One year ago, CUNA began a digital-first marketing campaign on behalf of the credit union system.
The purpose is “overcoming industry myths and raising the profile of credit unions amidst an ever-competitive financial services marketplace. By the end of 2019, Open Your Eyes to a Credit Union® had reached tens of millions of consumers and earned more than 130 million video views.”
The program has spent approximately $50 million and now operates in 19 states. The hope is to double this effort in 2020.
Is This the Best Way to Open Eyes?
Digital marketing is the latest craze in corporate investment. Combining the technology of large databases and the analysis of artificial intelligence programs, it is now possible to target micro segments. These tactics are the financial wellsprings driving the growth of the large digital retail and social platforms. They are the dominant advertising tactics in political campaigns.
But is this multi-million-dollar marketing spend the best way to promote the credit union message?
In 2020, current trends suggest the total number of credit unions will fall below 5,000. The last time that few a number were operating was in 1935. By the following year the numbers had increased to 3,490 state charters and 1,865 FCUs reaching out to a population of 127 million.
While credit unions are larger and serving more members, the industry is harvesting seeds planted generations ago. The last time there were more new federal charters issued than those cancelled was in 1978 (348 new, 298 cancelled). Simply growing existing institutions without new entrants, will only discourage innovative ideas and the passions that startups attract.
Another Option for the Next $50 Million
Here is another option. Today the NCUA requires a minimum capital commitment of $500,000 to $2.5 million to charter a new credit union.
Why not tap into the timeless passion that people have to help their communities and to own and control their own assets by offering to provide the seed capital for 50 new charters this year?
It would be an unprecedented undertaking. Nothing like this has happened since 1986. To accomplish this goal would require an “all hands on deck” approach involving leagues, state and federal regulators, CUSOs, credit union mentors and all other parties who support the credit union system.
The project could begin with a national “call out” for groups, especially in “credit deserts” that want to start their own financial cooperative. Criteria could be established for screening applications based on some of the same requirements for chartering (founders’ experience, community/sponsor commitment). But it could also include expressions of support from leagues, local credit unions, and vendors willing to underwrite their future relationships in the critical launch years.
Why This Effort Would Really Open Eyes
- It would show the movement’s continuing support for new groups willing to embrace cooperative solutions.
- It would reverse the industry’s collapsing numbers and demonstrate the continued attraction of the credit union business model.
- It would reignite the imaginations of persons looking for ways to support their communities, especially in areas now lacking locally owned financial choices.
- It would draw upon the most potent of cooperative advantages: collaboration.
- It would fire up the entrepreneurial instincts and provide an attractive opportunity for the next generation of credit union leaders.
Instead of industry resources spent defending the status quo or seeking minimalist changes in regulations, this effort would put the powerful attraction of the cooperative model on display for all to see.
This approach would take effort and be riskier than just sending money to Facebook et al. But can you imagine the enthusiasm and cooperative spirit it could create. Fifty new charters in fifty states! Now that’s a campaign everyone could support.