Archive for category General

GROWING CREDIT CARD USAGE BODES WELL FOR CREDIT UNIONS

Posted by on Friday, 17 May, 2013

From Jennifer Kerry:

As the economy improves, so does consumers’ willingness to use credit to purchase those items and services they have put on hold for the past four or five years. This is happening in consumer spaces such as auto loans, appliances and other bigger ticket items. Consequently, we’re seeing a substantial surge in credit use. Balances are going up, issuers are offering higher credit lines and so is the number of bank marketing programs aimed at extending credit to consumers – including credit union members.

Upward economic trending is certainly being registered, and felt, in credit card usage.  According to TRK Advisors, consumers charged $53.5 billion in credit card debt in 2012 – five times what they charged in 2010. Credit union card balances are up 4.6 percent since November 2011, according to CUNA Mutual Group, compared to growth of only 0.4 percent for the rest of the non-CU credit card market. Also on the rise, debit and prepaid card purchases grew by 14.6% ($177 billion) between 2009 and 2010.  

With this increasing level of credit card activity, banks are on the prowl. They are already marketing new cards, balance transfer offers and increased credit lines to their best customers. While a rising tide lifts all ships, credit unions must be proactive and creative in promoting their credit card business or banks may take away your potential growth with their heavily advertised programs featuring Vikings and movie stars.  If you aren’t in the credit game aggressively, you’re not going to win. 

Credit Cards Are Good for Business

Although it seems obvious, it’s easy to lose sight of this: Credit transactions drive both interest and non-interest revenue at credit unions. A new survey by FinancialBrand.com of bank and credit union executives underscores the importance of credit cards for future growth of both industries. Credit cards were number five on the priority list behind auto loans, mortgages and home equity lines of credit. Number one on the list was utilizing mobile banking solutions to increase lending activity. However, when properly managed, credit cards can be the most profitable lending product a credit union can provide.

How can credit unions capitalize on the growing market for credit cards?

First, increase credit lines, especially to creditworthy members. Credit cardholders typically keep their usage under 30 percent of their total lines of credit. If the credit card you provide doesn’t have an adequate credit limit, your member may choose to use another card for their major purchases.

Second, a viable method is to add products that address credit-bruised consumers such as credit cards that are secured by funds in a credit union savings account.

Third, cross-marketing is also an effective way to increase card usage by your members. If debit and credit cards together make for an attractive primary financial package, promote credit to debit card holders and checking accounts to credit cardholders. And if you have great credit card programs, you can win business with balance transfer offers. Responding proactively to current demand and services keeps your credit union and its credit card business relevant.

Fourth, building on credit unions’ strong legacy of service and trust is a key for credit unions to market any products and services, but that is especially so when it comes to credit card business. Be knowledgeable about the competition and be sure to inform members about your fair and competitive interest rates and fees. We have a positive story to tell members – be their credit ally.  

The Future

Looking ahead, the horizon is filled with exciting new payment technologies, products and services that will greatly benefit credit card use and its growth. The expansion of mobile payment technologies, P2P payments, mobile credit card readers and online purchasing, to name a few, are set to drive credit and debit card usage in the near future.  

The future is bright but credit unions must plan now and be prepared for the new world of financial services technology and certainly credit cards are at the top of the list. If we in the credit union industry focus on the right priorities and have in place the systems and procedures to adopt advances, we can continue to provide a valuable credit payment vehicle that will build credit card usage and income as the market demand grows well into the future.

Jennifer Kerry is Vice President, Credit Issuer Processing, for CO-OP Financial Services, Rancho Cucamonga, Calif. She can be reached at jennifer.kerry@co-opfs.org and (800) 782-90432, ext. 7022.


Guide Members Down the Safe Path with Financial Counseling

Posted by on Thursday, 25 April, 2013

From Chris Wolgamott:path_arrow_200

I was six when my dad taught me to ride a bike.  This wasn’t an easy feat since I’ve always been a little clumsy. It took a lot of hard work and conquering of pretty daunting fears to keep getting up on that seat to try again. After many scraped knees, sore feet and even hitting a few parked cars, I was finally able to go on my first solo bike ride. What a thrill to gain a little more freedom, all thanks to a patient teacher.

Since becoming a financial counselor, I have met plenty of people who are clumsy with their money. For some members, it’s from no fault of their own. Due to underemployment, divorce, an economy that is limping along or health reasons, some well-intentioned people are struggling to make ends meet. Others just aren’t money savvy or have never had anyone teach them the basics of personal finance. Still others have made poor decisions they regret and are looking for reprieve. They all have one thing in common– they have come to Meritrust looking for guidance.

The 2012 Consumer Financial Literacy Survey prepared by Harris Interactive Inc. reveals many of the money management problems that plague our society: 33% of adults admit to paying bills late, 39% carry balances month to month on a credit card, 57% do not have a formal budget written for their household and 25% say they are spending more money this year than they did last year. According to the survey of more than 1,000 participants, 42% of adults would give their money management skills a C, D or F letter grade. That number is up 2% from last year.

Meritrust’s desire to focus on the well-being of our members, coupled with my financial literacy experience, led us to pursue my financial counseling certification through the CUNA Credit Union Financial Counseling Certification program. We have since developed a free financial counseling service for our members. Every meeting with a member, every consultation with our lending or collections department and every community organization that has shared resources has provided me the opportunity to accumulate more personal finance knowledge. More importantly, it has taught me compassion and given me the tools necessary to help our members maneuver through difficult financial situations. Not every encounter has been successful, but hundreds of members have benefited from our decision to focus more intently on meeting members’ basic financial needs – as well as hopefully helping them avoid some scrapes and bruises while on their path to financial independence and confidence.

As an adult, you won’t catch me on a bike all that often these days. But thanks to my dad, I have the skills to avoid the parked cars and mud puddles that undoubtedly arise – both on the road and in life. My goal is to help our members gain this confidence, conquer their fear and achieve the financial freedom they desire and deserve.

Chris will be speaking at CUNA Certified Financial Counselor School, June 9-13 in New Orleans. Register today to start earning your Certified Credit Union Financial Counselor (CCUFC) designation so your credit union can also help members down the path to financial freedom!

Chris Wolgamott, Financial Counselor at Meritrust Credit Union, has been in the credit union industry for almost 14 years at Meritrust in Wichita, KS and BECU in Seattle, WA. He spends a majority of his time counseling members as well as developing and teaching financial literacy classes to schools and non-profit organizations in Wichita and throughout the state of Kansas. Chris earned his Bachelors degree from Wichita State University in Management and Marketing, and obtained his Masters of Adult Education degree from Kansas State University. In 2009, Chris was given the opportunity to testify to a congressional sub-committee about the need for financial literacy and how credit unions in Kansas are meeting that need state-wide.

He also earned the CCUFC designation for financial counseling though CUNA in 2010 and was a 40 Under 40 award recipient from the Wichita Business Journal.


Vote for a CU Hero

Posted by on Monday, 22 April, 2013

From Steve Rodgers:

The CU Movement is blessed with extraordinary leaders. 

Every year at this time, we’re honored to present four exceptional leaders who you’ve nominated over the past year as Credit Union Heroes. These individuals exemplify the credit union philosophy of “people helping people,” and they’ve gone the extra mile to extend credit union service in their communities.

Now it’s time to choose one as the 2013 Credit Union Hero of the Year. Voting is open now through May 17.

Learn about this year’s nominees and cast your vote.  

Steve Rodgers is the Editoral Director for the Credit Union National Association. 


Core service principle takeaways from CUNA World-Class Service Leadership Institute

Posted by on Monday, 1 April, 2013

Rick Olson, President, Rick Olson Seminars

Every year, credit union 200153517-001professionals gather to seek insights from the masters of service culture, the staff of the Ritz-Carlton Hotel. Known for its staff empowerment practices and dedication to its customers, the Ritz sets the bar for the service industry, acting as model for other organizations to strive toward.

CUNA World-Class Service Leadership Institute, May 20-22, 2013 at The Ritz-Carlton, Denver, highlights that model and allows credit union professionals to experience top-notch service firsthand. By taking a look at core service principles and seeing them applied outside the credit union industry, attendees gain a comprehensive view of service as an encompassing mindset to live by and not just an element of running a credit union.

Having attended and facilitated CUNA World-Class Service Leadership Institute for a number of years, I’ve picked up on some of the eye-opening insights that have helped transform the service cultures of many credit unions.

What is it that separates the Ritz-Carlton from the rest of the service industry? I asked some past institute attendees from BayPort Credit Union in Virginia the same question. Angela Snyder, BayPort’s Sales & Service Supervisor and Sue Fernaays, VP of Member Services, both attended the institute in the past and discussed with me the valuable takeaways the Ritz staff has to offer:

Learning, not training

Despite being world-renowned for their training programs, ask any of the staff and they’ll refer to the Ritz as a learning organization, rather than a training organization.

What’s the difference? Simply put, learning is active, training is passive. The Ritz staff is hired to learn, not to be trained, because it is much more productive to teach someone who is trying to learn than it is to train someone who is apathetic about knowing the information presented. This mindset puts the responsibility on the staff to know their job and to keep on learning more.

Angela Snyder embraces the concept of learning rather than training, acknowledging the effectiveness of such a practice. “I think we have implemented this approach and we try to instill in our employees the desire to want to learn,” she reported.

Service as advertisement

When was the last time you saw a Ritz-Carlton Hotel commercial on television? The answer is ‘never’. This is because the Ritz doesn’t employ commercial advertising. Their philosophy is that, “Our empowered employees are our number one advertising strategy.” Word of mouth, as well as a pristine reputation, provides enough positive attention to keep their renown growing.

“I think the institute’s most engaging factor was observing the Ritz-Carlton staff,” said Fernaays on the matter. “Seeing their service models in place was beneficial across our organization. It’s ladies and gentlemen serving ladies and gentlemen and it’s very apparent that they believe in what they’re doing.”

Snyder and Fernaays agreed that even if BayPort can’t always compete with the rates of every other financial institution, they can make membership more than worthwhile through exceptional service quality. The BayPort staff has taken to referring to itself as “members serving members.”

The BayPort Way

In 2010, the BayPort Credit Union invited me to be on site for the launch of their BayPort Way service program. With the Ritz-Carlton’s service standards in mind, they designed a culture shift that prioritized service and staff empowerment.

Utilizing specific practices, such as the Ritz’s values card, which acts as a constant reminder of the organization’s elite service principles and morning huddles to provide motivation and a sense of community, BayPort has constructed a culture that they’re right to be proud of.

“The institute and the Ritz staff played a huge part in our five-year build to critical mass,” explained Snyder. “With the takeaway of the service models and the values card, our standards evolved into something much more like the Ritz. We have a morning huddle on a weekly basis in addition to our monthly corporation-wide meeting. The Ritz staff meets every day, but we think this schedule better fits our industry.”

The Ritz has unraveled the mysteries of pristine service and, for an outsider, such a culture can appear daunting, but for those who attend CUNA World Class Service Leadership Institute, at least a few standards take hold and can be put into practice in today’s credit unions.

“Every year, we go over things and see what new was brought out,” concluded Snyder. “It’s always been a part of us and always will be. It’s the best conference we’ve ever attended.”

Rick Olson is the President of Rick Olson Seminars and is the lead presenter for CUNA World Class Service Leadership Institute.

 For more information on BayPort Credit Union, visit: https://www.bayportcu.org/home.html.


Loans and LPs: Turning Credit Unions into Sold-Out Shows

Posted by on Friday, 22 March, 2013

The opening keynote of the 2013 CUNA Consumer & Residential Mortgage Lending School will be delivered by best-selling author and popular solutions presenter, Lee Silber. His presentation, titled Credit Union Rock Stars: Lending a Hand, will discuss the life and business lessons to be learned from rock stars and their careers.

Lee Silber, as the  King of Rock 'n Roll,  Elvis Presley

Lee Silber, as the
King of Rock ‘n Roll,
Elvis Presley

Lee was kind enough to sit down with us and answer a few of the questions regarding his unconventional plans for this conference’s opening session.

You’ll be presenting on the lifestyle of rock stars and applying that lifestyle to credit union lending practices. Can you fill us in on the connection there?

You’d be surprised what you can learn from rock stars. Really. Okay, there is the “what NOT to do stuff” (bad habits) to not emulate, but there are some valuable lessons we can use in our daily lives to be better at what we do at home and on the job. Let me give you one example off the top of my head. Credit unions would not exist without their members, which are a lot like fans of a band. Those of us who have been members of a credit union for a long time (I’ve been a member since 1985) are passionate, devoted, and excited to be a part of something special. Banks are huge (like a super group) and almost everyone has heard of them, but credit unions are more like that band that is popular, but a little less mainstream–which is cool because not everyone is into them and that makes us feel a little smarter for being a fan. Maybe we can connect a little better because the band isn’t as popular and answers their own fan mail or plays smaller venues so we can get up close and personal. Our small, but awesome band (Read: credit union) hasn’t sold out, is in it for the long haul, and does it right–and does right by us. We’re loyal and love them for what they do . . . and do for us. See, the analogy works. We become “Dead Heads” (Grateful Dead followers) or “Parrot Heads” (fans of Jimmy Buffett) because we identify with what these acts stand for. Those of us who have a special place in our hearts for credit unions are “Member Heads” for a good reason; the people at our branch are like rocks stars to us when we make an important financial transaction.

In your opinion, what is the most valuable mindset to embrace when approaching a conference designed to open up new perspectives for attendees, like this year’s school?

I could try and equate the conference with a rock concert, but that would be a stretch. That’s not to say it won’t be awesome in its own way, but you won’t need to hold your lighter up to get a speaker to do an encore–but if you want to do that for me when I speak, I would be stoked. Okay, back to the question. In the music business there are several conferences (NAMM and South by Southwest to name two) where musicians meet to connect, learn, and find out what’s what in the industry. If there is any business model that has been turned upside down, it’s the music business. Everything from the way music is made and recorded (analog to digital) to how it is sold (albums in music stores to digital downloads on iTunes) and enjoyed (from cassettes played in cars to satellite radio and smart phones) has changed and the smart people are willing and able to change with it–and get ahead. If we look at the school as a chance to see what’s happening and how it can help us do what we do better, we will be much more engaged in what we will learn. There are plenty of parameters that control what can be done in the music business just like there are when writing loans, and music executives know they must find creative and innovative ways to work within the rules (if you are thinking about the payola scandal of the past and other record label tricks, it’s much less prevalent today) and adapt in order to get the music into the hands of those who want and need it. Sound familiar?

Followers and loyalty: definitely as important in credit unions as in the rock world. What advantages do you see in a credit union striving to build fandom rather than indifferent memberships?

A large and loyal following is the key to longevity in the music business. There are many bands that alienated their core fan base by trying to please the masses when their “members” were happy with what they had been doing previous to their attempts to be something they were not just because it was trending–and tempting. They lose the true fans of the band and after (maybe) a short bump in sales and popularity are dismayed when the fickle fans leave for the next big thing.

Fans for life are what credit unions want. A good example is a band like the Eagles where you will have three and four generations at a concert all singing along to the old songs. If we can create the kind of loyalty where credit union membership passes from generation to generation, we have the same kind of “sales” for our greatest hits album that bands do with theirs. Today, music is promoted primarily using social media which is, in essence, word-of-mouth marketing. When we do our jobs right and make sure our members’ expectations are exceeded, they will do the rest for us by posting positive comments on Facebook, in person and in passing, to other people.

Some might argue that rock stars live irresponsibly. Do you think there’s something to be said for calculated irresponsibility that a lending professional could embrace?

If rock stars were perfect, they would be far less interesting. Yes, it’s about the music, but we also like to see something and someone special out there doing things we can’t (or won’t because we’ll be arrested . . . or worse) so we live vicariously through our flawed heroes. At this point you are probably thinking, ‘There is no way he can tie this in to this conference and credit unions’–and you would be right . . . and wrong. We need to be shining examples of fiscal responsibility, be trustworthy, and know what we are talking about. Aha, here is the part you didn’t see coming. Nobody likes a know it all. Nobody is expecting a robot to help them with their loan. Nobody wants to be judged. If we can be empathetic, understanding, and non-judgmental by sharing our own personal experiences (good or bad) to help a member make the right decision, we should. If we leased when we should have bought a car and learned a valuable lesson from it, why not share it? If we bought a boat and realized “b-o-a-t” stands for “bring on another thousand” and maybe encouraged a member to make sure the boat is checked and double checked before buying it, what’s wrong with that? Be real so that members know you know what you are talking about because you have been in their shoes.

LEE SILBER is the best selling author of 19 books including “Rock To Riches”. He will be presenting the opening keynote about the connection between credit unions and rocks stars. www.leesilber.com


An Englishman in DC

Posted by on Monday, 18 March, 2013

From James Marshall:

James Marshall

A lukewarm Saturday afternoon, I land at Dulles airport following an eight hour flight from London. I am in Washington DC for my first ever Credit Union conference in the USA. I certainly picked a good one. CUNA’s Governmental Affairs Conference, The GAC. Over 4000 CU professionals from all over the United States and now, the world.

2013 GAC Crashers

 

 

 

 

 

I had been lucky enough to be chosen by The Cooperative Trust (one of The Filene Research Institutes many projects) to go to the GAC as a Crasher. Now, being British, it would be very uncouth of me to crash anything. However, on this occasion I made an exception. On arrival, I was to be welcomed with open arms by a group of CU professionals all under the age of 30. And I have to be honest, after meeting each and every one of them I can tell you that they will all be CEO’s in the future. These people are driven, intelligent, personable, funny and most of all; dedicated to credit unions. Dedicated to serving our members. Dedicated to the future of our system.

All of this was new to me. A conference of this size just doesn’t exist in the UK. I returned to our national conference with an attendance of just over 300! I had never been involved in a young person’s network before The Cooperative Trust. This just doesn’t exist in the UK right now. However, I have now experienced ‘Crash the GAC’ first hand and can tell you all that this programme should never end. What it does not only for the young people in attendance but the movement as a whole is just incredible. Hopefully I can give you a small insight into that now.

As a part of ‘Crash the GAC’, we had a large focus on Member Business Lending. As does everyone right now I can imagine. Our group had been tasked with finding out as much about what small businesses really needed and then creating a product which we could prototype in order to get credit unions aiding small businesses and in this particular instance, Co-ops. At the end of the week at the GAC, we had multiple groups working on multiple prototypes which are going to be tested out over the coming months. I’m not going to tell you what these are, but instead implore you to go and find out yourself. Reach out to The Cooperative Trust, find out what they…. We, are doing. Help! Guide! Learn!

GAC Crashers Hike the Hill 2013

The GAC also gave me an incredible insight into the inner workings of Credit Unions and their ongoing struggle with legislation and governance in the USA. I was lucky enough to be invited to ‘Hike the Hill’ with the Wisconsin Credit Union League, of whom I again received the most incredibly warm welcome. Sitting in on these meetings with congressman showed me just how important lobbying your government at all levels really is. Both local and national. So if you think your voice doesn’t count, think again. Contact your congressman or congresswoman. Work together. And to carry on from Mr. Bill Cheney’s message, ‘Unite for Good’.

I would love to tell you so much more about my week, but sadly, I don’t think you’d have enough time to hear about my adventure. Just remember, your voice counts. Reach out to government of all levels to ensure that the future of credit unions is safeguarded. And finally, I will once more implore you to reach out to The Cooperative Trust and see all the amazing work they are doing for our industry.

James Marshall is the Marketing Manager at Plane Saver Credit Union, London, United Kingdom.  All are opinions are his own. They in no way represent those of his employer.


Effective Member Communications in Challenging Financial Times

Posted by on Friday, 8 February, 2013

From Mark Arnold:

Although it’s hard to believe, we are already into our second month of 2013! Whether you are still analyzing 2012 or well into your 2013 tasks list, one thing is certain: there is still uncertainty about our economy. Unemployment numbers could be better, jobs aren’t being added like we’d like to see and Congress is still debating budget and financial issues.

Your members are well aware of these troubling times and keenly tuned into financial news and information that can help them make more informed decisions about their own finances. How can your credit union staff communicate more effectively with its members during times like these?

Below are a few tips you can share to help you reach out to members:

  • Keep a line of communication open. In a down economy, some credit unions make the mistake of cutting back on their front-line staff, a receptionist or person who first works with members and potential members. Whoever is responsible for initial contact with members must be readily available and demonstrate a positive attitude.
  • Attitude is everything. The staff that responds to your members’ needs must be trained to deal with people in a positive manner, especially when times are uncertain and sales are down. Think of problems as “challenges” and look at them as team project to solve with members. If members are treated with special care, they will return it. Getting new members in the door is done with good branding and advertising. Keeping them coming back depends on how you treat them.
  • Listen to your members.  Listening to what your members have to say is one of the most important aspects of member service and also one of the most overlooked. Train your member service staff to give members time to explain their needs, their complaints and their expectations. Those extra few minutes of patience and listening can increase sales.
  • Follow-up on everything.  Member service cannot stop with one phone call or one email. Establish a system of contact to check on individual members. A simple and quick follow-up with a member to make sure everything is well establishes your credit union as caring and concerned. Follow-up also allows you to find out if your members need help with something they may not have yet told you about.

Communicating with members can be a challenge, even in the best of times. In times like these, however, it’s even more important. Doing what it takes to stay in touch with your members and prove your credit union is a reliable source of good information is critical.

Mark Arnold, CCUE, is an acclaimed speaker, brand expert and strategic planner. He is also president of On the Mark Strategies, a consulting firm specializing in branding and strategic planning. in 2013, Mark will be speaking at Consumer & Residential Mortgage Lending School, as well as CUNA Management School.


Avoiding the Procedural Trap and Living to Fight Another Day

Posted by on Tuesday, 29 January, 2013

Let’s just pick up right where we left off in my last post

“While nothing is certain, the promise of a vote seems as firm as possible at this stage.  Winning the vote depends on our ability to solidify and expand on the support we have in the Senate.  We’ll need the people most invested in the success of this legislation to speak out and speak loudly.  The deck is stacked against us:  while the bankers who oppose us are formidable, our greatest challenge to getting this done is the fact that the Congressional process has essentially collapsed.  We’re fighting not just the banks, but also historical Congressional gridlock.”

So, what happened?  Why was there no vote on MBL?

Credit union executives, volunteers and small business members showed up in December – hundreds took to Capitol Hill on a cool December afternoon.  Tens of thousands wrote their Senators and Representatives.  There was even a degree of interest on the part of the media in Washington and elsewhere in the country.  The problem we ultimately ran into was that the same gridlock that all but stopped substantive lawmaking in the 112th Congress dealt our MBL bill a critical setback just as our momentum was at its apex:  it was impossible to get the up or down vote on the merits. 

If anyone wonders what would have happened if we had pursued the vote we were offered, look no further than the outcome of the vote on the bankers’ bill to extend the Transaction Account Guarantee (TAG) program, which failed on a procedural vote to waive a budget point of order.  The same thing would have happened to our bill.  In fact, the two procedural votes on the TAG bill are very instructive with respect to what was happening in the undercurrent of the Senate floor debate in December. 

Ramping up for a battle on filibuster reform here in January, Democrats and Republicans were using every angle to make their points.  Senate Republicans, frustrated that the Democratic majority regularly blocked them from offering amendments to legislation on the Senate floor, had been filibustering the “motion to proceed” on almost every bill in the Second Session.  To prove their point, they allowed the TAG to go to the floor by voting for the motion to proceed, and once the Senate began consideration of the bill, Democrats used parliamentary procedure to restrict the consideration of amendments.  When that point was made, conservatives objected to the bill – at our urging – because it violated “pay as you go” budget rules, and the bill died when the Senate did not waive those rules.

The MBL bill’s fate would have been exactly the same.  There is no doubt that the bankers would have encouraged the same Senators who objected to the TAG bill to raise objection to the MBL bill, and our legislation would have died largely as a result of a debate on filibuster reform.

In Washington, there is a vast difference between losing a vote and not having a vote.  We opted not to take a quixotic vote to preserve an opportunity to pursue the issue again this year because the setback from losing a vote – even on a procedural motion – would have brought to a fast and final end any reasonable chance we had to increase the business lending cap.  That outcome wouldn’t have been fair to the thousands of advocates who have worked to advance this issue over the years, and it certainly wouldn’t have been fair to the credit union small business members who need and want access to additional credit from their credit union. 

As the new Congress gets underway, we’ll continue to press Congress to permit credit unions with business lending experience to continue to serve their members.  The good news is that while the deck is still stacked against us, the election brought us new supporters in the Senate and the House.  We expect the bills to be reintroduced in both chambers early in the session, and we’ll work closely with our Congressional champions to maneuver the gridlock on Capitol Hill that seems to worsen each week. 

 


Advancing a Legislative Agenda in the Face of Historic Congressional Gridlock

Posted by on Wednesday, 10 October, 2012

Stop me if you’ve heard this before:  What’s the opposite of progress?  Congress.

Whether your reaction is a groan or a quiet chuckle, we react to that joke because we all know there is an element of truth to it, especially these days. 

The 112th Congress stands to be the least productive Congress since World War II.  Of the approximately 11,000 bills introduced so far in the 112th Congress, only 169, or 1.5%, have been enacted into law*.  This enactment rate is just over half of that of the previous Congress, and less than half that of the 110th Congress. To get a sense of the historical magnitude of the gridlock, consider the fact the 80th Congress, dubbed the “do nothing” Congress by President Harry S Truman, enacted 7.5% of the bills introduced.  Since then, Congress has generally enacted between 3% and 6% of the bills introduced; the exceptions have been the Congresses in which the number of bills introduced has been substantially more than the norm.

Taking a closer look at the number of bills actually enacted, the gridlock in the 112th Congress is further magnified in comparison to its modern predecessors, which, on average, enacted 609 bills into law.

This is not to suggest that the 112th Congress is sitting idly by doing nothing.  Each chamber has passed its share of bills (613 have passed the House; 519 have passed the Senate), but few are getting to the finish line.  Throughout the Congress, the House has engaged in a practice of sending bills to the Senate that have no chance of being considered by, much less passing, the upper chamber.  While the Senate’s quantity of bills seems on par with its counterpart, most of these bills are honorifics; substantive lawmaking has been the exception not the rule.  Between April 2011 and August 2011, the Senate did not pass a single bill “regular order,” meaning it was brought to the floor, debated, opened to amendment and passed.  Digging deeper and looking at the committee level, the Senate Banking Committee, the committee to which the Credit Union Small Business Jobs Act has been referred, has reported out only four pieces of legislation – the Export-Import Bank Reauthorization, an Iran Sanctions bill, the Flood Insurance bill and a resolution establishing the committee’s budget. 

Congress’s ability to get even the most routine legislation enacted has been severely curtailed.  Legislation that historically receives broad bi-partisan support, like the farm bill, the surface transportation bill and the defense authorization bill, has encountered significant resistance and delay.  Congress enacted none of the appropriations bills before the end of the fiscal year.  Hyper-partisanship rules on Capitol Hill; consensus is elusive; gridlock is the result.

Now, there is a strong argument to be made that the best Congress is the Congress that does the least, but that’s not the case when you’re advocating an agenda that requires Congressional action.  The current legislative and political environment has made it extraordinarily challenging for credit unions – or any other group for that matter – to move its legislative agenda.

With Congress recessed until after the election, the focus now turns to the post-election – lame duck – session.  While Congress has already punted the appropriation process into the next Congress by enacting a continuing resolution which funds the government until March 2013, there is no shortage of issues which need to be addressed before the end of the year.  The failure of the Super Committee to produce a recommendation to reduce the deficit has set up a sequestration process which will result in significant spending cuts to defense and non-defense programs, unless Congress acts to reduce the deficit before the end of the year.  There are several tax provisions, including the Bush tax cuts, which will expire unless Congress acts.  The farm bill and the highway bill remain on the table.

Assuming the election produces the status quo – that is, that the president wins reelection, the House remains in Republican control and the Democrats retain their majority in the Senate – one could foresee the potential for a robust post-election session.  It is reasonable to assume that some of the acrimony dissipates post-election; defeated or retired members may feel a bit more freedom to participate in compromise approaches to the outstanding issues; and the leadership may have greater incentive to get issues off the table so they don’t hang over the next Congress.  However, even if those assumptions play out, there is no guarantee that it will produce solutions to problems that have divided Congress and the nation for so long. 

The clock provides significant leverage to those who seek to keep things from happening.  When Congress returns on November 14th, they will face a short week before Thanksgiving.  When they return after Thanksgiving, there will be just four weeks until Christmas.  After Christmas, the Congress has only a week until it expires and the new Congress convenes.  It’s a remarkably short period of time for a Congress which heretofore has demonstrated almost no ability to enact even the most routine pieces of legislation much less solve the nation’s greatest problems of the day.  Frankly, the fact that the chambers haven’t even been able to agree when to recess speaks volumes about the potential for the lame duck.

Prospects for a robust lame duck session, complicated under the best of circumstances, may completely evaporate if the elections result in a change in control of the presidency or either chamber of Congress.  If the president fails to win reelection, Congressional Republicans have little incentive to work with him after election; if Republicans gain a majority in the Senate, the Senate Republicans could effectively block all action until their numbers improve after January 3.  Likewise, if the Democrats were to hold the presidency and the Senate and pick up the House, it is not outside the realm of possibility that they would punt big decisions into the 113th Congress.

So, where does that leave groups, like us, who have common sense, job creating legislation ripe for consideration before Congress?  We’ve been promised a vote on the Credit Union Small Business Jobs Act before the end of the year.  Will we get the vote?  Will we win the vote?  Can we get this done? 

The answer to all of these questions can be “yes.”  Congress will be here for several weeks after the election and they will have measures on the floor.  While nothing is certain, the promise of a vote seems as firm as possible at this stage.  Winning the vote depends on our ability to solidify and expand on the support we have in the Senate.  We’ll need the people most invested in the success of this legislation to speak out and speak loudly.  The deck is stacked against us:  while the bankers who oppose us are formidable, our greatest challenge to getting this done is the fact that the Congressional process has essentially collapsed.  We’re fighting not just the banks, but also historical Congressional gridlock.


*All statistics are as of August 28, 2012, unless otherwise noted.


Every Credit Union Exec Should Visit CUNA

Posted by on Tuesday, 2 October, 2012

Guest Blogger, Mark Arnold

From Mark Arnold:

Madison. Home of the University of Wisconsin, Cheeseheads, microbrews, and quirky restaurants and bars. Madison is also home to the Credit Union National Association. In other words, Madison is like a credit union mecca.

I’ve been in the credit union movement for over 20 years and in all that time I had never journeyed to Madison. Last month, however, I had the opportunity to visit the CUNA grounds (filming a session for CUNA Mutual Group’s Online Discovery Conference). So in many ways, I made my trip to Credit Union Mecca.

While there I realized everyone involved in credit unions (whether a C-level executive, board member or management) should visit Madison and “The Campus” as it is sometimes referenced.

Here are a few reasons why it’s worth the journey:

  • The people—Both CUNA and CUNA Mutual’s staff are amazing. While Meghann Dawson and Courtney Cantwell served as great tour guides they also introduced me to many other folks. Everyone in CUNA had what I call the “credit union twinkle” in their eyes. They obviously are in business for credit unions and it shows with their many smiles.
  • The tunnels—There is a really cool tunnel system connecting the buildings together. It felt a lot like Washington, D.C. (or some type of bunker, I wasn’t sure which). For someone from Texas (where everything is above ground), the tunnel system was fascinating.
  • CUNA Mutual Group’s offices—Wow, talk about a cool place to just hang out. CUNA Mutual has this giant open space that encourages employee engagement. They even have a Starbucks. I counted dozens of meetings taking place just in the open air space (rather than traditional offices).
  • The Filene Research Institute—Although I didn’t get a chance to visit the Filene Research Institute (they’ve relocated their offices away from the CUNA complex and closer to the UW campus), I hear it is a special place as well. Their office and meeting space is designed for the highly creative (you will probably get a ton of ideas just from stopping by their place).

You might want to note that I visited during the summer—so a winter trip to Madison may not be in your best interest! However, no matter when you have the opportunity, I encourage you to take your own trip to credit union mecca.