Will Differentiation Save CUs?

The Filene Research Institute just issued a Research Brief, "What People Pay: Deposit Account Fees at Banks and Credit Unions." [http://filene.org/publications/detail/whatpeoplepay] This was my comment:

The brief is encouraging and surprising. Given that most consumers know little of and care little for the difference between credit unions and banks, pricing often becomes the consumer's primary decision tool. Forget for a moment that my former credit union's free share draft account was not enough to convince many eligible consumers to switch from a regional bank their parents had done business with forever. A dose of reality hit me when another regional bank, Barnett, mocked by CU employees for its long list of fees, was able for a time to beat many local CUs on car loan and CD rates. It became apparent that their fee income enabled them to beat us on core business. (Barnett became Nations, then Bank of America.)

The challenge for today's credit union leaders is to develop strategies to remain competitive on pricing while establishing the kind of differentiation that resonates with and captures the hearts and wallets of qualifying consumers. Simultaneously, CUs need to continue the tax exemption to ensure a small amount of price difference. A single regulator will further erode if not obliterate CU and bank differences. There may be a chance to shine under the proposed national consumer protection agency.

U.S. consumers' lives will be adversely affected by a lack of credit unions. Becoming indistinguishable from banks or going out of business entirely will be the same for consumers. Filene followers and other leaders need to see beyond the economics and issues of 2009 and 2010 to ensure that future generations will know and appreciate the credit union difference. The continued presence of a viable credit union choice is necessary to keep down and reasonable the costs of consumer and small business banking, and to assure the presence of a nonprofit commitment.

Don’t Obfuscate Policies

I read a call to develop a cell phone policy: if a company provides cell phones, there's personal use to consider, and there's potential liability if the employee has an auto accident attributable to being on the cell phone at the time.

I read recently that companies ought to have a social media policy. Management concerns range from worker efficiency to "tweeting" something that will embarrass the company, or expose its new strategy.

To avoid company policies becoming a patchwork of individual provisions to meet the latest specific concerns, take the time to see if existing policies may cover the issues.

For example, here are a few statements you could already have in your code of ethics:

• To do one's job to the best one's ability, efficiently and effectively, such that one contributes to the moral and financial success of this company.
  
• To promote and protect the best interests and reputations of this company and the industry and avoid and resist influences and practices detrimental to it.
  
• To display the highest standards of personal conduct at all times.
  
• To uphold and comply with the laws, rules, regulations pertaining to our operations.
  

(Those are excerpts from my Board Governance Policies model manual for boards of credit unions, adaptable to nonprofits.) You can see that many of the concerns over the use of company cell phones are covered in the code. Your Personnel or H.R. Policies are also likely to address acceptable and unacceptable behaviors.

A company providing cell phones may also provide long distance lines accessible from every desk, company cars, cameras and other company equipment that can be used personally. A company will already have addressed personal use of company property including tax implications.

If you find that in this case, cell phones are adequately covered, rather than write a new policy, leadership can choose another means to ensure that employees know how their use and not use their company-provided cell phones. When legal risks are significant, have the employees sign the interpretation sheet evidencing their understanding.

A signed interpretation could be a single sheet. On the other hand, a full-blown policy addressing cell phones might be several pages and contain many of the same provisions as for the other things previously mentioned; the only difference being the name of the object.

That duplication presents a couple of problems. A greater number of pages increase the chance for non-compliance when employees fail to read or remember policies. Repeated policies need to be worded the same to remove the potential for different interpretations.

When policies are the same for cell phones and other stuff, it's better to have overriding policies addressing the concerns, and include a list of example objects that are covered by it.

Whether you add a whole new policy or take my approach, have your attorney review policies periodically to be sure of your legal footing.