# Making Credit Unions Mainstream



## CU Manager (17 Jan 2013)

Hi folks
Arising from (critical) comments on other threads regarding current credit union practices, what measures do you think credit unions should undertake to make them more attractive to working people who can access credit elsewhere? i.e. being more than "a poor mans bank".
My own thoughts (based on some of the criticisms of other threads)
* Services - need to offer online banking services, access to clearing system and debit cards
* Services - life insurance & pensions as an intermediary/advoisory capacity
* Services - budget system for mortgage, utilities, car/home insurance etc
* Loans - divorce lending from savings (not possible with current legislation)
* Loans - rates are fine in my opinion compared to banks

Any thoughts? All ideas welcomed


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## ontour (17 Jan 2013)

CU Manager said:


> being more than "a poor mans bank".


Serving those who have budgeting, financial literacy or credit history issues is something to be proud of.  The only issue I would have with the term 'poor man's bank' is that credit unions are not banks nor should they try to be.  They also serve women and children!



CU Manager said:


> * Services - need to offer online banking services, access to clearing system and debit cards



Credit unions wasted about €30m trying to create a system to provide the same services as banks.  EBS got in to ATMs, cards etc. but got out of it.  Credit unions should focus on the savings & loans products.  One possible exception to that thought process is that the credit unions could have challenged the post offices for processing bank cash transactions or social welfare/ revenue cash transaction processing.



CU Manager said:


> * Services - life insurance & pensions as an intermediary/advoisory capacity
> * Services - budget system for mortgage, utilities, car/home insurance etc


Credit unions should be providing much better financial education and advice.  EBS have recently started to market this service, credit unions should be the leaders in this space for people who can not do it themselves or afford professional advice.


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## MrEarl (17 Jan 2013)

Hello,

While I appreciate we live in an electronic age, it would also be useful if the local credit union opened at the weekend, or late into an evening or two.

Sadly, not only my own local credit union but also a couple of others in neighbouring locations appear to be reducing their opening hours, outside of M-F daytime & while I appreciate these offices are often staffed by volunteers, there still appears to be salaries charged to the Cr. Un. Financial Accounts each year so somebody is getting paid & perhaps they could be the ones, to staff the offices for a few hours an evening, or Saturday.

Those of us lucky enough to be working, often work M-F, 9 - 5pm or similar so cannot necessarily attend the offices during these or nearby hours.

Thank you.

Mr. Earl.


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## SarahMc (18 Jan 2013)

Im not sure the model does need to be reinvented. I think credit unions attract two types of customer, the 'poor mans bank' and the liberal middle class who like the mutual, cooperative rooted in the community nature.  You seem to be asking how you can attract customers outside these traditional groups? Why?


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## CU Manager (18 Jan 2013)

SarahMc said:


> Im not sure the model does need to be reinvented. I think credit unions attract two types of customer, the 'poor mans bank' and the liberal middle class who like the mutual, cooperative rooted in the community nature. You seem to be asking how you can attract customers outside these traditional groups? Why?


Why is because
1. "poor mans bank" type member is very difficult to lend to right now and many represent a very high risk of default
2. the middle classes are not borrowing
so susutainability requires CU's to find a way to appeal to a broader audience!


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## Bronte (18 Jan 2013)

SarahMc said:


> the mutual, cooperative rooted in the community nature.


 

That's the way I think of the credit union. I don't consider it the poor man's bank. 

CU manager you mentioned the following

_* Services - need to offer online banking services, access to clearing system and debit cards_
_* Services - life insurance & pensions as an intermediary/advoisory capacity_
_* Services - budget system for mortgage, utilities, car/home insurance etc_
_* Loans - divorce lending from savings (not possible with current legislation)_
_* Loans - rates are fine in my opinion compared to banks_

To get me to switch to 'banking' with a credit union would only require a current account that has 

online banking services
Debit cards
clearing system

My credit union allows me to transfer in my savings by direct debit from my bank. But I cannot do any real banking. Withdrawls from an ATM, a debit card etc. A facility whereby international transfers can be made into the account. Not sure if credit unions allow it but I'd also like to be able to pay ESB and Gas by direct debit as I currently do on my bank account. In addition I can pay rates to the the county council online with my visa debit, used to be laser, I pay the bins that way also. Then there are direct debits for life insurance. 

I would absolutely love to deal only with a credit union and not a bank and would switch all accounts in the morning if I could. CU Manager I don't think you should have taken the other post as only a criticism of credit unions. I know many people who love the CU and hate banks. I've never met anyone who hates a credit union.

I think operating outside Monday to Friday 10 to 3 or 4. Say a Saturday afternoon, not morning, and two late evenings, and two early mornings would help working people. The old banking hours used to drive me nuts and they're not much improved. An 8 am start two mornings, open till 9 two evenings and a Saturday would be really customer friendly. Close on a Monday or other day if necessary for the Staff. Why not. 

In relation to pensions and insurance, you don't have to get these via a bank. Others may say this is a service to be offered. But sure if you can offer me cheap house or life insurance and it's profitable for you then go for it. I know that a lot of my house insurance and life insurance was 'sold' to me 'willingly' by the bank when I got my mortgages, but they've got a captive audience when you're getting a mortgage and it's easier, in general, to go with them when dealing with the stress of a house purchase. They pull out the papers for same when you're filling out your mortgage document. The staff are of course driven by commission, but are under no obligation to tell you that. You are a captive audience. The amount of people who purchased unnecessary 'payment protection' insurance is testomony to that.

I'm not sure what the budgeting service is? Sounds good though. Do you advertise this?

I see no reason to have to save while paying back a loan. But I understand that's the way the credit union works. It's find when you start out with them, for the first couple of years until you have established trust with the credit union. This would be the initial loans for say, a holiday, xmas, to pay back a credit card, but then you need to move onto larger loans. Not sure if loans cost the same as banks. Would this be for car loans, do credit unions do loans for house extensions, not sure what their limits are. As my properties are 'security' for the banks it's easier for me to borrow for renovations/improvements/repairs from the bank at mortgage rates. But I would certainly borrow from the credit union if it was as cheap. I don't think credit unions can loan at mortgage rates.

I have relations who got a 'mortgage' from a credit union and others who borrowed to start a business etc . That credit union is one of those in trouble. But that's another story.


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## ontour (18 Jan 2013)

CU Manager,

To be beneficial to you, you should differentiate between what are people's wish list services and what services people are they willing to pay for.  Credit unions do not have the economies of scale of the banks so offering a wide range of card, current account, clearing services etc.  

I would like the credit union to offer a huge range of services but would that would have to be funded by fees, reduction in dividends or increase in lending rates.


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