Podcasts

It’s OK for credit unions to be strategically planning for growth during these uncertain times, Sarah Szilagyi says during episode 94 of the CUES Podcast.

“We as humans as maybe even … as women, we tend to think when we’re in a time of needing to help people, it’s not a time to think about growth or opportunity,” explains Szilagyi, SVP/experience and chief of staff for CUES Supplier member CO-OP Financial Services, Rancho Cucamonga, California. “Actually, that’s one of the beautiful things about credit unions. Credit unions are meant to help people, that’s why we are here. But it is also OK to say, ‘There’s opportunity right now—opportunity to help people, which would lead to growth.’”

“It is a time of change, which means a time of opportunity,” she continues. “As consumer behavior shifts and needs change, what credit unions can offer members also shifts and opens up new doors. A lot of shoppers are buying online now. A good portion … are buying online in the last 10 weeks for the very first time. That alone is an opportunity to explore, that member behavior, that shift. What cards are they using? Are they protected properly, etc.? There’s an opportunity to broaden services right now and to better serve members. They go together. It’s OK.”

Szilagyi notes that the situation credit unions and their members are in right now is “all-new territory,” and totally unique from anything that’s been experienced before. Because of this, the process of strategic planning is shifting. 

“The pace of decision-making has increased drastically,” she notes. “We’re working cross-functionally more than ever to get things done. We’re looking at our members and asking, ‘What do they need?’ and really working quickly to serve those needs. We’re trying to plan and re-plan while many of us are at home watching children.”

Szilagyi notes a Gallup poll that found credit union members were hit harder than the average American with regard to the COVID experience. “Thinking about that is a credit union priority,” both in their immediate response and in longer-term planning, she says. Credit unions need to be offering “financial wellness and products that help their members be financially well, as well as digital and contactless type of products.

“Building trust is really one of the most important things a credit union can do right now,” she adds. “Being an ally will increase loyalty long term and members definitely need a financial partner right now they can trust.” 

These days, credit unions’ planning cycles are addressing immediate issues and looking forward to 2021, Szilagyi notes. To support credit unions in this effort, CO-OP Financial Services is offering its Credit Union Strategic Investment Assessment in partnership with EY through July 2.  

The show also gets into:

• How the impact of people—both employees and members—on strategic and growth planning is bigger than ever 
• Why data is an important foundation for growth
• More about the development of CO-OP Financial Services’ Credit Union Strategic Investment Assessment
• More about what a credit union receives when it does the Credit Union Strategic Investment Assessment
• Strategies for applying in the real world the results of the Credit Union Strategic Investment Assessment

Connie Miller recalls an episode of late-night TV when the house band didn’t have a drummer. The host appealed to the audience asking, “Hey, do we have any drummers in the audience?” One man raised his hand, came up on stage, played really well and so launched his career as a professional musician.
 
“I often wonder how many other drummers were in the audience that talked themselves out of raising their hand rather than stepping into an amazing opportunity,” says Miller, president/CEO of $342 million Icon Credit Union, in the Boise, Idaho, area, and author of Don’t Sabotage Your Career: 11 Power-Filled Steps to Succeed.

In this episode, Miller says her passion is helping people grow. She wrote her book at the encouragement of friends and people in her professional network who had come to her as a 22-year veteran of credit union leadership for advice on their own careers. Miller says some of the advice she gives has to do with helping people change their bad habits.

“I have seen people grow from teller to executive,” Miller explains. “I’ve also seen many employees with expertise, smarts and education but they get passed up for a promotion or other leadership responsibilities because it would be a poor decision to move them into a leadership role” because of poor behavior traits or lack of communication skills. 

In this episode, Miller describes several unconscious habits people have that can get in the way of career growth. Here are just two of them:

They’re not fully committed to the organization’s mission. Instead, people who want to grow their careers need to live and breathe what the company stands for. “Unless it is something that is unethical, illegal or immoral,” she says, “you have an obligation to your company to both fulfill its mission and truly be in alignment with your supervisor or your board. When employees try to dig their heels in … because of their personal preferences, it doesn’t bode well in building trust with the leadership and building your career. I am talking about trying to reach the North Star, the same ‘why’ as your leadership. It really sabotages yourself when you’re not striving to be in alignment.”

They avoid difficult but needed conversations. “When you can … build your leadership mantra of creating a culture of open communication, it truly does build trust and accountable teams,” she explains in the show. “And you become very respected, however, most people avoid this. Those same people will the ones who pair off with another employee and gossip. What they don’t realize is that it really hurts their personal brand and it really breaks down trust. You will make a terrible supervisor if you don’t have the courage to talk to your employees about how they can grow.”

The show also gets into:

• Miller’s career growth in the credit union industry
• How the pandemic has shown people how resilient they can be
• The value of reflection for leaders—and prospective book authors
• Tips to help organizational leaders think of you when considering who to choose for a promotion

The Setting Every Community Up for Retirement Enhancement Act or “SECURE” Act that became law on Dec. 20, 2019, includes “many provisions to encourage employers to adopt new (retirement) plans or enhance their current plans and to provide more savings opportunities for employees,” according to Sharon Severson, CPC, consultant with CUESolutions Platinum provider CUNA Mutual Group, Madison, Wisconsin. The act is the largest package of retirement system changes in more than a decade.

Severson says she’s most excited about some of the changes to individual retirement accounts that became effective Jan. 1, 2020, and open multiple-employer plans options that will become effective Jan. 1, 2021.

“The rules governing IRAs impact most individuals at one time or another during their careers,” Severson explains. “Most of us have heard along the way about the age 70.5 or the required minimum distributions. Now those distributions must begin at age 72 instead of age 70.5 if the individual has not already turned 70.5 by 12/31/2019.” 

The upshot is that people who want to can save longer—and that’s a big benefit to people who keep working even in retirement. “This may be helpful for credit unions when assisting their members with their questions about IRAs or for credit unions that offer investment services to members,” Severson notes.

Multiple-employer plans have been around for a long time, but the act creates the opportunity to form a new kind of MEP. “The Act allows for the formation of a 401(k) plan that includes two or more unrelated employers and this plan type is now being referred to as a ‘PEP’, a pooled employer plan,” Severson says, “and hopefully this will allow smaller employers to obtain an economy of scale that can lower both employer and employee costs.”

In the show, Severson says she is glad that the Act expands retirement savings options for certain long-term part-time employees. She also thinks credit unions will also want to learn more about the Act’s changes to the minimum employer contributions for safe harbor plans.

The new Act also provides a pathway for plan participants to receive an annual disclosure of projected monthly income from their retirement savings plan. According to Severson, this disclosure has “been on the Department of Labor’s to-do list” since 2006 and will still take some time to implement. The Department of Labor needs to provide a model disclosure and a set of uniform assumptions that can be used to generate these projections “so that if you move from a plan provider to another plan provider, those projections are relatively stable.”

“Many people don’t know how much (money) they need” for retirement, she explains in the show. “They’re surprised when they get to retirement that their nest egg isn’t really what they needed after they stopped working. The illustration would help participants make adjustments in that savings plan with this information in hand.” 

The show also gets into:

• More details about the new pooled employer plans
• More details about what long-term part-time employees may now participate in retirement savings plans
• More details about the changes to the rules for employer contributions and other aspects of safe harbor 401(k) plans
• Increases in retirement plan penalties
• Suggestions for how to learn more about the SECURE Act
• More details about when the various changes take effect

When people think about marketing departments, they often think about a group of people that create ads and brochures. But, according to Amy Herbig, the marketing department is, at its core, the “key communicator” for a credit union. And that is a very central and very important role as credit unions respond to the COVID-19 pandemic.

“Everything that is going on right now is being channeled through marketing,” says Herbig, CEO of The BA Group, Northfield, Minnesota, in the show. While every role at the credit union is especially busy right now, “marketing is the catalyst for all that information to be disseminated to the member and to the community at large.”

What’s the key message marketers need to be promoting to the credit union’s stakeholders at present? “We are still a strong, solid financial institution.”

Marketers are also becoming de facto public relations reps, Herbig says, as they manage all of a credit union’s communications channels—from email to social media to the website.

Marketing is always important but it’s currently more critical than ever she says, as it takes care to ensure your information is perceived correctly and to manage any misinformation that is presented to your audience.

Most marketing plans and budgets were approved in December 2019 or January 2020. Then marketing had “two good months of really starting to get off the ground” before everything came to a halt due to the pandemic, Herbig says.

Rather than following their original plan, marketers are “having to now act more on the fly,” she explains. “A good marketer is more proactive than reactive but ready to be reactive when called upon. Currently we’re in a constant state of reactive.”

Indeed, she says that whatever was planned for the marketing focus for a particular month may have to change based on the new landscape. Herbig cites the example of a $210 million credit union that’s managing $7 million coming in from federal stimulus checks. How will that impact its upcoming audit? How will that affect its lending?

A credit union’s top marketers need to be brought into the high-level meetings that consider all of these kinds of issues so they are best positioned to get appropriate messages out to members and the community, Herbig emphasizes.

The show also gets into:

• Considerations for copyrighting during this uncertain time
• The importance of making sure the credit union is prepared to deliver on any messages put out to members or the community
• Examples of what credit unions are currently doing to reach out to members
• The current effectiveness of the CU philosophy “people helping people”

When Tim Green first heard—back in January—the news about the spread of COVID-19 overseas, he decided to lead his credit union to prepare for a scenario in which the disease would shut down the whole county where his credit union is located. 

He says he thought at the time that if the situation turned out to be less dire, his team would still benefit from the exercise. When Los Angeles County, California, did in fact close down, Tim and his team at $1.8 billion F&A Federal Credit Union in Monterey Park were more ready than most businesses.

Having antennae out to market signals and being open to responding to them is a hallmark of great leadership. And yet Green is most humble in this show. CEO for just about 13 months, he is grateful to his board for their support of this initiative. He’s grateful to other financial institutions for the ideas he “stole” from them and adapted to best suit his credit union. 

Green explains in the show that one of the first things he started working on when he joined the credit union was operational readiness—determining what was effective and what wasn’t in terms of people, systems and processes. A key thing he found was that “we were very adept at disaster recovery, but what also became pretty apparent was that our business continuity planning was not where we wanted it to be.”

In January, when the focus narrowed to preparing for the closure scenario, “we really went through it in a sequential way. We ordered a bunch of equipment. … The processes were tested. We tested in our training environment, then we moved people remotely. By the time we got to the first week in March, we were really ready to handle this and operate 90% of the core credit union functions remotely. 

“Once we had operational readiness,” he continues, “… the first thing we needed to do was think, ‘How are we doing to take care of our members?’” Among other programs, the CU offers members financially affected by COVID-19 enhanced skip-a-pay and a short-term assistance loan.

A third leg of the stool was employees. “We were able to move about 75% of our back-office staff out of the building (the CU has two branches) and about 70%” of all staff, he explains. “We gave everybody on the team below vice president a free week of PTO … and immediately the goodwill started to flow back from our employees." 

The CU closed its headquarters branch to walk-in traffic to better protect staff. The other branch has a bandit barrier between staff and members. The credit union also is paying branch workers a short-term 30% raise and catering lunch daily, so staff don’t have to leave the building to pick up food.

“Because we were ready to serve operationally, we were then able to really reach out and provide tangible benefit to our membership, simultaneously demonstrating a commitment to our employees that had carried us through thus far.”

The show also gets into:

• How Green’s risk management background informed his credit union’s response
• The thing that has worked best for F&A FCU in its pandemic response 
• How F&A FCU’s response reflected its values--what its leadership thought was the right thing to do
• What F&A FCU might do next in its pandemic response effort
• Green’s concerns about the economic recovery and helping members through that