DUBLIN, Ohio— Members of credit unions have some serious misconceptions about the industry, and some of those go straight to the heart of what credit unions are about, according to one person.
The observations come as part of a CUToday.info series on “fake news” in credit unions, which examines myths and misconceptions within and about the CU community.
“How big a secret is it that the members own the credit union?” asked Keith Hardin, founder of E Space Communications. The company also offers CUBallot.com and CUBoardMembers.com, which allow for electronic voting.
Hardin believes that many members, especially younger ones, “have no concept of the difference between credit unions and banks.”
How can credit unions make sure their members know the difference between credit unions and banks?
“Credit unions can use election marketing to reinforce the co-operative message to existing members,” he says. “Elections are a good time to give members the message: you own the credit union. It’s an opportunity for education.”
In addition, he believes state credit unions leagues should reach out to potential new members to teach them the structure of CUs through promotional campaigns.
Another Misunderstanding
Another fundamental characteristic of credit unions is also not universally known, Hardin says.
“It’s amazing how many people think the board is a paid position,” he said, again pointing to younger members as being less likely to know that credit union directors are volunteers. “It’s a hard thing to overcome, for some reason.”
Another bit of fake news Hardin sees is a member attitude he has come across more than once.
“Members think it won’t make a difference if they vote,” he said.
But some credit union elections with thousands of ballots cast have been decided by one or two votes, he said.
Indeed, one election using E Space Communications’ CUBallot solution was a tie, and was finally decided by a coin toss, according to Hardin.
The Remedy Not So Certain
How to remedy that? “I’m not too sure about that one,” he acknoweldged. One thing to do might be to widely publish election counts to members so they can see how close they are sometimes.
But that would be up to each individual credit union to decide, he believes. If someone lost by a landslide, for instance, the institution might not want to embarrass that candidate by publishing the results.
Hardin sees a couple of more misconceptions credit union members have on the technology side. For one, “The theory that an app is better than a website.” Many members subscribe to the cliché, “There’s an app for that.”
“An app is excellent if there’s no connection to the internet available,” he feels.
Otherwise there is no advantage of using an app versus using a website except that the graphics might be better.
Another is members’ worries that credit union security is often compromised by hackers.
“It’s a misperception that it is a technology failure, that tech is not secure. Ninety-nine percent of hacks come from human error,’’ he said.
What Leads to Errors
The human error happens in two ways. Either it comes from members not updating the security on their end of the connection, or from giving away information to phishers.
“It’s not the technology that’s breaking down; it’s the human factor,” he believes.
How to correct this bit of credit union fake news? “The news media. Their reporting needs to be a little more precise,” he said.
Hardin’s firm has a program for credit union boards, called CUBoardMembers. He does not see directors as subscribing to this kind of fake news by and large, though.
“They do a pretty good job of staying informed on technology,” he said. “They ask if they are uncertain. They know what they don’t know.”
—Mark Fogarty