Credit Unions' Biggest Enemy

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I really like credit unions.

No wait, I take that back. Truth be told, I couldn’t care less about credit unions. I like credit union people. It’s because I like them that I like to see credit unions succeed.

You see, I don’t believe that credit unions are inherently good. Anybody can claim that their mission is to help people. The proof is in the pudding.

This also means that I believe that banks (big ones, in particularly) aren’t inherently bad. Got news for some of you: I do business with a large bank. Have done so for many years. It treats me very well. And guess what: I’m not that delusional that I believe that I’m the only person it treats well (and you shouldn’t be, either).

But try telling that to the media, or to credit union people. They won’t hear it. Instead, it’s a constant stream of tweets with links to the MoveYourMoney thing. Or today, it’s a link to a CNNMoney article that says consumers’ relationships with big banks is the “equivalent of a dysfunctional relationship.”

What’s the reason for the perpetuation of this “dysfunctional” relationship? According to the article, it’s because “switching banks is simply too much of a hassle for many Americans.”

This is wrong. Absolutely wrong.

Switching banks is a piece of cake. One of the simplest things you can do. There is no shortage of banks that will be more than happy to make it a painless process. And if I’m not mistaken, there might even be a few firms that offer tools to banks and CUs to help them help consumers switch banks.

The overwhelming reason why consumers — make that some consumers — persist with a “dysfunctional” relationship is that they simply don’t care.

They don’t care enough about managing their money, or managing their financial life, or their relationships with their financial providers to switch. They’d rather spend their time researching the differences between guitar picks, or camera lenses, or whatever, than they would figuring what bank (or credit union) is best for them.

Credit unions’ biggest enemy isn’t the big banks. And it isn’t the difficulty of switching banks.

Credit unions’ biggest enemy is APATHY. When people care enough about managing their financial lives, they will care enough to find the right providers. (Which may — or may not — be credit unions).

The paradox here is that money is really really important to us, but managing it? Not so much.

For credit unions to succeed on a far grander scale, they have to get more people to care about managing their money. And not setting up big banks as some kind of Golem to be despised and shunned.

The trends are in CUs’ favor. There are three forces in play here: 1) The economy has forced people to become a lot more disciplined about managing their finances; 2) The tools available to manage one’s finances continue to evolve, and thanks to the Internet, they’re easier than ever to get data into and use; and 3) Gen Yers are whole lot more involved in the management of their financial lives than previous generations were at that age.

And yes, public sentiment against the big banks is clearly helping the CUs’ cause, as well.

But public sentiment is a fleeting thing. Consumers have an incredibly short span of attention. We have an amazing to forget and forgive. One teary confession and everything is back to normal (ain’t that right, Jimmy Swaggart?)

It’s time for credit unions — no, make that credit union people — to quit bashing the big banks, and to start focusing on their real enemy.

[Note: I’m not the only one who believes this. See this blog post from The Long Tail of Banking]

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