Percentage of consumers who have heard something
from the financial industry but felt more negative.
– Edstrom Worldwide

Percentage of consumers who have heard something
from the financial industry but felt more positive.
– Edstrom Worldwide

Percentage of consumers who have received
no direct communications from anyone in the
financial industry about the financial crisis.
– Edstrom Worldwide

Percentage of those who feel fully confident in banks,
down from 31% who reported full confidence in 2006.
– Edstrom Worldwide

Percentage of people who are
less likely to trust their bank.
– Siegal+Gale

Percentage of those who think banks are using
TARP money to pay salaries and executive bonuses.
27% think the banks are just holding on to it.
– Edstrom Worldwide

4 in 10 Americans believe the current economic climate will force
them to retire up to 10 years later than originally expected…or not at all.
– ING Direct

The percentage of disposable income Americans socked away
in January, the highest personal savings rate in 14 years.
– Commerce Department

Percentage of Americans who expect to receive a federal
tax refund for 2008 but will be saving it, investing it
or using it to pay off debt instead of spending it.
– ING Direct

Percentage of those applying for mortgages
that were not rejected by any mortgage company.
– Greater Nashville Association of Realtors

Before last Friday, credit unions had remained fairly immune to the fallout from the financial meltdown. But with the implosion of U.S. Central and WesCorp, credit unions are now knee deep in the economic crisis.

Welcome to hell.

Credit unions have some serious explaining to do. What happened? Who did what when? What’s the difference between a “corporate credit union” and a “natural person credit union?” And the million-dollar question:

“Are credit unions safe?”

There are some credit unions who got started with the damage control over the weekend by posting updates about the situation on their websites. That’s a good start, but it’s only the beginning.

Here are some of the things credit unions — all of them — need to get started on immediately. Today. Now.

• Staff – They are going to be bombarded with questions all week. They are going to have to explain things in plain, simple English, which means they first must understand the situation themselves. And remember, every concerned member with a question gives you the opportunity to talk-up your strength and safety. Even if members don’t call specifically about the NCUA seizures, you should take the time to see what they’ve heard and offer reassurance.
• Website – Build a page dedicated to explaining what happened and what it means to members. Link to this page right off your homepage, preferably with a banner ad.
• Direct Mail – Craft a letter. Send it to all members. If you don’t have one in the mail by Tuesday afternoon, you’ve taken too long.
• Email – Send one in the next 24 hours.
• Public Relations – Don’t wait for the press to call you. Contact them right away. Don’t wait until Tuesday or Wednesday. Do it today. You may only have one chance to get the right story out. (Update: Here’s a good example.)

If you didn’t do business with either of the failed corporates, tell them. If you have a capital position worth bragging about, do it. You can’t overwhelm members with too much information in this situation. People are starved for information about the health and well-being of their financial institutions. Embrace this as a chance to fully explain your position.

When you’re done taking care of the most important communications priorities, you can circle back and take a look at all your other communications channels to see what else should be used to convey your message — statement stuffers, on-hold message recordings, newsletters, etc.

Bottom Line: Members are going to be scared as hell, so you need to do everything possible to reassure them. Fair or not, they are going to blame ANYTHING they perceive as negative — any change in rates, any change in fees, any change in their favorite teller’s attitude — on the implosion of the corporate credit union system.

Note: If credit unions go out of their way to reassure an anxious public now then find themselves taking TARP money sometime down the road, the industry will lose all credibility, all the good-will and all the consumer confidence that’s been built up over the last few months.

People don’t want to hear what most financial institutions have to say right now…that is, unless they are apologizing. As a recent Newsweek article points out that “Public anger at financiers is at levels last seen in Moscow circa 1917.”

The truth is that the financial industry has painted itself in a corner, one that it can’t advertise its way out of. It’s a difficult reality to accept (and one that probably won’t sit well with the 150 or so ad agencies following The Financial Brand), especially considering how comfortable most financial marketers are with running ads; ads are familiar, and easy to manage.

It helps to remember that ads succeed primarily at two things: selling stuff and building awareness. What they don’t do well is help a company clean up its image during times of crisis.

So what can a financial institution do?

“More TV interviews, speeches, and op-ed pieces,” according to Andy Bateman, CEO/Interbrand New York (an ad agency). “People want to hear directly from bank executives. They want to look these guys in the eye and believe them.”

That’s what Paul Stull, VP of Marketing/Arizona State Credit Union is doing. “I am spending nearly all of my time on PR,” he told The Financial Brand. “Actually maybe even a little more than that!”

But not every financial marketer is ready for the shift from ads and other traditional methods of disseminating messages. As Newsweek noted when bailout banks couldn’t explain what they’d done with their TARP money, “The well-heeled heels who flunked Risk Management 101 are now also failing PR 101.”

Stull cautions against what he calls “phoney, self-serving” PR, those hollow claims like “despite the economic crisis, we’re still safe and strong.” Where’s the proof?

“Not many financial institutions are ‘doing,’ most are just ‘saying,’” Stull observed. “Your message needs to be real and show what you are doing.”

While PR can help you get your message across, it is not a panacea that will repair the industry’s image. As Ron Shevlin, an analyst with Aite, cautioned, “Yes, banks can repair their image, but not by advertising or PR. It will take strong operational execution.”

Newsweek had a number of suggestions along those lines, things that some financial institutions have started to embrace:

• Cut the salaries of top brass
• Discontinue foreclosures
• Cancel junkets
• Buy shares of your own stock
• Temporarily discontinue late fees on credit cards

Bottom Line: If you’ve got something to say, PR is your best venue right now. Financial institutions have zero credibility (see the UPDATE in the comments below), so you need a credible messenger if what you want to say is to have any impact.

Tips for Working with the Media

Respond Quickly
If a reporter calls you, they are probably on a deadline — a short one. Get back with them as soon as you can. If you don’t immediately have the answers, ask them how much time you have to get back with them, then make sure you follow through.

Educate Them
Most journalists are responsible for covering an enormous number of issues. Just because they’re writing a story about the financial industry, don’t assume they know everything they should. You should avoid a lot of industry jargon, and spell out the acronyms.

Do they know what a capital ratio is and what it means? Do they understand loan loss provisions? Do they know the difference between the FDIC and NCUA? Do they know what defines a “failed financial institution,” and when the Feds will step in? Do they know credit unions are not-for-profit and not non-profit? Probably not.

Think Before You Speak
Don’t try to figure out what you’re going to say to the reporter while you’re on the phone with them. Figure it out beforehand. Sometimes it can help to write out what you want to say before you schedule an interview. Whenever you have the chance, ask the reporter if they can email you the questions they want to ask prior to the interview.

Reach Out
If you see a reporter writing about financial institutions in your area, give them a call or send them an email. Let them know you’re willing to help and work with them on their next article.

Have Basic Facts Ready
If you don’t have a press kit put together yet, now is the time. Start with a simple one-page overview about your financial institution, and include all the pertinent facts: assets, capital, cap ratio, customers, branches, years in business, etc. You can send this to reporters before or after interviews so they can reference such facts in their articles. Just to be safe, always include that you are insured by either the FDIC or NCUA.

Before September 2008, you would almost never see a story about credit unions anywhere in the news. For decades, the mainstream media essentially ignored this sleepy sector of the financial industry. But these days, the news media is pouring piles of positive press on credit unions at a dizzying pace. And from the looks of it, news outlets won’t stop singing the praises about credit unions anytime soon.

Reporters, eager to report on any ray of sunshine they can find in this dour economy, are frequently touting the safety, strength and stability of credit unions. There is a wide range of points these articles make, but the main themes include:

• Credit unions are not-for-profit and owned by members (no shareholders)
• Credit unions typically offer better rates and lower/fewer fees
• Credit unions have money to lend
• Credit unions are more willing to look at an individual’s credit situation when making loan decisions
• Credit unions have insulated themselves from the subprime mess
• Credit unions often service their own mortgage loans, requiring them to be more prudent in their lending practices
• Credit unions are local, and not run by Wall Street bankers
• Credit union deposits are insured through the NCUA up to $250,000
• Credit unions are well-capitalized compared to their bank peers

If you’re a credit union, these are the things you need to be telling your audience.

Here are some of the headlines and excerpts from mainstream news outlets… in just the last two weeks.

“Bad times for banks means boom times for credit unions.”

– Time Magazine

“With banks reeling, depositors turn to credit unions.”

– Triangle Business Journal

“Credit unions offer alternative to skittish banks.”

As the banking industry stumbles through the crisis that has gripped the financial world, consumers have a viable alternative to a traditional bank: a credit union.
– Chicago Tribune

“As economy swoons, more people are joining credit unions.”

With all of the troubles taking place in the financial industry these days, one sector that appears to have avoided the mess of subprime and other shaky loans is credit unions.
– Bellingham Herald

“The uncertainty surrounding banks is proving to be a blessing for credit unions in the state.”

– New Jersey Biz

“Banks’ losses prove to be credit unions’ gains.”

For the most part, area credit unions have sidestepped the worst of the financial upheavals that have taken down some of the largest banks.
– San Diego Business Journal

“As banks tighten credit, credit unions booming.”

The only trouble they have, they say, is getting the word out to more people that they are sitting on money and eager to loan it.
– Crain’s Detroit Business

“Credit unions a refuge in dodgy times.”

– News Wales

“Credit unions show stability in crisis.”

At a time when banks are staggering under losses from the subprime mortgage meltdown, most credit unions are dodging that bullet.
– Inland Valley Daily Bulletin

“In these rocky financial times, with banks going belly up, more people are turning to credit unions.”

– Fox Atlanta

“Credit unions increase in popularity.”

These days, a bank’s loss could be a credit union’s gain.
– Syracuse 10 News Now

“Credit unions are one division of the financial services industry insulated from recent chaos.”

– Seattle Post Intelligencer

“Credit unions a conservative alternative.”

– Maryland Gazette

Here’s a handy glossary to help you translate the news media’s coverage of the economic meltdown, courtesy of The Financial Brand.

“Flight to Liquidity”

Translation: “Mutual funds??? Are you kidding? My money is under my mattress.”

“Mark to Market”

Valuing something on your balance sheet at what it’s really worth. Accountants everywhere cringe at the alternative, which includes them wearing funny clown costumes.

“Credit Crunch”

Translation: “Your loan was declined. Don’t take it personally. Everyone’s loan is declined.”

“$700 billion”

Translation: “$850 billion.” Don’t forget to add in the wooden arrows.

TARP

1. Troubled Asset Relief Program.
2. An economic bandaid that — in relative scale — is wayyyyy bigger than a yard tarp.

“Downturn”

See “crisis.”

“Recession”

Comes in three flavors: Mild, Severe…and whatever this is right now.

“Depression”

1. A clinically gloomy feeling about the economy and life in general.
2. Don’t use this word. It’s taboo. It freaks people out. Besides, it’s just crazy talk… Right?

“Too Big to Fail”

Translation: “Don’t worry boys! Joe Taxpayer’s got your back. There’s trillions more where that came from.”

“Main Street”

The news media’s annoyingly euphemistic catchphrase for people like “you,” “me” and the other 320 million people who have to pay for this mess. (Chosen for its clever pairing with “Wall Street” in sound bites, see below.)

“Wall Street”

Charlie Sheen stars in this 1987 film about stratospheric (if not stereotypical) corporate greed. A generation later, it is recognized as the most effective recruitment video ever made.

“Crisis”

See “meltdown.”

“Confidence”

Another word for “trust.” Either way, it’s gone. See ya. Buh-bye…

“Dow Down 200”

1. Not too shabby! Anything better than -500 is a good day.
2. “Down a little” is the new “up.”
3. It must be time to buy, right? Okay, you first…

“Meltdown”

See “recession.”

“Volatility”

1. Wall Street codeword for “risk” (which in itself is a codeword for “downturn.”)
2. “Buckle your seatbelts folks!”

“This isn’t going to be pretty.”

Translation: It’s ugly.

Need more proof that existing market conditions are creating an optimal environment for credit unions to flourish? Here it is.

“As banks struggle, credit unions get rush of new customers.”

— The News Tribune

“Credit unions make sense now more than ever.”

— Wall Street Journal MarketWatch

“Consumers are now thinking seriously about switching
their cash from banks to credit unions.”

— Northwest Cable News

“Wachovia customers use their feet, head for credit unions.”

— Wall Street Journal MarketWatch

“We’ve run out of switch kits.”

— TAPCO Credit Union, in the News Tribune

“Credit unions have a chance to attract new members to savings accounts right now.”

— Seattle Times

“There is going to be tremendous loan demand. You’re going to have to tweak your strategies, and let more members know you’re there.”

— Dave Colby, CUNA Mutual’s Chief Economist in the Seattle Times

“Despite national downturn, local credit unions are thriving.”

— Wisconsin State Journal

“Credit unions are attracting new deposits.”

— Santa Cruz Sentinel

[The Financial Brand has another article about the opportunities credit unions have in this economy: The media falls in love with credit unions.]

So you’re thinking about running a “safe and sound” campaign? Here are some various perspectives to ponder as you craft your strategy.

====================================

Financial marketers are unsure about what to say:

“The situation is so fluid, it’s hard to figure out what message to
put out today that would be relevant tomorrow morning.”

— Matthew Harrington, US Chief Exec/Edelman Public Relations

====================================

There’s concern about fear-mongering:

“We wanted to strike the proper tone
between being informative and being alarmist.”

— Andrew Gray, Public Affairs Director/FDIC

====================================

Some people are okay with scaring the begeezus out of people.
Fear is a powerful motivator, so don’t be afraid to use it:

“Ads should tell people with money:
‘There is every reason to worry. That’s why we’re here.’”

— Gary Stibel in the New York Times

====================================

One expert warns that a message of reassurance could backfire:

“The last thing that customers need is a
‘everything is OK, trust us’ approach.
That will definitely get them worried.”

— Martin Bishop, Brand Mix

====================================

Some endorse a return to boring banking. Wrong.
Sharing your Five S story does not mean you have to be boring and lifeless.

“There’s something to be said for the old, conservative,
traditional banking model. The stodgy old businessmen may not
be fun and give you deals, but they give you…security.”

— The AP’s Emily Fredrix

====================================

It’s tough trying to figure it all out:

“It’s hard to be reassuring when
nobody knows how it will all pan out.”

— Rebecca Saeger, Charles Schwab EVP/CMO

====================================

There’s a lot of disagreement about what to say and how to sell the Five S’s, but pretty much everyone agrees on this:

“This is not the time for keeping to the course.”

— Gary M. Stibel, chief executive at the New England Consulting Group

Here are recent stories of interest from around the web.
Click on the hotlinks to read the full story.

Taking the Initiative: Credit unions don’t wait for leagues to run ’soundness’ ads

Wanton Wants: Americans’ addiction to borrowing root of crisis

Allegedly Expensive: BofA’s Countrywide settles fraud case for $8.4 billion

Post-Bailout: Financial brands twist in the wind

Carpe Diem: Wall St. woes create opportunities for a new level of dialogue

Fail! 75% of online banking sites can be hacked

What Can I Say? Advice to financial brand marketers

Meltdown Fallout: How the crisis morphs the online banking landscape

Denial: People think banks are bad, but “Not my bank!”

Pre-PR: EON Bank suggests a name change is on the horizon

Buck the Norm: A brazen Gen-Y promo for credit unions

U Can: An empowering campaign from an African bank

Squat: Cybersquat your own names and thwart crisis-phishing scammers

Here’s the story of the economic meltdown as told by one of Merrill Lynch’s economists. There are 76 slides  in this fabulous presentation. It includes 59 graphs that, together, paint a pretty ugly picture of what’s in store.

There’s a button on the far right of the Slideshare viewer that will make the presentation fullscreen (it’s the second-farthest from the right).

Here are recent stories of interest from around the web.
Click on the hotlinks to read the full story.

MELTDOWN FALLOUT

Marketing 180° “Credit” out, “saving” now in vogue as financial industry reacts

Another One Bites the Dust: Wachovia is the latest victim

Oh Canada: WIll one of the Big Six be next?

Chase+WaMu: Impromtu rebranding starts, ads planned

Stop the Presses: WaMu cancels all internet advertising

What the Meltdown Means: AdAge’s big directory of meltdown articles

FEATURE STORIES, OPINION & ADVICE

Interview: Wells Fargo’s Tim Collins is banking on social media

Gen-Y: A very meaty whitepaper and roundtable (PDF)

Insight: 7 videos to build your financial brand

Q & A: Massive interview with a Wells Fargo president

Not Dead Yet: But Barclays chief predicts the demise of plastic cards

Facetime: Video conferencing helps HSBC go green

NAMING

Bank X: This week your bank’s name is _____________ .

Sign Language: Blogger suggests bank needs a name change as it expands

Here are this week’s stories of interest relating to the economic crisis.
Click on the hotlinks to read the complete story.

Poof! Financial brands ranked among the top 100, then…

Note to Marketing: Cut the bull from Wall Street ads

Trust Me: Financial firms’ ads stress experience during volatile times

The Strength to Be There…Ha! AIG postcard strikes with heavy dose of irony

New Game Plan: Retooling your marketing for today’s economic realities

Carpe Diem: Wall Street turmoil creates golden opportunities for credit unions

$1.8 Trillion Bailout: Where’s the money going?

Northern Exposure: One Canadian thinks their rules will prevent U.S.-style crisis

Pissed Off: Credit union CEO rails against banks for what he thinks is cheating

Brothers Grim: Lehman another example of a bank brand failure

Ouch! That Hurts! Madison Avenue feels Wall Streets pain