By Frank J. Diekmann
During Mitchell Stankovic’s recent “Underground Collision: CUSO Mayhem” event in Las Vegas, there were a collisions—and even more frustration but no actual mayhem---around the whole issue of vendor contracts.
Among the issues that got the audience grumbling were contract terms that included length, the inability to get out of the agreements, the heavy burden on small CUs, and more.
Contracts with core providers was a special point of irritation, with one speaker to the event lamenting the “options are limited and you only have a handful to look at.”
Meanwhile, another person urged credit unions to eliminate evergreen clauses in their contracts. “That only benefits the vendor,” the person said.
There weren’t many vendors on hand, by the way, but the event was in a Vegas so let me put down a bet that they might have another point of view. But that’s another column…
Also on the List of Aggravations
What was apparent was there were so many hands being raised during that Q&A session that followed a panel discussion that the panel could have sat quietly and just watched as the microphone was handed around the room, and the session would have timed out. It sounded a bit like group therapy as one person after the other stood up to share their own various vendor trauma.
Other issues over which various rants, venting and more were shared during the freewheeling discussion included:
- Many companies now chasing credit union business don’t know anything about credit unions. Vendors, one person said, need to “step it up” and learn about the country’s financial co-ops.
- Ultimately, observed another person, it’s important to understand the “relationship that is most important, and that is the relationship with members and staff and not the relationship with vendor partners. At the end of the day, who are you working for?”
- Don’t let the vendor create multiple expiration dates, cautioned one audience member. That creates contracts “you can never get out of.”
- Several people expressed frustrations around the costs to small credit unions of getting out of various contracts, particularly with cores, preventing them from moving to a cheaper or better option. That includes changing to a CUSO as a provider. For many CUs the fee to break the contract is back-breaking, even though for the company the fee is “a bar tab,” one participant opined. In response to that point, another person asked if it might be possible for the credit union community to create a fund to buy out contacts. (I’m going to guess it may be possible, but it’s highly unlikely.)
- The idea of a subscription model for various products and services, similar to the model increasingly offered to consumers, was mentioned by one person.
Some Additional Observations
Other random observations made during the Underground Collision meeting:
- “Software developers are making more money than CEOs. It’s a struggle.”
- “If you are waiting for board members to come to you, you’re going to get the dregs,” said one person, urging CUs to aggressively go after younger volunteers. “For younger people, it is a resume builder to be on the board of a financial institution.”
- Two observations of note were made by NCUA’s Sarah Canepa Bang that I wanted to share.
“With Silicon Valley Bank, I got a phone call from someone who said, ‘Why weren't there regulations in place to prevent this from happening?’ My first reaction was why do you need a regulation or a law to tell you not to put your hand in a fire?”
Later, Canepa Bang observed, “The measure of a good management team isn’t that they don’t make mistakes. I would argue good management does make mistakes and fails forward. The measure of good management is how quickly you recover. A failure of management is when there is somebody in your organization who says, ‘I could have told you that wasn’t going to work.’ Or, ‘I tried to tell them but they wouldn’t listen to me’.”
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of several new book, including the brand new “The Last Lyric,” a humorous satire about a murder investigation at the Rock & Roll Hall of Fame in which every line of dialogue is either a classic pop/rock song title or lyric. Available on Amazon, Apple iBook, Barnes & Noble and Smashwords. Mr. Diekmann is also author of a non-fiction compilation of the very best & worst he has seen and heard in covering more than 500 CU meetings and conferences, “501 Name Tags: How Everything You Need to Know About Business Can Be Learned at a Conference & Forgotten in the Trade Show.” It is available on Amazon, Barnes & Noble, Apple, Lulu, and Smashwords