Currency Marketing announced today that the Young & Free program is now available to credit unions across the U.S.

Interested credit unions – or in some cases, state leagues – will receive a regional license on a first-come-first-serve basis (ex: “Young & Free Wisconsin”).

Has Young & Free Alberta been successful for 52,000-member Common Wealth CU ? Here are some numbers. In eight months:

• Over 1,900 Young & Free Checking Accounts opened.
• Average account balance of $1,422 in an account that pays no interest (they were hoping for $250 per account).
• Total in market PR-value of over $200,000 (calculated from print, online, radio, and tv articles/segments, brand mentions, and impressions).

I think replicating the success of Alberta’s program will be based on three things:

• Finding the right personality to represent each region. Larissa is a jackpot of creativity and charisma, will other CUs be so lucky?
• Providing spokesters with the perfect tightrope of freedom and direction. This is a high-engagement campaign, both for consumers and involved credit unions.
• Tying in a unique product. Common Wealth’s product, a free checking account, is hugely novel in Canada because they’re one of the only FIs to offer free checking. The U.S. market will need something a little sweeter.

That said, this program has the potential to tackle the CU “national brand/awareness” issue by digging in on a grassroots level. It’ll be like dropping paratroopers of relevance throughout the U.S.

For more details, check out Tim’s announcement post from earlier today.

I apologize for the lack of love OSCU has been receiving lately. As my Twitter-friends know, I’ve been on the road and elbow deep in on-sight client work pretty much constantly for the past month.

But I miss you. I do.

Here are three things we woulda/coulda/shoulda been covering over the past couple of weeks:

1. FinovateStartup

I wish to high heaven I could have attended FinovateStartup this year. But fortunately, I was able to stay in the live-action loop thanks to fantastic coverage by the following folks:

• Brad & Mark from The Garland Group / Banktastic. Their coverage includes reviews of each and every demo and video interviews of presenters.
• Ron Shevlin’s “Notes from FinovateStartup 2008,” in which he tells it like it is.
• Jeff Stephens from Creative Brand’s insightful series of posts.
• Christophe Langlois from Visible Banking’s collection of posts and video interviews. Aside – you should add this blog to your feeds.
• Live-action commentary from the Twitter militia.
• And, of course, the belle-of-the-ball, Jim Bruene from Netbanker’s write-ups.

Congrats to Jim on another hugely successful event.

2. Joe Lieberman introduced CURIA to the Senate

Anyone who knows me knows I’m not a legally or regulatorily-inclined person. I color with crayons and markers for a living. But after doing some research I realized how significant CURIA could be for CU’s ability to impact people. To quote the Cornerstone CU blog, CURIA, which stands for the Credit Union Regulatory Improvements Act, proposes to:

• Modernize credit union capital standards to permit more efficient capital management while allowing more earnings to be returned to members in lower costs and expanded services;
• Expand the ability of credit unions to make loans to finance their members’ local small businesses; and
• Permit more credit unions to offer needed services in lower-income communities that are not adequately served by other depository institutions.

Learn more about CURIA here.

3. Account portability

When I was at the GAC, I had an awesome conversation with Robbie Wright about data portability – the idea that your data from any given online service (from your Facebook profile to your online photos to your gmail acount) belongs to you and not the service. Groups like DataPortability.org are working to make this a reality, and web services like Wesabe and Mint have applied the same concept to transactional data.

So I was excited when Colin Henderson linked to Better Banking Blog’s write-up on ‘BPAY’s top-secret MAMBO project’:

...the top-secret BPAY proposal could deliver the bank account portability that Treasurer Wayne Swan so desperately wants Australian consumers to enjoy.

Instead of a bank account number and BSB, individuals would register for their own BPAY code which could be used to facilitate payments. Consumers could then port their number from bank to bank without the need to re-establish direct debits or credits, and use it to enable online payments.

Because of your collaborative nature, I think this is more relevant to CUs than banks. The closest thing I’ve seen to this in the states, outside of general back-end consolidation work (which is great), is Filene’s ‘Once a Member Always a Member’ i³ Project. But even that is limited in scope compared to the potential of account portability.

How member-empowering, representative of your cooperative structure, and incredible for retention would this be for credit unions?

• Going green might be a fad, but what about when it’s accidental? In an attempt to increase employee retention, Navy FCU accidentally built new “green” buildings that use between 25 and 40% less energy. They also decreased turnover from 60 – 17%. Double win. (“The Accidental Environmentalists” via Kottke)
  
  
• Visible Banking’s Christophe Langlois breaks down the 4 types of social media projects.
  
  
• Five credit unions, including Digital FCU, have enabled members to scan in deposits from home. (via NetBanker)
  
  
• Wells Fargo is rolling out vSafe, a web-based storage tool for important documents. vSafe will integrate with their online banking. As someone who loses everything important every time, I love this idea. (via Finextra)
  
  
• First New York FCU’s Walt Everhardt has done a great job of keeping the financial tips and advice coming over at his credit union’s blog.
  
  
• Vancity’s ChangeEverything is up for a much-deserved Webby. Show your love by voting for them for the Webby People’s Voice Award. (via Azaroff’s Blog)
  
  
• Bank of America is partnering with MIT to build a banking innovation lab. (via The Bankwatch)
  
  
• Filed under “another way credit unions make the goodness happen,” the Wisconsin State Treasurer’s Office wants to partner with the Wisconsin CU League to set up an alternative payday lending program. (via CUNA News Now)

In Monday’s briefing with Treasury Secretary Henry Paulson on the agency’s regulatory overhaul, Dan Mica said the proposed changes (which include the demise of the NCUA) could mean the end of credit unions as they are today, according to CUNA News Now.

The article goes on to explain Mica’s analysis of the impact on credit unions (and in the end, consumers):

• All institutions desiring federal deposit insurance – whether banks, thrifts, or credit unions; including state-chartered institutions – would be required to obtain the new “federal insured depository institution” (FIDI) charter (report p. 160);
• The recommendation would combine the five federal regulatory bodies into three – the National Credit Union Administration would cease to exist;
• Cooperative institutions could operate under the FIDI charter. However, to qualify for the tax-exemption, these institutions would be required to elect “community status” and meet a series of apparently stringent tests in terms of asset size, field of membership, and service to the underserved. It appears small banks also could meet such tests and claim the tax-exemption (report p. 161);
• A Presidential Executive Order may be issued to all federal regulators expanding an existing interagency working group and directing them to more closely coordinate during the current financial crisis. After the expansion, NCUA will still not be included;
• Finally, there is insufficient information about the new federal regulatory body that would oversee all payment systems.

Is Mica right? Is this the end of credit unions?

• Download the PDF of the Blueprint for a Modernized Financial Regulatory Structure here.
• Thanks to Trey Reeme for the phone call and dialogue about this.

• Financial Planning 2.0 with Voyant – “The software has been billed as particularly useful for generating “what if” scenarios and forecasts stemming from your current financial situation” (from TechCrunch).
  
  
• To the 68% of credit unions focused on reaching small businesses: take note of Bank of America’s social network for small businesses, launched and active since October of 2007.
  
  
• Netbanker reports that 50 Banks and Credit Unions Have Facebook Pages. Good call, or noisy call?
  
  
• West Bank’s brilliant social savings account SmartyPig “allows you to invite family and friends to contribute to your account, gives you additional incentive boosts from top retailers who sell exactly what you’re saving for AND 4.30% (APY) interest on the money you’re saving.” (via Netbanker)
  
  
• This months Forbes magazine features work by Self Help Credit Union CEO Martin Eakes, aka “Subprime’s Mr. Clean.” Martin is also the founder of the Center for Responsible Lending, a resource for predatory lending opponents.
  
  
• How to make a 9-year old feel like a financial failure: As glitzy as Australian Commonwealth Bank’s ‘Dollarmite’ Kids Club is, none of that matters when they’re sending rejection letters to children. (via Servant of Chaos)
  
  
• Get your heart in the right place with the 3 forgotten emotional drivers in financial services, brought to you by Ron Shevlin.
  
  
• Credit union-partnered peer-to-peer lending network Zopa is launching in Japan.

The Aite Group LLC reported that 33 percent of credit unions with over $100 million in assets are planning to convert to mutual savings banks. Likely these converted credit unions will ultimately become for-profit, stockholder-owned financial institutions.

One-third of this class of credit union represents $193.8 billion in assets, assuming the 33 percent of converting credit unions is spread across the 1200 representative credit unions in this class evenly. In turn that represents over a quarter (27 percent to be exact) of all credit union assets. One-quarter of the money in credit unions is on its way out the door.

In 2006, fee income exceeded return on average assets (page 4 of the 2006 report, if you’re interested) credit union-wide for the first time ever as CUs looked for ways to replace money drained away by compressed interest margins. Banks are using the same tactic.

At the same time, Nobel Peace Prize winner Muhammed Yunus is considering starting a credit union in the U.S. There are movements of varying size and momentum, but movements nonetheless, to provide alternatives to banks through such things as peer-to-peer lending, democratically-run, socially responsible banks, and account aggregation and financial planning using social networks.

Isn’t the message credit unions preach differentiating themselves from banks now even more relevant – even hip?

So, then…why leave?

The Wall Street Journal published an article titled “Beyond Payday Loans” last week, written cooperatively by political cartoons Bill Clinton and Arnold Schwarzenegger.

In the article, they discuss the $8 billion problem of payday lending.

Here’s a snippet:

Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists: helping the “unbanked” enter the financial mainstream by opening checking and savings accounts, and working collaboratively with financial institutions and community groups to develop and market products that work for this untapped market. This will put money in the pockets of individuals and grow the economy. And it won’t cost taxpayers a dime.

Is it just me, or do Bill and Arnold seem to be channeling the credit union philosophy?

Two credit unions tackling the problem are Wright-Patt CU with their StretchPay loan and Prospera CU, with GoodMoney.

StretchPay is a short-term loan of either $250 or $500 available to Wright-Patt members. The loan comes with a low 18% APR, and is payable over 30 days.

GoodMoney, with branches located in Goodwill stores, offers short term loans at half the rate of the average payday lender, lower-fee check-cashing, bill payment options, wire transferring, and financial education through Goodwill’s Financial Information and Service Center.

Check out this video on GoodMoney from the 2007 Herb Wegner Awards:

Both initiatives stem out of the National Credit Union Foundation’s program REAL Solutions. Full disclosure, REAL Solutions is a client of ours – it’s how I’ve been exposed to some of the awesome things they’re doing for the movement. REAL Solutions is helping credit unions develop products to serve low-income and unbanked consumers.

When we were discussing this, Charlie asked this question:

Are CUs really helping people by making it easier and the rates lower, rather than helping people get into a better financial habit?

I think offering attractive alternatives to predatory lending is step one in the process, but it is kind of a band-aid on the greater question – How do you truly effect people’s financial behavior? Can it be done?

(Also, hat tip to Payment News for highlighting the WSJ article.)

If you’ve been itching to see how the collaboration between Zopa + credit unions in the US will play out, now’s your chance. Zopa US is up and open for anyone to create a profile and check it out.

Wondering what Zopa is all about? Click here to read Trey’s Zopa & peer-to-peer lending primer from two years ago.

It’s not the Beatles at Shea. Eventually, it could be bigger.

Zopa launched in limited release today in the US with a wider launch next week. Sure, the peer-to-peer lending site Prosper is already a player in the US market, strumming its own eBay-inspired, populace-driven power-ballads out for nearly two years. Zopa’s British Invasion brings a slightly different model to these shores.

Borrowers can apply for a five-year loan, with interest rates ranging from 8.75% to 16.99%, depending on their credit profiles. If approved, borrowers can get their funds immediately. From there, they can create profiles to explain their reasons for borrowing and can promote their profiles on the Zopa Web site, their own blog or other social-networking sites to appeal to friends, family and others willing to help them with their loans.”

Wall Street Journal, November 28, 2007

Six credit unions, including Forum Credit Union, will be matching the Zopa lenders and borrowers. In addition to P2P lending, US lenders can purchase Zopa-branded CDs to mitigate risk, an option not available to Prosper. Borrowers secure loans from this capital. It’s a familiar three chords, no?

It combines social media in a way Prosper hasn’t. It mitigates risk for lenders. It’s working through the CU movement. The Beatles borrowed from Elvis and Buddy Holly, and Zopa is innovating in its niche as well.

Of course, we’ve been listening to bootlegs and waiting for it to launch in these shores for over a year. Our fearless leader Matt provided some numbers in his September 2006 post. Netbanker.com says it could be a $9 billion market by 2017.

Keep in mind, too, that Zopa’s cost structure is significantly lower than banks and CUs, which has led Zopa to compare itself favorably with its US partners. Working with credit unions as a point of entry is a good strategic move for both Zopa, who gets regulatory assistance and the credit unions, who align themselves with a potentially industry-changing technology.

This invasion may not have the screaming teenagers or Ed Sullivan, but it is causing a small but significant uproar.

I participated in a Twitter conversation this morning sparked by this CUNA News Now story.

I was reminded of Don’t buy stuff you cannot afford.

It was brought up that “People are going to do it no matter what. Would you rather they go to a check cashing co or a CU?”

My reply was that I would rather them go to a CU than a payday lender. I just wish the CU would automatically open a Holiday Club account with every new loan to help these folks pay for next year.

I’ll give you a hint: orange.

That’s right, via CU Times, ING Direct is set to purchase ShareBuilder, a website where customers can invest any amount (with no minimums) in any of over 6,000 stocks and exchange traded funds. It allows purchase of partial-shares – really cool if you want a slice of Google stock right now.

Oh, BTW, more than 100 CUs use ShareBuilder according to the CU Times article.

Brent and I gave our “Building your relationship with Gen Y Members” presentation in Wisconsin a few weeks back.

One of the slices of feedback we got:

I was a little disappointed in the Gen Y presentation. They kept talking about social media, but saying not to do it.

That makes me feel good. Too many marketers are looking for a silver bullet, and social media isn’t it. I’ve never said, “Don’t do it.” But I have said, “Don’t do it without a strategy.” And I’ve said, “It’s not a fit for every business.”

During my co-presentation with Shari at Symposium, I showed the following slide:

My next point was:

I then called Tim McAlpine up to chat about Young & Free Alberta, which had just launched.

It’s immediately up there with Change Everything on my best FI social media campaign list. BTW, this outtake video from their CEO cracks me up:

Also gaining ground is what Diva Deb’s doing with the hoopty loan. As Charlie commented,

Talk about promoting thrift and building community. Nice work, CPCU.

So, back to the comment our WI presentation drew. I’d say that the keys to using social media successfully in your business are:

• You’ve got to have something compelling to talk about in the first place.
• It’s got to fit your culture. Thick skin is required.
• You’ve got to treat it as part of a larger marketing strategy.

Sure you can launch a blog or build a MySpace page or get that Jumbalooster account for your CU. But unless you know what you’re trying to accomplish, as Brent likes to say, all you’ll hear will be crickets chirping – or worse yet, criticism for not having it worked out in the first place.

From an email I’ll keep anonymous:

New Horizons was put into conservatory status by the NCUA last year, apparently due to its exposure to indirect loans via Centrix. The credit union in Texas won the bid to take over the credit union.

In my view, that makes the marketing campaign even more cynical in nature – I can’t imagine how the phrase “New Horizons was recently bought by a Texas-based credit union, which means the money you’ve grown at New Horizons is leaving Denver” would sit with NH members who have stuck it out the past year.

I think I am a lightweight because that strikes me as a really cruel thing to do. In another way though, I guess NH management had lost its focus and market forces are now at work.

As Tim commented both here and on Ron’s post,

This has been an interesting topic to watch how people side. As my informal poll indicates, close to 80% of my blog readers say ‘Great job Bellco.’ This is surprising to me as I believe most people looking at credit union industry blogs tend to be on the altruistic side like Trey. . . .

It is interesting to watch the credit union industry struggle with how competitive to be. On one hand, we’re all in this together, almost like a quasi-franchise network, but then on the other hand there is real secrecy and animosity towards direct competitors and a reluctancy to work together to defeat the big evil banks.

And as Tony wrote,

We have all been competing against each other for years. I guess now its out in the open.

This Techcrunch post announces Mint as the most bad-A of the TC40.

Why should you care?

Look at the screenshot on said Techcrunch post and say with a straight face that isn’t impressive.

Most FIs will be calling an emergency meeting (right after you sign up for the service, because you know you will).

FIs have long known “our customers/members won’t switch – switching costs are too high.”

Not anymore. Underwhelmed customers/members can now put a dollar amount to what you’re costing them.

As Tony puts it, “THEY will find the best deal for YOUR members. Shouldn’t YOU be doing that?”

“Switching cost” is now “switching savings.”

Sometimes I believe we work in the most uncooperative cooperative industry in existence.

This may seem unrelated to Bellco, but hear me out: While Wings went about it all wrong, Continental FCU had become complacent.

Maybe I was so upset about Wings because it seemed the most uncooperative action possible between cooperative credit unions. At the time I thought it would trigger a rash of similar attempts throughout the industry.

Hey, I’m an idealist and a “worse-case scenario” kind of guy.

That said, I voted “Great Job, Bellco” on Tim’s poll.

85% of respondents agree as I type this.

Competition = good for consumers. Right?