How many of you remember the fight of the century? It was Haagen-Dazs v. Ben & Jerry’s in 1984. Okay, maybe not Ali vs. Liston, but in the business world it was comparable.
It was a classic David vs. Goliath tale. In 1978, two young hippies, Ben and Jerry, started an ice-cream shop in a renovated gas station in Vermont. By 1980, the popularity of their ice cream made them dream bigger and by 1984, they had grown the business to $4 million in sales. Independent ice cream distributors started selling Ben & Jerry’s in big grocery stores in Boston. And that’s how the fight started.
“That year, Haagen-Dazs, owned at the time by Pillsbury, had enough of our upstart small business,” said Ben Cohen, co-founder in a special CNN story in 2011. “Did they try to promote their ice cream harder, develop some new flavors or cut prices to competitively beat us?
No. Their game plan was to try to stop our distributors from carrying our ice cream. Pillsbury, a $4 billion corporation back then, was a major source of income for these distributors and they were told, in no uncertain terms, not to do business with Ben & Jerry’s.”
By Michael Cochrum, Vice President of Analytics and Advisory Services, CU Direct
Since the beginning of time, lenders have sought a way to accurately measure and predict risk in their loan portfolios. Understanding risk allows lenders to make sound credit decisions and properly price loans. Ideally, lenders need to make, at the very least, a high enough return on loans to cover the principle and any costs, including losses, associated with the loan. Unfortunately, the inability to properly measure, manage and predict risk appropriately has been the ruin of many lenders. Putting one’s finger on the cause and effect of the multitude of factors that can influence a borrower’s desire to originate a loan and ability to repay can be a time consuming endeavor. Most lenders, like myself, were trained to read a credit report and consider each loan request independently. We never really looked beyond that individual credit application or borrower. Considering aggregate trends in a portfolio, and even market performance, can be helpful to gaining a greater insight into future performance.
Let’s take a close look at how external factors influenced consumers’ behavior during the most recent recession cycle. One might assume that inflation and fuel costs would have had a role to play in consumer demand for new vehicles. Yet, more than any other factor, since 2010, the unemployment rate had a direct, inverse correlation to auto sales. Auto sales decreased as the unemployment rate rose, and increased as the unemployment fell. Therefore, it would be reasonable, based on recent trends, to predict auto loan growth based on unemployment forecasts.
Linda Bodie, CU CEO and Warrior
As part of “CUES on CUSO’s” month-long focus on credit union service organizations, they featured Linda Bodie, CEO and chief innovator at Element Federal Credit Union on their weekly podcast. Linda works with several CUSOs to make her small credit union act big. CUES will learn more about CUSO’s, their impact on the industry and what partnering can mean for your CU by publishing a series of articles, offering two webinars taught by our own Guy Messick and Denise Wymore and feature coverage of the Next Big Idea Competition next week at the NACUSO Network Conference.
Click here to listen to the podcast.
Read this NACUSO Spotlight article we featured on our blog earlier this year to learn more about the many CUSOs Linda’s credit union uses to compete with the big boys.
ProMedica FCU takes its card program to the forefront of its business
Over the past five years, the payments landscape has rapidly evolved and many credit unions are now taking advantage of various initiatives and solutions to remain relevant and improve their business portfolios. One credit union in particular has experienced significant growth in business after partnering with CSCU. ProMedica Federal Credit Union’s Marketing/Business Development Director, Chris Tarsha, shares the experience of being a part of CSCU’s Optimize Program. He and his team used the Portfolio Growth Solutions (PGS) product with expert guidance from their CSCU portfolio consultant.
There may be challenges but opportunities abound
ProMedica Hospital & Health Care is the largest employer in northwest Ohio and southeast Michigan with over 17,000 employees, 2,300 physicians and more than 800 healthcare providers employed by ProMedica Physicians. Additionally, it offers a health plan, which serves over 300,000 members.
With Promedica Hospital’s system extending to such a large network, there is an opportunity for ProMedica Federal Credit Union (PFCU), which aims to serve ProMedica Hospital & Health Care employees, their immediate family and affiliates.
Consumer demand for convenience is impacting the customer experience like never before. As one credit union representative put it in this short video, “technology has spoiled us completely. Everything’s about accessibility, being convenient.”
With January’s credit union trends report projecting loan growth in 2017 to exceed 10 percent, credit unions have a huge opportunity ahead of them.1 Your success this year and beyond may well depend on how convenient it is for members to do business with you.
Your Competition Gets It
Competitors realize that consumers increasingly prefer conducting business when and where it suits them, not around office hours or locations. It’s no surprise that 71 percent of financial institutions said improving the customer’s digital experience was their top priority for 2017.2
In 2016, Denver-based CUSO CU Service Network conducted a sweeping survey on top credit union issues and burdens. The findings revealed fascinating trends in the credit union landscape. Take a look at this infographic.
Also, be sure and stop by the NACUSO Network Lounge at the 2017 NACUSO Network Conference to learn more about CU Service Network.
There are numerous types of mortgage and real estate fraud prevalent in the industry today. Recognizing the Red Flags may help with detection and prevention, and at the very least, encourage further investigation to ensure the validity of the transaction.
POWER OF ATTORNEY
There are valid reasons for a party to use a power of attorney, but documents can be easily fabricated. To limit the potential for fraud, the best case scenario is for the buyers and sellers to appear in person at closing.
SIGNATURE ON DOCUMENTS VARY
Signatures on closing documents should be compared with signatures in the chain of title. A current seller has most likely signed a prior mortgage and these signatures can be compared. Forgers may misspell names or sign them differently leaving off middle initials or designations such as “Sr.” or “Jr.”
PROPERTY IS FREE AND CLEAR
A very small percentage of Americans own their property free and clear. If there was a mortgage on the property that has been paid off over a 30-year period, it would be uncommon for the owners to obligate themselves by taking out a new loan on the property. Asking the question, “Why are there no liens on the property?” and verifying the details of the transaction may uncover the possibility of a forgery in the chain of title.
Mobile economy affects business of all types. The Federal Reserve Bank reports 86% of adults in the US have cell phones today, and they are using them for all types of business. For business leaders who wonder how to speed their business forward by closing business more effectively, digital transactions are a definitive part of the answer.
Market data, combined with internal studies at eDOC, clearly demonstrate the disruptive effect of mobile technology on consumer behavior. It highlights the importance of every business leader becoming an aggressive tactician in leveraging mobile technology to perform digital transactions. Becoming experts in mobile enterprise digital transaction management is a core competency requirement of the contemporary business leader.
If you’re wondering, “Where can I tap into resources that can help me transform and win?” I’ll suggest one source, the cooperative credit union service organizations of the industry, known as CUSOs. These industry owned businesses drive down barriers of entry, and related costs through cooperative aggregation and engagement. These days it is easy to find them. All that is needed is a browser; go to ncua.gov and look for the CUSO registry. The power of the industry cooperatives is available, leverage it!