extend a home loan to a member than when not. In

addition, when we get the home loan application

it also abounds with great information about that

member and their family. Ancillary products

such as home owners insurance, life

insurance, disability and perhaps

even retirement planning figure

into the equation.

The demographics of consumers

recording these types of transactions

are the very same consumers

we seek as future credit union

members. We must be very

careful to remain relevant to all

generations and ethnic groups, or

suffer what may very well be some

unpleasant non-growth outcomes

in the future.



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345

HIGHER

HERE ARE FIVE THINGS YOU CAN DO IMMEDIATELY TO JUMP START MEMBER GROWTH!

I challenge you to take your credit union or CUSO to the next level where you should

find even greater success. The opportunities are there…now go grab them!

GROUND

1


Carefully examine what is available to your credit

union under Incidental Powers. Ignoring the integration

of dynamic financial products into your credit union’s

product menu is unacceptable and will inevitability leave

you at a disadvantage when compared with other financial

providers. If you are unable to offer these products on

your own, affiliate with a credit union or CUSO who does

offer these products. Don’t send members seeking another

financial institution because your organization has not

addressed key issues.

Examine how your credit union’s brand, name, image

and awareness can be disseminated throughout your

community or member service area. Check out local

cable advertising or other dynamic methods of “spreading

the news.” How much does your credit union participate

in charitable events in your community? Maybe someday

credit unions can sponsor a professional golf tournament

instead of leaving that to Bank of America and the

automobile manufacturers?

Review your organization’s sales and marketing strategy

related to training of staff. Often due to the fact that

your staff is not properly prepared to properly solicit the

business from your existing members or unable to obtain

your appropriate “share of wallet” when new members join.

Conduct market surveys or consumer focus groups

to determine exactly what consumers in your market

service area want. This should provide great insight into

what products you will need to integrate or which existing

products are in need of an upgrade.

And, finally, always remember to communicate,

communicate, communicate. Don’t be afraid to tell

your members how good your products and services are.

However make sure that when you tell them how good you

are—be sure to live up to their expectations.

You meet theirneeds for savingand borrowing —but what abouttheir estate?

1436-P1477NACUSO(0204)

Trust services — a new way to reach your high-net-worth members — and build loyalty.

Round out your financial solutions by adding trust services.

The MEMBERS Trust Company can help manage estate plans

and provide professional trust services to your high-net-worth

members. You’ll benefit from having assets managed by

MEMBERS Trust Company, and you’ll build loyalty by helping

members preserve their wealth and protect their families.

In the process, you can also make a strong case for your

credit union to be their primary financial institution…for

life. You’ve helped them manage every other financial

matter. Now help them with reliable, comprehensive trust

services, available through a national trust company designed

for credit union members. For more information, contact

your Account Relationship Manager at 1-800-333-2644,

or visit www.cunamutual.com.

MEMBERS Trust Company

©CUNA Mutual Group

C U | M e m b e r S o l u t i o n s | F i na nc i a l S o l u t i o n s | P ro t e c t i o n S o l u t i o n s | E m p l o y e e S o l u t i o n s | L e nd i ng S o l u t i o n s

Stairway Heaven - NACUSO · stairway to heaven? Let’s take a closer look at a new credit union...

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