By Frank J. Diekmann
It’s been one big swipe right lately between banks and credit unions as they go together hand in hand on long walks on the Washington beach to lobby for passage of a reg relief bill—but should credit unions have swiped left, instead?
While the hand-holding is nice (and no doubt noticeable in D.C. given the historical animosity between the Hatfields and McCoys of financial services), maybe credit unions should be paying attention to the bankers’ other hand, because it could come back to slap them—hard.
As CUToday.info reported, credit unions and banks have both been fervently working to get S 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, to the president’s desk for a signature. It’s been frozen in the House, and a number of state CU leagues have joined with their state bankers’ associations to use their newfound warmth to melt the ice jam.
For credit unions, it’s all about the reg relief and rollback of Dodd Frank. Banks say the same thing, BUT–and this is the important part–they also have 53-billion other reasons to love the legislation.
According to one analysis, if S 2155 is passed and provisions of the Dodd-Frank Act are enacted, regional banks could be able to reward shareholders with as much as $53 billion as a result. The reason is the bill includes language that would shield large regional banks (the bill would help any bank under $250 billion in assets) from portions of Dodd-Frank that require them to sit on extra cash to weather the next financial downturn, according to an analysis by S&P Global Market Intelligence.
S&P Global predicted the freed-up $53-billion will enable those banks to pay fatter dividends and buy back shares. But I’m going to predict that not every dollar is going to flow to shareholders. Some of that capital is going to be invested in service delivery, especially expensive technology platforms such as mobile delivery and artificial intelligence. And all that is going to do is make the banks even tougher competitors. Thanks for the help, credit unions.
Now I’m the first to admit that no one would benefit from some additional artificial intelligence more than I would, but even given my limited organic intelligence it seems like credit unions are buying bullets for their market enemy.
I wouldn’t look for the bankers to use either of their hands to write a thank you note. But perhaps they’ll put on some silk gloves before they thumb credit unions in the eye.
Expletives Not Deleted
First, a warning. If you don’t care for cursing, you might want to skip to the next item. I mention this because I sat with two people during lunch at the recent CUNA Marketing & BD Council meeting who were offended by the language used earlier by one of the presenters.
The language came from Chris Leone, president, Web Strategies in Richmond, Va., who led a pretty interesting session on marketing to Millennials and the mistakes credit unions make, which you can read more about here.
I feel compelled to stress it was pretty interesting, because I know many involuntarily stopped reading as soon as you saw the word “Millennials.”
Or, as Mr. Leone said as he began his session: “I know you all saw this on the sheet and said, ‘Fucking Millennials!’”
Leone, who pointed out that Millennials are generally defined as people who are now 18-34 years old, “So, technically, a Millennial could have a Millennial kid–I’m not saying it would have been a good life decision,” was alarmed when he asked his audience of professional credit union marketers, “How many of you can tell me what your brand stands for?” and not a single hand was raised.
He reacted exactly as he should have. “Holy shit, this is a marketing conference! Can your members explain your brand? I assume no, if you can’t.”
Later he asked, “If you rip your logo off your brand, can people tell what you do?”
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday or @FrankCUToday.