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									Credit
Union         BUSINESS
                   T H E
Special Facilities Section
                             S E CURITY
                                 JUNE 2008
                                             ISSUE
                                                     VOLUME 3 | ISSUE 6 | $9.95




Natural Disasters
How to be Prepared
Ways for CUs
to Fight Phishing
5 Security Tips
Safeguard Members
and Your Reputation
Gary Oakland
Pilots BECU to
New Heights
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    SEE & HEAR
what some of today’s top CEOs
 have to say about technology.

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    >> CONTENTS

        Credit
        Union
    JUNE 008
                                 BUSINESS                                V O L U M E 3, I S S U E 6


              F E AT U R E S                   58   Burned by the Fire Inspector!
                                                    How to Protect CU Assets
    14        Natural Disasters                     By	Elaine	Boyd
              How to be Prepared
              By	Jeff	Van	Pelt                 6   Checking in on
                                                    Remote Capture
            Ways for CUs to Fight Phishing        By	W.	B.	King
              By	Phil	Hall

    5        5 Security Tips                  7   Tools of the Trade
              Safeguard Members                     Key Indicators for CFOs
              and Your Reputation                   By	Gary	R.	Crum
              By	Ursula	Furi-Perry,	Esq.
                                               81   Got Your Ears On?
    31        Gary Oakland Pilots BECU to           4 Signals for CEOs
              New Heights                           By	Dee	Burks
              By	LaRita	Heet
                                               84   Community Focus
              M O N T H LY C O L U M N S
                                                    CPCU Gets It Right!
                                                    By	Sharon	Sweda

         4     Publisher’s POV                      ARTICLES
    	         By	Tim	O’Hara

        8     At C Level                       44   C O V E R S T O RY
              The Disaster                          Facilities: Designing for Success
              By	Marc	A.	Bringman              	    By	Julie	Sturgeon	

    37        WWW = New Members                68   Seminar Gold
              CUs Recruit Online                    Mining Biz Members
              By	Nancy	Mann	Jackson            	    By	Lin	Grensing-Pophal	

    40        Gold in Alaska!                  77   How to Afford Security
              Correspondent Lending                 7 Practical Ideas
              By	Joanne	S.	Liu                      By	Selena	Chavis

    54        Got Energy?
              Advice for Execs
              By	Catherine	Collins


       Credit Union BUSINESS June 2008                                             www.CUBizMag.com
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    >> FROM TIM




        Publisher’s POV  By Tim O’Hara

    You Are the Credit Union Leaders!
    If you have been receiving “Credit Union BUSINESS” maga-
    zine in the mail during the past two years and you make your
    living by working in a credit union, chances are you are a top
    leader in the CU industry. Whether you are a CEO, COO, CFO,
    CIO, or a department head, you are in very good company,
    and WE are very proud to have you as a reader.

    Since Vol. 1, Issue #1 was printed in July 2006, we’ve been
    hard at work providing you with the best “business-centric”
    monthly magazine that money can buy. Our staff works round
    the clock assigning topics to more than 50 different writers
    – all expert in their field. We also bring you candid interviews
    with top CU leaders, and in every column, we solicit the best
    advice from thought leaders around the country.

    In the last 8 issues, we have introduced six new monthly arti-
    cles focused on those subjects you think are most important.
    In October, look for our latest addition when we introduce Where do you need the most help? Our goal is and always will
    “The Lending Line” – a column examining all products, ser- be to develop a well-rounded editorial menu that best serves
    vices, and best practices in lending. But, we are not done!    our readers and provides them with targeted BUSINESS infor-
                                                                   mation, and we will continue to do that – with your help.
    Now It’s Your Turn...
                                                                  Marc Bringman, Editor-In-Chief can be reached directly at
    We are about to build our editorial calendar for 2009, and we marc@cubizmag.com, and I can be reached at tim@cubi-
    need your help. You are on the front line. You feel the pres- zmag.com. We both hope to hear from you soon, and I can
    sures of facing the member and the competition every day.     assure you we will listen.

    Since “Credit Union BUSINESS” is your magazine, we want Thanks for reading!
    to know what you think. What should we add (or remove)?




4    Credit Union BUSINESS June 2008                                                                        www.CUBizMag.com
    >> ABOUT US


                Credit
                Union                 BUSINESS
                 Publishing Team                                                Credit
                                                                                              BUSINESS


                                                        J U N E 2008
                    Tim O’Hara, Publisher                                       Union
                       tim@cubizmag.com                                                            THE       SECURITY       ISSUE
                                                                                Special Facilities Section      JUNE 2008           VOLUME 3 | ISSUE 6 | $9.95

                   Marc A. Bringman, Editor
                     marc@cubizmag.com                                          Natural Disasters
                                                                                How to be Prepared
               Iliana Nord, Operations Manager
                     iliana@cubizmag.com                                        Ways for CUs
                                                                                to Fight Phishing




                                                        CREDIT UNION BUSINESS
                   Patti Manzone, Designer
                                                                                5 Security Tips
                  Kathy Kehrli, Copy Editor                                     Safeguard Members
                                                                                and Your Reputation

                    Staff Writers                       SECURITY
                                                                                Gary Oakland
                                                                                Pilots BECU to
                         Elaine Boyd                                            New Heights
                      Recruiter’s	Corner
                                                        VOLUME 3 ISSUE 6




                      Catherine Collins
                         HR	RoundUP
                        Gary R. Crum
                         CFO	Currency
                    Lin Grensing-Pophal                                             Sales and Advertising
                   Business	Member	Update                  Charlie Perry, SVP & Associate Publisher
                          LaRita Heet                     charlie@cubizmag.com | 561-282-6015 #2
                         CUB	CloseUP               Michael D. Stack, Midwest and Eastern Advertising Manager
                    Nancy Mann Jackson                     michaeldstack@aol.com | 847-922-1799
                    Member	Growth	Report                     Bill Winney, Western Sales Manager
                           W. B. King                         win32@ez2.net | 561-282-6015 #4
                            TechBiz
                        Joanne S. Liu                                                          Subscriptions
                       Mortgage	Matters
                        Sharon Sweda             Credit Union BUSINESS is published monthly (12 issues per year)
                          CU	SpotLite!           by CU Business Magazine, Inc. A one year subscription costs $105.
                                                 An online subscription form is available at www.cubizmag.com.

                    Contributors
                         Dee Burks                                                    Contact Information
                       Selena Chavis             Credit Union BUSINESS Magazine
                     Ursula Furi-Perry           P.O. Box 2223
                          Phil Hall              Palm Beach, FL 33480
                      Julie Sturgeon             (561) 282-6015
                        Jeff Van Pelt            (561) 588-7711 (fax)
                                                 www.cubizmag.com | editor@cubizmag.com                                                      MEMBER




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    >> AT C LEVEL




                           The Disaster
       When an earthquake leaves a team leader helpless at home, he decides the best place he
       can be of help is at work. When he arrives, however, he’s faced with a critical decision:
          follow his superior’s orders or check in on the well-being of his team members.
           In the process, he’ll learn not only the value of people over profit but also just
                       how important a corporate value system is in the wake of disaster.
                                                     By Marc A. Bringman




    I
             remember it well – October 17, 1989, just after 5 p.m.   a bad one,” I told myself. Now what? I tried to call my wife
             I had the day off and had taken up residence on my       but got no dial tone. I wasn’t sure what to do. For some odd
             favorite couch looking forward to the World Series.      reason, I felt a need to clean up. I picked up an oil painting.
             Then, as if expecting something to happen,
             my eyes opened wide. The cat, resting on my
    stomach, dug in and launched herself off my chest and
    out of the room, leaving me punctured and scratched.
    Reacting to the pain with instant anger, I shot my legs
    and arms straight up and rolled into a sitting position.
    That’s when I heard the rumble. Instinctively, I jumped
    to my feet only to find the floor moving. I stumbled
    across the coffee table and fell to one knee. Surprise
    so dominated me that for the first few seconds, I was
    devoid of rational thought. It was an earthquake.
          Big earthquakes create an unmistakable but inde-
    scribable sound. Up close, a 7.0 roars heavy, ugly and
    destructive. I tried and failed to grab the floor. Then re-
    alizing my helplessness, I prepared to survive. I waited
    and watched. A bookcase tumbled to the floor. My TV
    walked out of the entertainment center, and two of my
    oils bounced once, twice, then crashed to the floor.
    For the next 15 seconds, I watched my chattels bounce
    around the room like bubbles in a boiling pot.
          Then it stopped. The noise disappeared, but the
    dog continued to bark. I stood up, wavering. “That was


8     Credit Union BUSINESS June 2008                                                                             www.CUBizMag.com
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                                One formula for success




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 >> AT C LEVEL




 Outside of a little damage to the plaster, the old painting had   ing literally rolled around on giant rollers and shock absorb-
 survived the fall.                                                ers. Arrogantly, I expected to see little damage. In fact, by the
      The more I looked around, the more I realized this was       time I arrived at work, I had convinced myself that it would
 a unique event. I began to understand: This was bigger than       be a short visit, but the next 30 hours were remarkable.
 me. My thoughts turned from my mess to people and things                In a hurried walk, I approached the front door. Nor-
 outside my house. Again, I thought about my wife. I tried to      mally, I would swipe my card across a sensor and the door
 call – still no dial tone. Then I thought about work and the      would open. This time, however, a guard met me at the door.
 more than 200 people on my team.                                  “Doors don’t work,” he said.
      With no TV, I turned on the radio, and there I discovered          “Really?” I questioned.
 the enormity of the devastation. A section of the Bay Bridge            “Yep, it’s a mess in there,” he warned.
 had fallen. The Cypress Street Viaduct (Interstate 880) fell             Again surprised, I responded, “Really?”
 – crushing cars and trapping and killing people in the pro-             “Yes sir, it was quite a roller.”
 cess. I wanted to help. Still trying to absorb the situation, I         I thanked the man and entered. He was right.
 concluded that the best place I could do that was at work.              Many ceiling tiles had fallen and florescent lights dan-
 There we had all sorts of useful resources.                       gled precariously on electric wires. Glass littered much of the
      I grabbed my ID and ran to my car. On the way, I no-         carpet. Although the cabinets were secured to the walls, the
 ticed the cracked stucco on the side of my house.	It	could	be	    books spilled across the desks and floors. Now I understood
 worse, I thought as I jumped in the car and hit the road. Since   why it made sense to lock the overhead cabinets. Despite
 it was rush hour, I expected trouble. Strangely, the roads in     all the damage, the lights were on and people were moving
 my area were clear. I drove the nine miles in less than 15        around, seemingly with purpose.
 minutes.                                                                I headed up to the war room – a central communica-
      On the way, I recalled that the new administration build-    tions hub where we managed several of our major projects.
 ing was “quake resistant.” During an earthquake, the build-       If any managers were here, this is where I would find them.


10   Credit Union BUSINESS June 2008                                                                            www.CUBizMag.com
               The Bolt-On Approach?




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 >> AT C LEVEL

                                                                                             Like any good soldier, I immediately re-
                                                                                          plied with a positive response. “I’ll get on it
                                                                                          as soon as I finish my recall roster.”
                                                                                             At that, the GM turned back to me and
                                                                                          said, “No time for that.”
                                                                                             “But sir, I have more than two hundred
                                                                                          people in my shop, and I just don’t know
                                                                                          where they are.”
                                                                                             “And I’ve got three thousand people
                                                                                          and a half a billion dollars at risk, right
                                                                                          now, because some clown is blocking the
                                                                                          entrance to that facility. I’ve also got an
                                                                                          untold amount of customers out of ser-
                                                                                          vice. My priorities are clear. Now, if you
                                                                                          please, do what I tell you.” He dropped his
      It didn’t take me long to make the trek, and I was right.     arms to his side. The clipboard in his right hand rested next
 The place was abuzz with activity, and in the middle of it all,    to his knee and dangled there as an obvious reminder of how
 the GM stood looking at monitors and issuing orders. He            much work had just come to a halt. He glared at me.
 noticed me right away. “Jeff!” he called and waved at me.                I realized I had a decision. We were in the midst of a ma-
 Then he immediately turned to his adjutant and said in a clear     jor disaster that might or might not have been over. We had
 voice while pointing in my direction, “See that? The players       systems, services and a tremendous amount of money at risk.
                                                                    For me, I had to account for a couple hundred people. I de-
                                                                    cided to try again. “If I can just get the phones working....”
      In a disaster, reach for                                            He cut me off. “They do work. You have to wait for the
                                                                    dial tone. It’s just slow.”
        your value system.                                                “Great,” I said, “then it shouldn’t take very long at all.”
                                                                    The instant expression on the GM’s face spoke volumes. Ob-
                                                                    viously, I was about to make what we call “a CLM,” a career
 always show to the game.” Hearing this, I decided it was a         limiting move.
 good move to have come to work.                                          “No, you’re going to San Jose. That’s where I need you.”
      After barking out two additional orders, the GM turned        His furrowed brow shaded unwavering eyes.
 to me and said, “Jeff, I need you in San Jose, right now. They           “Mr. Hicks, I don’t know where my people are, and I’m
 tell me half the mainframes fell through the raised floor. I       worried sick about them. Some of these people could be in
 need that shop up and running ASAP, and I need the account-        trouble, and we may be the only people thinking about them.”
 ing data moved to the alternate site in Vacaville. You’re also     At this point in the conversation, I had already decided what
 going to have to deal with OSHA, something about asbestos in       I was going to do. My only worry was whether Hicks would
 the air and on the floor, but don’t listen to them. Get right in   have me walked out of the building before I had a chance to
 there and get those tapes.” Convinced that he had made his         do it.
 point, he abruptly turned and looked for his next task.                  Hicks finally blinked his eyes and said, “Maybe your
                                                                    boss will do what I tell her. All right, son, you go do whatever


1   Credit Union BUSINESS June 2008                                                                                www.CUBizMag.com
   RDB-046_AcctMgmtAd-ForPrint2:Layout 1                            4/7/08     9:44 AM      Page 1
                                                                                                                                  >> AT C LEVEL



 If they gave awards for
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 you need to do. I have little time for persuasion.” With that,                                People are most unpredictable and become even less
 he turned away from me. In doing so, he blocked the light                                predictable in a disaster. What was once a tolerant intelligent
 from a ceiling spot. It grew noticeably dark. I wondered if my                           business executive may now become a person who is func-
 10-year career was another victim of this disaster. Silently, I                          tioning under great stress. Best advice: In a disaster, reach
 turned and left. I had a recall to perform.                                              for your value system. It will get you and your team through




 D
                                                                                          the most difficult of circumstances.
                  isasters arrive amidst a swarm of expand-                                    Your values, the values of your people, and your com-
                  ing problems. They descend on the situation                             pany values are not developed overnight. They take time to
                  like a fog and dampen even the best leaders’                            mature and gel. If you don’t have a thorough understanding
                  minds. They pit unfamiliar circumstances                                of these value systems and how they interact in your organiza-
                  against traditional business needs, and per-                            tion, you better hurry because when the lights go out, you’ll
 haps worst of all, disasters play on fear.                                               need more than a flashlight to guide you through the confu-
       Disaster planning is an essential element of business                              sion and fear of a major disaster.
 planning. FEMA has a useful guide, “Emergency Management
 Guide for Business & Industry” (www.fema.gov/business/                                   Marc	A.	Bringman	is	the	editor	of	“Credit	Union	BUSINESS”	
 guide/index.shtm). However, C Level managers already know                                and	the	author	of	“Swapping	Lies:	Deception	in	the	Work-
 all of this. The message herein is about people.                                         place.”	He	can	be	reached	at	marc@CUBizMag.com.




www.CUBizMag.com                                                                                                     June 2008   Credit Union BUSINESS         13
 >> FEATURE | DISASTER RESPONSE




            Natural Disasters
           How to be Prepared
            Is your credit union prepared for the worst? Comprehensive disaster management
                 planning is critical, even if you think you are not in a disaster-prone area.
               Take note of these most important steps in planning for disaster so that if and
                             when one strikes, your credit union will be ready.
                                                 By Jeff Van Pelt, Ed.D., SPHR




     A
                    t Magnolia Federal Credit Union in Jackson,              She was then able to retrieve the most recent member
                    Miss., they know the importance of disaster pre-   trial-balance report. She printed a copy for each of the FCU’s
                    paredness. When Hurricane Katrina struck the       two branches, and they were open for business the next day,
                    Gulf Coast in August 2005, the FCU lost power      albeit still without power. Members waited patiently outside
                    for four days. Telephones were down for two        while they were escorted in, two or three at a time, by flash-
     days. Many residents sustained damage to their homes and          light to retrieve funds from their accounts. Credit union staff
     were without water for a time. There was a gasoline shortage.     members were then able to verify and track withdrawals
     Credit cards and debit cards were useless without power,          through valid member account numbers. This process con-
     so the few stores in town that were open were operating on        tinued for two days, until power was restored.
     a cash-only basis. This meant that Magnolia FCU members                 Open Solu-
     needed to get to their money.                                     tions is a hosted
           The $77-million Magnolia FCU was back up and run-           solution that pro-
     ning within 48 hours. The day after the hurricane, Magno-         vides backup for
     lia’s management team showed up for work in the dark. With        all data. If Mag-
     flashlights, they surveyed the damage and discussed how to        nolia’s data had
     serve their 10,000-plus members.                                  only been stored
           They learned that one of the managers, VP of finance        on a mainframe
     Gigi Williams, had power at her house. So they took down          onsite, the credit
     their Open Solutions COWWW server, which housed all their         union would not
     member data, and sent it home with Williams. With guidance        have been able to
     from Open Solutions’ support personnel via cell phone, Wil-       open for several
     liams managed to start up the server by changing a few set-       more days.
     tings.                                                                                VP	of	Finance	Gigi	Williams,	Magnolia	FCU


14      Credit Union BUSINESS June 2008                                                                             www.CUBizMag.com
                                                                   >> FEATURE | DISASTER RESPONSE




 Magnolia	Federal	Credit	Union		


       As challenging as Katrina was for Magnolia FCU, it could    form a team expressly for that purpose. This team will both
 have been worse. The building could have been destroyed.          do the planning for a possible disaster and manage the re-
 Employees could have been prevented from getting to work,         sponse should one occur.
 either by downed trees and electric wires or because they              Planning begins with deciding who should be on the
 were attending to their own personal losses. All of this points   team. Input and assistance are going to be needed from a
 to the importance of comprehensive disaster management            number of individuals. Choose people with a variety of skill
 planning.                                                         sets that will be useful during a disaster: calm demeanor,
       Even if you think you are not in a disaster-prone area,     good communicator, knowledgeable about the CU’s physical
 many things could happen. An underground gas-line rupture         plant, its business processes, its databases and so forth.
 could lead to the area being sealed off, so that no one could          Similarly, choose people whose duties comprise the ar-
 come or go from the building. Lightning could strike any-         eas and functions you would need if there were a disaster
 where, with potentially devastating consequences, including       (e.g., someone from senior management – in a small organi-
 the destruction of computer hardware and software, or avian       zation, that individual will probably be the president, some-
 flu. The list could go on.                                        one who has access to employee and member data, someone
       Following is an outline of the most important steps in      who knows the core processing system inside out and so on).
 disaster management planning for businesses.                      Finally, the team needs a leader. Often this person will be the
                                                                   president. If not, it should be someone who reports to the
 Who’s In Charge?                                                  president.
 The first step in creating a disaster management plan is to

www.CUBizMag.com                                                                         June 2008    Credit Union BUSINESS      15
 >> FEATURE | DISASTER RESPONSE


     Major Risks?                                                      responding to the humanitarian needs of their members and
     The first task for the team is to perform a vulnerability analy- the larger community in the event of a large-scale disaster.
     sis, which has two parts: the likelihood of various disasters
     and the impact that each would have.                                        BUsIness ContInUItY PLAnnIng
           First, it is important to assess the likelihood of occur- Carefully assess how your CU functions and determine which
     rence of various natural and manmade disasters. For exam- staff, materials, processes and equipment are essential to
     ple, for CUs along the Gulf Coast or southern Atlantic Coast, business continuity; that is, to meeting your members’ finan-
     hurricanes will figure prominently in their planning but cial needs. Then, with the results of the vulnerability analysis
     earthquakes much less so. Just the converse will be true for in hand, determine which of those essential staff, materials,
     CUs in the Pacific states.                                        processes, and equipment would be at risk in the event of
           Similarly, it is necessary to assess the likelihood of fire each kind of disaster you assessed as somewhat likely and
     (based on things like age of building, sprinkler system, etc.), having significant impact. Document in what ways each would
     tornadoes (based on geography), terrorism (based on prox- be at risk.
     imity to high-value targets) and so forth. Note that even a one-
                                                                       You will need to create: (1) safeguards for each of these as-
     percent probability of occurrence might be significant in this
                                                                       sets and processes, where possible and (2) backup plans
     context.
                                                                       where safeguards are not possible or foolproof. Where can
                                                                       you quickly get more staff or equipment, use of a different
          “They surveyed the                                           facility, access to backup data from your core-processing sys-
                                                                       tem, alternate contractors and suppliers, and so on?
        damage and discussed                                             Create a contact list, including emergency numbers for all

           how to serve their                                            employees, critical business contractors, building manage-
                                                                         ment contacts and local emergency services. Get a copy to
        10,000-plus members.”                                            everyone on the disaster planning team, and keep copies both
                                                                         on- and offsite.

     A vulnerability assessment is not complete without an impact        Arrange programmable call-forwarding for your main busi-
     analysis for the various disasters that you determine have sig-     ness line(s) so that if you can’t get to the office, you can call
     nificant likelihood. This is because a disaster warrants signifi-   in and program the phones to ring elsewhere.
     cant preparations only if it is both likely to occur and it would   Define individual responsibilities in the event of a disaster.
     have a major impact. As an example, hailstorms may be likely        Who is responsible for securing the core-processing system,
     but their impact on most businesses is fairly small; therefore,     for example? Who will contact employees? Make sure those
     planning could be better directed to other potential disas-         individuals know their roles and receive any advance train-
     ters.                                                               ing needed to carry them out flawlessly under trying circum-
                                                                         stances.
     And ... Preparing for Disaster
     The next step is to create a disaster plan and get it down          Cross-train employees to step into key roles that could be-
     on paper. There are at least two parts to this plan: one for        come vacant. Have contingencies for replacing everyone up
     business continuity and one for responding to the needs of          to and including senior leaders who are out of action. An
     employees. Some credit unions might wish to add plans for           avian flu pandemic, for example, would most likely affect all

16      Credit Union BUSINESS June 2008                                                                               www.CUBizMag.com
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trademarks of their respective holders.
 >> FEATURE | DISASTER RESPONSE


                                                                                        reassured that the organization is
                                                                                        responding appropriately to the di-
                                                                                        saster. However, the disaster may
                                                                                        render some means of communi-
                                                                                        cation useless. Consider how often
                                                                                        power and phones are out after a
                                                                                        storm. The solution is to have redun-
                                                                                        dant methods of communicating with
                                                                                        your employees, so that if one fails
                                                                                        you have several backups.

                                                                                        All of the following methods should
 levels of the organization. Consequently, you need to decide be considered, and the logistics of the ones that you decide to
 in advance on your succession processes, even down to spe- use should be documented in your plan:
 cific individuals who could move into each position.
                                                                   • Onsite, face-to-face meetings
 Plan what you will do if your building is not accessible. Can     • A toll-free number, with live answer, for employees
 you continue operations from another branch? Where could            to call in with their questions and concerns
 you rent another building on a temporary basis?                   • A toll-free number for employees to call in and get
                                                                     recorded information
 For some emergencies, you may need to decide whether to           • A password-protected page on your intranet or
 evacuate the building or shelter in place. A chemical spill,        extranet where you can post and update information
 for example, could result in authorities closing off an entire    • A telephone call-tree to reach a large number of
 neighborhood and ordering everyone to remain indoors                employees quickly
 where they are. In case of such an event, consider what es-       • An email distribution list for all employees, and for
 sentials need to be kept on premises. Requisite items should        relevant subgroups of employees
 include a first-aid kit, flashlights with extra batteries, tools, • At a minimum, designate a phone number on which
 and enough drinking water and non-perishable food for a full        you can record an announcement remotely for
 house for several days.                                             employees to call and listen to.

                                                             One important role of an employer after a disaster is in-
 (See	below	“Resources	for	Managers	for	Business	Conti- forming employees about where they can obtain resources
 nuity	Planning.”)	                                          for assistance. Needs that should be addressed include the
                                                             immediate safety and security of person and home; physical
 Planning for employee needs                                 needs such as water, food and shelter; and emotional needs,
 No business can operate without its employees. This fact
                                                             especially for those grieving a loss. In addition to any com-
 makes planning for employee needs in the wake of a disaster
                                                             pany-provided assistance and local community resources,
 an important function of your disaster management team.
                                                             see the box for government and other national organizations
 Communication is the key to meeting employee needs. Timely
                                                             of interest.
 communication with employees is essential to their feeling



18   Credit Union BUSINESS June 2008                                                                       www.CUBizMag.com
                                                                   >> FEATURE | DISASTER RESPONSE

 (See	below	“Resources	for	Employee	Needs	After	a	
 Disaster.”)	
                                                                          “People gain a sense
 Disaster-Related Policies
 It is important to decide in advance and to have in place clear
                                                                           of security through
 policies on various issues that may arise during a disaster.
 These issues include but are not limited to:
                                                                               information.”
     • Attendance: Who decides whether employees need              about resources, as above, that are available to help them
     to report for work? Will absent employees be re-              cope with their own and their families’ needs.
     quired to take vacation? Do these policies apply dif-         This message does not need to go into specifics such as work
     ferently when there is difficulty or danger involved
                                                                   schedules and leave policies. The latter might be better ad-
     in reporting, when the branch is shut down or when
                                                                   dressed in separate, later communications, perhaps by a VP
     employees have personal problems preventing them
                                                                   or HR manager.
     from reporting (for example, damage to their homes)?
     • Pay when out of work: Will employees be paid for            Response to the Larger Community
     missed work? How much? For how long? Does the policy          In addition to taking care of their own needs after a major
     apply differently depending on reason for missing work?       disaster, many companies want to do what they reasonably
     • How will pay be gotten to employees if they                 can to help the larger community recover. In addition to be-
     are dislocated from their homes, cannot come                  ing the right thing to do, giving to the community during such
     in and/or the banking system is disrupted?                    a time comes back to your organization in terms of the good-
                                                                   will it engenders.
 Brainstorm among your team about other policies and pro-                Your disaster management team might wish to call local
 cedures that need to be worked out in advance. Try to make        community-aid organizations to find out what help they need
 such policies as generous as circumstances allow – that gen-      and to offer assistance. Your aid might be financial, mate-
 erosity will be remembered by employees and rewarded with         rial or volunteer time by your employees. Employees might
 loyalty.                                                          donate blood, if that is in short supply. The CU could offer to
                                                                   match employees’ monetary contributions. It could publicly
 What to Communicate                                               recognize employees who donate their time. It could even of-
 One of the first steps after a disaster strikes should be a mes-  fer employees paid time off for volunteer work.
 sage from the president of the CU to all employees. The mes-            Clearly, one size does not fit all when it comes to disaster
 sage should convey the gravity of the situation and reflect the   management planning. The size of your organization deter-
 normal anxieties and concerns that are shared by all.             mines, to some degree, how extensive your planning needs to
      People gain a sense of security through information;         be. But it is better to do too much than too little in preparing
 therefore, the message should include an update on the status     for events that could paralyze your CU in the short term and
 of the disaster and any steps the CU is taking to ensure both
                                                                   hurt business in the long term if not handled well.
 the safety of its employees and the continuity of its business.
      It should also remind employees where and how they Resources: Disaster & Continuity Planning
 can get updated or additional information from the CU’s man- Following are links to Websites of government agencies and
 agement team. Finally, the message should inform employees other organizations that provide information and advice to busi-



www.CUBizMag.com                                                                           June 2008    Credit Union BUSINESS       19
 >> FEATURE | DISASTER RESPONSE

 nesses for disaster management planning and response.            American Red Cross: (866) 438-4636.
 http://www.ready.gov/business/index.html – a compre-             Website: www.redcross.org
 hensive disaster planning Website provided by the U.S. Depart-   Catholic Charities: (800) 919-9338.
 ment of Homeland Security for small to mid-sized businesses.     Website: www.catholiccharitiesusa.org
      http://www.redcross.org/services/disaster/0,                Federal Emergency Management Agency (FEMA):
      1082,0_606_,00.html – a disaster preparation site           (800) 621-3362. Website: www.fema.gov
      from the American Red Cross.                                Legal information from the American Bar Associa-
      http://www.vaemergency.com/business/–a disas-               tion: www.abanet.org/legalservices/probono/home.html
      ter management planning site provided by the Virginia
      Department of Emergency Management.                         Salvation Army: Survivors in need of assistance call (888)
      http://www.osha.gov/SLTC/etools/evacuation/                 363-2769. Website: www.salvationarmyusa.org
      index.html – an “e-tool” to help small businesses           United Way: www.unitedway.org. Click “Contact United Way
      implement an emergency action plan and comply with          in Your Area” then enter your zip code for local services, in-
      OSHA’s                                                      cluding:
      emergency standards.
      http://www.cdc.gov/niosh/topics/prepared/ – a                   • Basic human needs, such as food banks, clothing,
      Website provided by the National Institute of Occupa-             shelters, rent and utility assistance
      tional Safety and Health (NIOSH) that provides informa-         • Physical and mental health resources, including
      tion on emergency preparedness for small businesses.              medical information lines, crisis intervention
      http://www.fema.gov/pdf/library/bizindst.pdf – a                  services, support groups, counseling, drug and
      step-by-step planning manual from the Federal Emer-
                                                                        alcohol intervention and rehabilitation, health
      gency Management Agency (FEMA).
                                                                        insurance programs, Medicaid and Medicare,
      http://www.mentalhealth.samhsa.gov/cmhs/
                                                                        maternal health, and children’s health insurance
      managinganxiety/ – a Website from the Substance
      Abuse and Mental Health Services Administration that              programs
      provides information about the emotional side of di-            • Employment support, including unemployment
      saster response, especially managing anxiety in times             benefits, financial assistance, job training,
      of crisis.                                                        transportation assistance and education programs
      http://www.nimh.nih.gov/publicat/violence.cfm                   • Support for older Americans and persons with
      – a Website from the National Institute for Mental                 disabilities, including home health care, adult
      Health (NIMH) that provides information about help-               daycare, congregate meals, Meals on Wheels,
      ing children and adolescents cope with violence and               respite care, transportation and homemaker
      disasters.                                                        services
                                                                      • Support for children, youth and families,
 Resources: employee Disaster needs
                                                                        including childcare, after-school programs, family
 Following is a list of resources that employees and CU members
                                                                        resource centers and protective services
 might find useful after a disaster. You may wish to post it on
                                                                      • Volunteer opportunities and donations
 your intranet and extranet sites.
 American Society for the Protection of Cruelty to Ani- Dr.	Jeff	Van	Pelt	is	a	corporate	wellness	consultant	and	a	
 mals (ASPCA) at www.aspca.org: This site posts informa- freelance	writer.	He	can	be	reached	at	MIG200@comcast.
 tion pertaining to the care and safety of pets after a disaster. net.	


0   Credit Union BUSINESS June 2008                                                                         www.CUBizMag.com
 >> FEATURE | PHISHING




             Ways for CUs
           to Fight Phishing
     Is your credit union doing its part in the war against phishing? This Internet-based practice
        of illicitly securing confidential financial information from unsuspecting individuals by
               posing as a legitimate company (your CU) is becoming more sophisticated.
            Discover how your credit union can fight back against these deep-sea phishers.
                                                                By Phil Hall




 L
              ast March, an email carrying the imprint of the Credit             A separate study from Aite Group LLC in Boston, Mass., found
              Union National Association (CUNA) began to pop up. It        the payment services and the financial sector attracted 48 percent
              was a form letter, addressed to “Dear CUNA Member,”          of all reported phishing attacks during the fourth quarter of 2007.
              and it provided the news that the recipient was the win-            Phishing has even spun-off other criminal activities. Text-
              ner of $200 in a CUNA-sponsored contest. To claim the        messaging-based phishing attacks have already been confirmed,
 prize, the recipient had to click the link in the body of the email and   and the phone numbers of people using Voice Over Internet Proto-
 go to the CUNA Website. Once there, they were asked to fill out a         col (VoIP) are being targeted by so-called “vishing” attacks. That
 survey. Part of that survey required information regarding the mes-       trend appears to be a considerable concern to credit unions. The
 sage recipient’s ATM/debit card number, plus the card’s expiration        National Credit Union Administration (NCUA) has warned credit
 date, CVV security code and personal identification number.               unions that vishing attacks are on the rise, thanks mainly to the
       However, there was a major problem: CUNA never sent out             lack of expense and surplus of ease that allows criminals access
 such a message. Even worse, the CUNA Website housing the survey           to software programs that create phony, automated customer-call-
 was an elaborate hoax.                                                    center service lines.
       CUNA was the target of phishing, a Net-based criminal activity            “The victim is often unaware that VoIP allows for caller ID
 that uses fraudulent emails and bogus Websites to acquire confi-          spoofing, thus providing anonymity for the criminal caller, the
 dential financial information from unsuspecting individuals. In this      NCUA alert noted.
 case, the hoax was easy to detect since CUNA is a trade organization            While awareness of such activities is commonplace, there is
 and not a financial institution (individuals are not CUNA members).       no sign that such attacks are going to decline in the near future.
 However, other phishing attacks have been more successful.
       A recent study from the Anti-Phishing Working Group, a con-         targeting Financial services
 sortium of technology companies and law enforcement agencies,             Ironically, the financial services industry might be helping the
 determined the financial services industry is a ripe target for phish-    phishing rings. The Aite Group study found only 20 percent of
 ing attacks. The group’s study found that financial-services-related      banks covered by the Federal Deposit Insurance Corp. are cur-
 phishing attacks in the 12 months ending November 2007 exceed-            rently using technology that can increase recipients’ assurance
 ed 350,000, a substantial rise from the approximately 100,000             that email messages are legitimate. In comparison, 51 percent of
 reported attacks over the one-year period ending in November              the Fortune 500 are providing such peace of mind, which involves
 2006.                                                                     such relatively simple procedures that allow email recipients to


   Credit Union BUSINESS June 2008                                                                                      www.CUBizMag.com
                                                                                                 >> FEATURE | PHISHING




 check whether their newly received message comes from a trusted          emails using their business accounts to their personal email ac-
 Internet Protocol (IP) address.                                          counts,” says Loren Lloyd, CEO of Lloyd Computer Services, Osha-
       Within the industry itself, it appears the smaller institutions,   wa, Ontario. “If any home personal computer or laptop has a virus
 particularly credit unions and community banks, are more likely to       and an email is sent from it back to the business account, then the
 be in the viewfinder of phishing rings. “Given that larger banks are     virus has then reached the office. From there, it has the potential to
 savvier and doing a better job of educating end users of the threat,     do whatever it was designed to do, including information theft that
 the low-hanging fruit lies in more targeted attacks against smaller      is used in formulating phishing attacks.”
 banks and credit unions that have yet to have their collective fin-           “Most financial institutions test the security health of their
 gers burnt,” says Nick Holland, senior analyst at the Aite Group and     computer ‘perimeter’ on a weekly or monthly basis,” adds Robert
 the author of its report.                                                K. West, founder and CEO of Echelon One LLC in Mason, Ohio, and
       The targeting of credit unions is even more problematic, since
 many of these institutions are ramping up their online marketing
 activities. Another Aite Group report, “The Information Technology
 Priorities of U.S. Credit Unions” (issued in January 2008), found
 the industry moving faster into online solutions – which, in turn,
                                                                               The financial services
 would open them to new phishing attacks.
       “Credit unions’ attitudes toward technology place them at an
                                                                              industry is a ripe target
 advantage over many banks, especially community banks, which
 tend to be more cautious technology adapters,” says Christine Bar-             for phishing attacks.
 ry, the report’s author. “In today’s environment, where technology
 can help to level the playing field, an aggressive technology strategy
 is key to survival.”                                                     former chief information security officer for Fifth Third Bank. “The
                                                                          word perimeter is in quotes because, practically speaking, there
 Can CUs Prevent Phishing?                                                hasn’t been a perimeter in most enterprises for quite some time. As
 For IT experts polled by “Credit Union BUSINESS,” the problem            important as the technologies being used are the processes and the
 has more to do with the people operating the high-tech systems           knowledge people have. People should understand what they need
 than the actual hardware and software. “One of the main problems         to do to protect an organization’s information, and what they need
 that encourages phishing penetration is having your staff sending        to do varies based on their role in the organization. A member of



www.CUBizMag.com                                                                                   June 2008      Credit Union BUSINESS        3
 >> FEATURE | PHISHING

                                                                                                                     opportunity to remind people
                                                                                                                     to stop and think and ask them-
                                                                                                                     selves, ‘Does this email seem
                                                                                                                     reasonable?’” she says. “A little
                                                                                                                     common sense can go a long
                                                                                                                     way. If it sounds phishy, maybe
                                                                                                                     it is.”
                                                                                                                         Credit unions are also turn-
                                                                                                                     ing up in promotional materi-
                                                                                                                     als for computer security com-
                                                                                                                     panies. For example, Verisign
                                                                                                                     Inc. recently issued a press
                                                                                                                     release trumpeting how “more
                                                                                                                     than 100 credit unions” were
                                                                                                                     using its technology to fight
                                                                                                                     against phishing attacks.
                                                                                                                         “For us and for our mem-
                                                                                                                     bers, the real currency of do-
                                                                                                                     ing business online isn’t money
                                                                                                                     at all; it’s trust,” says Pete
     the executive team needs to know strategic actions to take. Other        Kneisler, vice president of information services at San Mateo Credit
     significant people within an organization include system admin-          Union, in the press release. “The values of trust and community go
     istrators, application developers, project managers and regular          to the very heart of the credit union concept, which means we must
     employees.”                                                              do everything we can to preserve those values.”
           Having a disaster recovery plan in place can help a credit               Many credit unions are also publicizing their ability to thwart
     union respond to a phishing threat. “There are processes that need       off such activities. In March, Hudson Valley Federal Credit Union
     to be in place that allow an organization to respond to unusual          alerted the local media and posted a news alert on its Website that
     events, such as attacks on computer systems, phishing, disasters,        detailed how members and non-members were receiving a com-
     system outages, etc.,” West continues. “Information is well protect-     bination of phishing and vishing inquiries. These hoaxes claimed
     ed when the right combination of people, process and technology          that membership in the credit union was in immediate need of re-
     are used.”                                                               newal.
           Credit union members must also be part of the anti-phish-                “This message does not come from HVFCU and is a phish,”
     ing plan. Tonya Robichaud, president of ETR Consulting in Woon-          the financial institution stated in its Web alert. “If you receive such
     socket, R.I., notes that members can help their credit unions just       a message, don’t respond.”
     by updating their computers’ Web browsers.                                     Despite efforts to stay on top of the situation, there is a better-
           “I would encourage financial institutions to tell their custom-    than-average chance that these activities will not wane. “I see the
     ers to upgrade to the latest versions of Firefox (currently Version 2,   number of attacks increasing as well as the sophistication of the
     with Version 3 imminent) or Internet Explorer (currently Version         attacks,” says Echelon One’s West. “The vast majority of attacks are
     7 with Version 8 imminent),” she says. “They have stronger and           being perpetrated by criminal elements such as the Russian Busi-
     more sophisticated anti-phishing filters built in. A large percent-      ness Network, criminals, etc. The motive for attacks has changed
     age of the victims are people who still run older versions of the        from someone trying to get headlines for defacing a Website to
     browsers that don’t have as strong [of] security, other patches and      pure profit motive. This [shift] changes the game, and thus the
     updates for known security holes. Upgrading a browser won’t end          solutions necessary to protect an organization need to be more
     phishing, but it will help cut down on the numbers.”                     robust.”
           Beyond the Web browser upgrade, Robichaud suggests that
     credit unions actively educate their members on the threat. “Fi-         Phil	Hall	is	a	business	and	technology	journalist	based	in	
     nancial institutions should use every communications vehicle and         Fairfield,	Conn.



4      Credit Union BUSINESS June 2008                                                                                          www.CUBizMag.com
                                                                     >> FEATURE | SECURITY ANALYSIS




                     5 Security Tips
                        Safeguard Members
                        and Your Reputation
   More and more frequently, headline-making security breaches are involving credit unions.
        Your CU can circumvent this trend with a greater focus on privacy and security.
        These tips will help you safeguard not only your members’ personal safety but
                              also your credit union’s reputation.
                                                 By Ursula Furi-Perry, Esq.




 A
                recent article on NetworkWorld.com, a Website        Carl commented via email and cited the NCUA’s Office of Ex-
                affiliated with “PC World Magazine,” reported        amination and Insurance as his source. “At credit unions, ex-
                on a stunning security breach at Priority One        ecutives should diligently safeguard member information to
                Credit Union in California. The author says he       prevent money laundering and terrorist financing, to reduce
                – along with other members – received an elec-       fraud and to inhibit identity theft.”
 tion ballot with his account number and social security num-
 ber printed on the outside.                                         Balancing security – Layered Approach
      That incident is far from the only security breach in-         Guarding privacy is no easy task – nor is it one dimensional.
 volving credit unions lately. Many credit unions are focusing       “There is no magic bullet that addresses security concerns,”
 more on privacy and security issues in the wake of recent se-       says Dean Marshall, CISSP, executive vice president at ECCT,
 curity breaches at merchants, some of which have adversely          Inc. in Yaphank, N.Y. ECCT provides security and privacy so-
 affected credit unions. Credit unions are also mandated by          lutions to credit unions nationwide. “The way to structure
 federal and state laws to comply with privacy and security          a solid security program is [to take] a layered approach.”
 regulations.                                                        Credit unions that get in trouble over privacy issues miss the
       “Credit union members have been impacted, along with          boat when it comes to structuring a layered policy, Marshall
 countless others, by Internet phishing scams and [more]             explains. For example, they may have an excellent firewall but
 recently “vishing” telephone scams, both attempts to secure         not enough compliance monitoring; or they may train their
 personal account information,” explains the National Credit         staff on privacy compliance matters but fail to give them the
 Union Administration’s Jeremy Carl, associate director of ex-       tools they need to implement and monitor security properly.
 ternal affairs in the Office of Public and Congressional Affairs.


www.CUBizMag.com                                                                           June 2008    Credit Union BUSINESS     5
 >> FEATURE | SECURITY ANALYSIS

 The key, Marshall says, is a layered policy that cuts across the   rectors is promoting oversight for the security applications,”
 entire credit union organization.                                  Marshall explains, but management isn’t necessarily expected
       So, what should a properly layered policy include? Mar-      to implement those applications; rather, they are expected to
 shall recommends starting with “policies that govern the rules     hire people in house to monitor them. Marshall recommends
 of the road for what employees are allowed to do over email        having people in house to manage day-to-day privacy and se-
 and on the Internet,” he says. Also, credit unions should have     curity issues, and then turning to outside experts to handle
 policies in place to deal with continuity in privacy and secu-     major issues, like upgrading equipment.
 rity as well as disaster recovery. “The next thing I’m looking          “If you set up a layered defense correctly ... if there
 for is: Does [the credit union] have policies in place that are    [are] inadvertent breaches of security ... we will detect that,”
 implementing those policies?” Marshall says. For example,          Marshall says. He gives emails that contain account numbers
 he indicates that it’s not enough to say that administrative       as an example. What’s tougher to catch is employee miscon-
 passwords should be tough to crack; rather, the credit union       duct. “If somebody is being malevolent, those are the tough-
 should have rules about the requisite number of characters         est ones to detect,” Marshall believes. He says that the best
 in passwords and the maximum amount of time that can pass          way to safeguard against employee misconduct is to perform
 before those passwords must be changed.                            diligent pre-employment screening and background checks,
       Next, Marshall says that he looks for technology controls,   and then update those investigations periodically, as needed.
 and then management controls to oversee day-to-day security
 management. He does so whether or not “there are checks            Knowledge and training
 and balances looking for consistency in the organization,”         Employee training is another huge concern in security and
 he says. Then come “operational controls,” he continues, or        privacy compliance, and Marshall says no program will be
 “consistent security practices that are being followed. Finally,   successful without proper training. He gives an example of a
 I make sure that there are some types of auditing controls in      credit union client he recently served, which spent half a mil-
 place.”                                                            lion dollars on new security equipment then hired his firm to
       Of course, there’s also the matter of equipment and soft-    perform a staff assessment. Marshall simulated various types
 ware upgrades. “Hackers are always developing new tech-            of con-artistry and successfully got sensitive information from
 niques, and we have to come up with new ways to fix that,”         employees. He also set up email and Internet spoofing that
 Marshall points out. Marshall also stresses that a successful      looked like messages from the credit union’s IT department
 security program must carry a consistent commitment – the          – and over 40 employees entered sensitive information about
 credit union can’t be a “grasshopper,” he says, jumping on         members online, he says. Marshall also found multiple trash
 the information security bandwagon after something adverse         bags with un-shredded and readily identifiable member in-
 has already occurred.                                              formation, including social security numbers, driver license
       Marshall says that when it comes to implementing and         numbers and loan applications.
 managing a security policy, it’s best to balance in-house man-           Despite the credit union’s new equipment, “The rea-
 agement with help from outside experts – in fact, he says          son that we were able to drive a truck successfully through”
 it’s best to use various vendors (each of them proficient in       was lack of thorough staff training, Marshall points out. Yet
 their area of privacy protection) in order to have a system of     training can be one of the easier parts of security and privacy
 “checks and balances.” Marshall says that his credit union         compliance. “It is the least expensive dollars that somebody’s
 customers bring him in for a variety of services, including        going to spend,” Marshall says. The key is structuring the
 vulnerability assessments and intrusion monitoring.                training program across the board and sending a top-down
       “The [federal] examiners expect that the Board of Di-        message about the program’s importance, Marshall stresses.


6   Credit Union BUSINESS June 2008                                                                            www.CUBizMag.com
 >> FEATURE | SECURITY ANALYSIS


 When employees see senior management attend training, they
 understand that security and privacy are important concerns
 for the credit union.

 Knowing the Members
 “One of the effective security measures credit unions can
 implement or enhance to mitigate the risk associated with
 a security breach is an effective and reliable authentication
 system,” says the NCUA’s Carl. “Authentication is the process
 of verifying a member’s identity using a variety of method-
 ologies and technologies before the member gains access
 to the Internet banking system.” The NCUA, along with other
 Federal Financial Institutions Examination Council agencies,
 developed authentication guidance for credit unions, which
 is contained in several NCUA letters to federally insured credit
 unions, in 2005 and 2006.
      Phishing scams can make credit unions particularly vul-
 nerable to security breaches. According to the NCUA, “Phish-       Dean	Marshall,	CISSP,	executive	vice	president	at	
 ing is a form of social engineering, one that is characterized     ECCT,	Inc.
 by attempts to fraudulently acquire sensitive information,
 such as passwords, accounts, credit card details, etc., by         the Internet-related services they provide to members,” the
 masquerading as a trustworthy person or business in an ap-         NCUA’s Carl says. To be thorough, NCUA recommends that
 parently official electronic communication, such as an email       the assessment consider the type of account (such as whether
 or an instant message. Often the message includes a warn-          it’s a member account versus a business account), member
 ing regarding a problem related to the recipient’s account         transactional capabilities (for example, share draft, bill pay-
 and requests the recipient to respond by following a link to a     ment, wire transfer or loan origination), confidentiality of
 fraudulent Website and providing specific confidential infor-      the member information communicated between the credit
 mation. The format of the email typically includes proprietary     union and the member, the ease of using the communication
 logos and branding, such as a ‘From’ line disguised to ap-         method and the volume of transactions.
 pear as if the message came from a legitimate sender, and a
 link to a Website or a link to an email address. All of these      Regulation and CU Leagues
                                                               But perhaps the greatest challenge in security and privacy
 features are designed to assure the recipient that the email is
 from a legitimate business source when in fact, the informa-  compliance is simply “keeping up with the magnitude and
 tion submitted will be sent to the perpetrator.” (www.ncua.   the dynamic nature of the regulations that are put upon credit
 gov/letters/2005/CU/05-CU-20.pdf)                             unions,” Marshall says. He explains that credit unions are so
                                                               concerned with trying to master security that they don’t “get
 Risk Assessment                                               to be credit unions.” “How do we get to attract new custom-
 To fight security breaches due to phishing scams and other ers and retain our existing customers when we have to spend
 potential breaches, solid risk assessment practices are es- so much time [on privacy and security issues]?” Marshall
 sential. “In order to help prevent security breaches, credit points out. “The smaller the credit union, the more daunting
 unions should identify and evaluate the risks associated with

8   Credit Union BUSINESS June 2008                                                                            www.CUBizMag.com
                                                                   >> FEATURE | SECURITY ANALYSIS

 the task,” as larger credit unions tend to have more security           Other credit union leagues are also trying new things to
 and privacy resources. Marshall says that continued attention     improve security and privacy issues. On its Website, the Vir-
 must be paid to new and changing regulations. “Too often,         ginia Credit Union League offers several security resources,
 small credit unions get the letter regarding their safeness and   including sample security plans, asset liability management
 soundness review, and that’s when they start jumping,” he         worksheets and information on phishing scams and other
 says. Marshall lists NCUA privacy laws and letters to credit      potential breaches. The Washington Credit Union League has
 unions as some examples of federal regulations that demand        advocated for state legislation – which recently passed – that
 compliance; state credit unions also have to comply with their    allows identity theft victims to place a freeze on their credit
 respective state privacy laws.                                    reports.
       The issue is getting so much attention that even credit           “You always have your league as a resource,” Brosius
 union leagues are catching on to the need for better privacy      notes. As for ACUL’s program, “It’s one of the best things
 and security regulations. In fact, some are going even fur-       we’ve been able to offer to our members in a long time,” she
 ther: offering services, education and information to help        says.
 their member credit unions get a better grasp on privacy laws
 and to protect themselves and their members from security         stay Alert
 breaches.                                                         But the buck does not stop at the credit union. “[E]xecutives
       The Arkansas Credit Union League (ACUL), for example,       should inform their members about the practices they have
 has started a free Security Breach Response program for its       in place to protect the members’ personal information,” the
 members. The ACUL has partnered up with Identity Theft 911,       NCUA’s Carl adds. “Member education is critical for reducing
 which is an identity theft education and resolution service       account fraud and identity theft. One thing that can be done
 provider, to offer credit union members ways to minimize          is implementing a customer awareness program and evaluat-
 the effects of a breach and manage situations that may be         ing current education efforts to determine if additional steps
 construed as security breaches.                                   are necessary.” Some credit unions offer a security resource
      “We’d been looking for a program that would provide          center for their members, complete with fraud alerts, privacy
 some good compliance information for our members,” ex-            notices, legal information and other issues dealing with pri-
 plains Becky Brosius, chairman of the board at ACUL and           vacy and security. Credit unions should also adopt policies
 CEO of Alcoa Federal Credit Union in Benton, Ark. Brosius         against initiating requests for members’ sensitive informa-
 says that the program was definitely in demand by members         tion via email and they should let their members know about
 and was started after member credit union executives re-          those policies.
 peatedly asked for privacy and security information – such              And clearly, credit union executives must keep an eye
 as information about where they could find sample policies,       on their vendors as well – after all, many of the reported
 or who might be a good source for answers to compliance           breaches that have affected credit unions have occurred at
 questions.                                                        vendors. Last year’s massive security breach at Massachu-
      Brosius calls ACUL’s resource a good place to get start-     setts-based TJX Cos., Inc., for example, affected many credit
 ed, complete with sample policies and a place to search for       union members who were shopping at the company’s T.J.
 credit–union-specific information. She believes that small        Maxx, Marshall’s, HomeGoods and A.J. Wright stores nation-
 credit unions in the state will benefit most from using ACUL’s    wide. To help avoid security breaches, credit unions must be
 resources; after all, Brosius points out that smaller credit      clear about their vendors’ security and privacy policies.
 unions generally need to outsource their security matters and           Of course, Marshall notes that even the best privacy pro-
 therefore require outside help.                                   gram isn’t necessarily going to be foolproof. “If somebod-


www.CUBizMag.com                                                                          June 2008    Credit Union BUSINESS     9
                                   ANALYSIS
 >> FEATURE | SECURITY4/7/08 9:42 AM Page 1
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                       The Credit Union Industry’s Leading Creative Services Agency

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                                                                                              by the phishing or email scam, including flagging and moni-
                       No CU is breach-proof.                                                 toring their accounts and referring them to the NCUA for in-
                                                                                              formation about minimizing the risks of identity theft, and
                                                                                              alerting staff to the incident and training them as necessary.
 does 110 percent of everything that could be possibly done,                                  (http://www.ncua.gov/letters/2005/CU/05-CU-20.pdf)
 they’re still not going to be breach-proof – but they’re going                               Some credit unions that have experienced security breaches
 to be breach-resistant,” he says.                                                            of many different kinds have also picked up the tab for af-
                                                                                              fected members’ credit monitoring services, generally up to a
 If It Happens?                                                                               year from the date of the breach.
 And what to do if there has been a breach or suspected breach?                                     Solid security and privacy practices aren’t just the law;
 “If a credit union detects unauthorized access to member or                                  they also translate into good business sense. After all, mem-
 credit union accounts, it should report the breach to local                                  bers will be likely to leave a credit union that continues to
 law enforcement officials and [its] NCUA Regional Director,”                                 have issues with security. For the sake of your business, and
 the NCUA’s Carl says. If the credit union is affected by a sus-                              for the sake of legal and regulatory compliance, ramping up
 pected phishing scam, the NCUA recommends promptly post-                                     your privacy and security practices makes sense.
 ing a notice on the credit union’s Website, contacting mem-
 bers and alerting them to the potential breach, monitoring Ursula	Furi-Perry,	J.D.	is	a	nationally	published	freelance	
 member accounts for unusual activity and trends, working writer,	attorney	and	college	instructor	in	Massachusetts.
 closely with members who report that they were victimized


30                     Credit Union BUSINESS June 2008                                                                                           www.CUBizMag.com
                                                                     >> CUB CLOSEUP | GARY OAKLAND




         Gary Oakland Pilots
        BECU to New Heights
   Meet the teller-turned-CEO who managed to lead his credit union from approximately $750
   million in assets to its current $8.4 billion in just over two decades. BECU CEO and president,
    Gary Oakland, gives an insider’s glimpse into how he accomplished this impressive feat.
                                                       By LaRita M. Heet




 L
             et’s face it: We all love a great success story, es-
             pecially one that begins with a credit union teller
             (with less-than-stellar tseller skills) who rises to
             the top faster than the crème de la crème. But
             when this teller-turned-CEO manages to lead his
 credit union from approximately $750 million in assets to
 its current $8.4 billion in assets in just over two decades, it’s
 time to sit up and take notice – and notes.
       Who is this CU guru? It’s Gary Oakland, CEO and presi-
 dent of BECU (formerly known as Boeing Employees’ Credit
 Union, but today “BECU”), which currently has more than
 half a million members. The second largest state-chartered
 credit union, according to the National Association of State
 Credit Union Supervisors (NASCUS), a professional regula-
 tors association, BECU is also the fourth largest credit union
 (by asset size) in the United States.
       Oakland’s credit union career began directly out of col-
 lege, when he took a teller’s position at Seattle Telco Federal
 Credit Union. Though Oakland hadn’t necessarily planned
 to get into the credit union industry, he’d always planned to
 get into the financial services business. Since there weren’t
 many openings at banks for the management training posi-
 tions, when he heard about the opportunity at Seattle Telco,
 he went there to check it out, and he liked what he saw.            Gary	Oakland,	CEO	BECU




www.CUBizMag.com                                                                          June 2008   Credit Union BUSINESS   31
 >> CUB CLOSEUP | GARY OAKLAND

      Not that he lasted long as a teller, Oakland admits with      ought to operate and work with the members, and the whole
 a laugh. “Well, it didn’t take me very long [to move up],          framework of the cooperative model seems to come pretty
 mainly because I didn’t balance all that well. So, they said,      intuitively to me. So, I have that, and ultimately, in some form,
 ‘Okay, wait. You can’t balance, so let’s try something else,’ so   being able to translate that into an actionable direction – to
 I pretty rapidly went through teller to loan interviewer to loan   give the board, the rest of the management team and people
 officer, then collections, accounting, some building manage-       who work at the credit union a sense of where we ought to be
 ment, and … assistant manager … within about a five-year           heading and why,” says Oakland.
 period.”                                                                 Oakland believes communication is key to the business
      Oakland’s next step was moving to BECU as its director        of a successful credit union. “To begin with, you can’t over-
 of finance, a position that encompassed a lot of the credit        communicate. There’s always an opportunity to clarify and
 union’s investments, including the checking department, real       remind people about where we’re going and why,” he says.
 estate and some of the other areas. Each of these departments            By depending on his intuitive sense of what works and
                                                                                     what doesn’t, and by combining that under-
                                                                                     standing with the credit union mission, Oakland
     “You can’t over-communicate.”                                                   has found a way to motivate the other employ-
                                                                                     ees at his credit union. “I guess I didn’t rely on
                                                                                     a textbook-type of philosophy or management
 reported to Oakland. “Then slowly, as we changed, some of          style to follow, so I really don’t know what it is, or has been
 the other areas started reporting in and planning.” Within six     [that has made his style of management work]: respecting
 years, Oakland had become the vice-president of finance and        people, counting on people, relying on people, giving them
 then was “essentially selected to become the next CEO,” he         the opportunity to develop their skills, and more importantly,
 says.                                                              to apply their aptitudes where [they] could be most benefi-
      “[My advancement at BECU] happened faster than I              cial, getting a lot of smarter people working around you than
 thought and I had no idea that that was in the cards when I        you are yourself.”
 came here. But I guess some other people thought that I had
 the potential to be able to do that,” he says.
       Oakland credits his appointment as BECU’s CEO to two                “Respecting people,
 primary factors. “First, [I had] some really good mentors
 and coaches that gave me the opportunity to try things out                 counting on people,
 and champion some things, and allow for the fact that not all
 of them (those things) were necessarily going to work, but                relying on people…”
 hopefully [would allow me] to learn from them. So that was
 the big thing – having a lot of support from my bosses and
 co-workers. And then, [my] being willing to try new things.        Admittedly, Oakland’s managerial skills seem – at first blush
 Being able to see maybe down the road a little bit further than    – like an extension of the empowering freedoms his own su-
 other people sometimes, and looking on to ideas that would,        pervisors allowed Oakland earlier in his career. He says, how-
 ultimately, help the credit union in at least some cases ….”       ever, that his general business philosophy would have made
                                                                    him into the same type of leader he is. “I think it would have
 executing the Cooperative Model                                    happened that way either way. There are certain elements of
 “I think I am pretty intuitive about the way credit unions         it that are very reflective of the people that helped me, but at


3   Credit Union BUSINESS June 2008                                                                               www.CUBizMag.com
                                                                   >> CUB CLOSEUP | GARY OAKLAND

 the same time, we had very different styles. The ‘command         more comfortable with the traditional, fire-and-brimstone
 and control’ style is something that I’ve grown up with, but      form of management, also known as “my way or the high-
 [I’ve] tried to become much more collaborative and collegial      way.”
 in the management of the organization,” says Oakland.                    Instead of taking offense at the skeptics, however, Oak-
       Though many business executives – including credit          land says he takes in the comments. “I try and take the in-
 union industry execs – depend on a particular “command            put, and understand the source of it, understand how that
 and control” style of management, this is definitely not Oak-     view was developed, and respond in a way that addresses
 land’s style. Instead, Oakland’s more collaborative approach      it in some manner, but probably more than anything else,
 means he gives a lot of latitude and trust to the “people who     it’s just turning around and trying to increase the amount of
 knew more about what they were doing than I ever would,”          communication that you have. Because if there’s a sense that
 he says. “I think that would have happened that way [any-         you need to have, in my position, more control, that means
 way], based on the people that I had [worked with earlier in      that the people that are working in the organization, or are
 my career], but at the same time, we had very different styles    involved in the organization, don’t comprehend – or believe
 once we put it into practice.”                                    – in the direction [in which] you’re trying to lead.”
       “Mine is not a command and control style. Mine is a lot           Not surprisingly, Oakland believes that one of the top
 more collaborative and reliant on other people’s skills, get-     skills a credit union executive should possess is communica-
 ting them involved [and] getting them to buy into the direc-      tion related. “It probably starts with listening and then good
 tion [in which] we wanted to move. And then, turn it over to      additional communication skills: being able to express your
 let them implement,” Oakland says.                                thoughts so others can understand where you’re coming from
       As most credit union leaders will agree, getting everyone   and where you’re trying to lead,” he says.
 in the credit union “on board” is vital to the credit union’s           From a technical standpoint, Oakland says, he does not
 success as a cohesive organization. And for a leader like Oak-    hold a lot of stock in the “technical skills area” for credit
 land, “everyone” doesn’t just refer to the upper echelon of       union executives. “I think that’s what you get the right people
 the CEO, COO, CFO and CIO, but to every single employee of        surrounding you to be able to do … to have the skills, wheth-
 the credit union. “There would be slight differences as far as    er it’s in finance or IT or HR.”
 maybe some of the rest of the executive management team           This is not to say a credit union leader should have no knowl-
 [and] how they would manage in their particular areas, but I      edge of these areas. Oakland believes that a good credit union
 didn’t get involved in that.”                                     executive should understand the implication and importance
                                                                   of the various systems, and how they relate to each other, but
 Management by Flying Around                                       says that as long as he has skilled employees whom he trusts
 During Oakland’s early days as CEO, some consultants came         and can hold accountable for handling these tasks, he doesn’t
 into the credit union to teach team building skills. After ob-    need to know each detail about computer maintenance or the
 serving Oakland in action for only a brief time, they described   specific requirements in the organization’s HR policy.
 his leadership style with an airplane-related metaphor, say-
 ing that the CEO was “flying the plane at 40,000 feet and let-    Future Challenges
 ting the rest of the executive management team be the flight      Though the skills of listening and communication are time-
 control, managing everything that was going on at the lower       less for any business executive, Oakland predicts that over
 levels on a day-to-day basis,” Oakland says.                      the course of the coming years, the need for these skills will
       Oakland’s outside-the-box thinking and leadership style     only increase.
 are occasionally met with skepticism from those who are


www.CUBizMag.com                                                                         June 2008    Credit Union BUSINESS      33
 >> CUB CLOSEUP | GARY OAKLAND


                                                                                            forms of communication that you have
                                                                                            to be able to master and relate to [with]
                                                                                            these new members coming in as well
                                                                                            as keeping in touch with the members
                                                                                            that have been here for a long time,” he
                                                                                            says.
                                                                                                  Foreseeable future trends all point
                                                                                            to those products, services and organi-
                                                                                            zations that provide whatever the con-
                                                                                            sumer needs. What these trends will
                                                                                            be, exactly, will be redefined again and
                                                                                            again by the consumer’s or member’s
                                                                                            particular needs and on each individual
                                                                                            person’s own, very specific terms.
                                                                                                  “We will see, in the next five years,
                                                                                            finally the convergence of a lot of
                                                                                            technology, regulatory capabilities or
       Because of the rate at which changes occur and new de-       empowerment, and demographic preferences around how
 mands are made by increasing technology, products, services        financial services are delivered,” says Oakland. “It’s been
 and more, it is simply unrealistic to think that one single per-   talked about [with] a cashless society and that checks are
 son – the CEO, for example – could possibly keep current on        going away and all that kind of stuff, and those things, we’re
 every unique skill, technological trend, human resource law        not going to necessarily see in our lifetime. But we’re going to
 and policy, etc., which only demonstrates Oakland’s point.         see the convergence of more and more growth in the remote,
 “In the future, there’s going to be even more of a need to         self-defined types of convenient delivery of financial services,
 engage more people in the overall philosophy or culture of         where the consumers are not defining convenience in terms
 the [credit union] organization, because … to think that an        of a branch, or the relationship is not with a personal banker
 individual can have all of the skills necessary to make sure       or a teller or a branch manager; [rather] the relationship’s
 the credit union is kept on course, I think is going to be more    with the institution, and the consumer(s) can define, on their
 and more difficult to manage, and the less that you allow          own terms, where and when they want to conduct their fi-
 more minds into that direction, the harder it is for the credit    nancial services. So the convenience factor, which has always
 union to progress and become better.”                              been really important in financial services, I think will totally
       Oakland anticipates it becoming more difficult to adjust     be redefined in the terms of the member or on the terms of
 to upcoming changes for several reasons. “Because of the           the consumer.”
 rate of change, the amount of complexity, the regulatory en-
 vironment that we operate in, the different … work styles          Facing Members
 and work ethics that are coming into the credit union [with        Some members define their credit union relationship in terms
 new] employees, the changing look and requirements of the          of being able to speak with an employee face to face. Oakland
 members. It used to be that all you ever needed was the abil-      says that allowing members to define convenience on their
 ity to write a nice letter or talk well over the telephone, but    own terms is the basis of BECU’s entire operating system. For
 now you’ve got emails and texting and all of these kinds of …      example, BECU has already developed a very non-traditional


34   Credit Union BUSINESS June 2008                                                                               www.CUBizMag.com
 >> CUB CLOSEUP | GARY OAKLAND

     branch system – one that has no teller lines. “We don’t want        by the time you get to the big thing that you’ve wanted in the
     to put a wall between us and our members, which is basically        first place, you’ve done about a dozen things in the mean-
     a teller line. We want that interaction, because once the wall      time that ended up in a different place because that’s where
     is there, that interaction only becomes a transaction. What we      the consumer is now, that’s where the technology is now,”
     want that interaction to be is a conversation so that when our      he says. “So, constantly doing small things [is essential], be-
     consultants are talking with our members, they’re getting to        cause then the members see the credit union as constantly
     the heart of what is it that the member really wants and really     evolving, constantly improving, and you’re learning from the
     needs? We’re not worried about just doing a transaction. We         piece that you just put in how to improve on the next one and
     want it to be a conversation, and we think that’s one of the        get it out even faster.”
     challenges that are out there: How do you put a personality               BECU’s multi-billion-dollar assets speak to Oakland’s
     behind that, without having to do it on a face-to-face basis?       success with managing the organization and its people. True
     What the consumer still wants is not only a contact and a face-     to form, Oakland says, “I really don’t look at many numbers.
     to-face relationship at the time of establishing the relation-
     ship, but just the knowledge that, at some point in the future
     if they need to, they can go back and have that face-to-face
     for a particular situation. But, for the vast majority of things,
                                                                               “Understanding what
     [we] teach the member(s), in these conversations, how they                members are talking
     can define their own sense of conducting financial services,
     whenever and wherever they want to – not just where we hap-                about ... talking to
     pen to be and when we happen to be open,” says Oakland.
                                                                                  my peers.... ”
     Best Advice
     Oakland’s advice to other credit union executives follows
     naturally from his forward-thinking philosophy. “Constantly         I really try to keep [tabs] on [the credit union’s business] by
     change,” he says. “And, in fact, almost to the point where,         understanding what members are talking about, by talking to
     as rapid as change has become over the last few decades, we         my peers and [by] finding out their view of not only what is
     need to be in a position of being able to change faster than        going on with them, but [gaining] some sense of their view of
     what’s happening around us. The way I try to exhibit that or        how we’re doing. Again, it’s very intuitive. It’s not where I can
     put that into operation as a credit union is not looking for a      go down and have a particular set of reports given to me, and
     homerun every time.”                                                I can make a judgment from that; it’s the feel, the culture, the
           Instead, Oakland believes it’s important to recognize that    sense of accomplishment that the people that work here have,
     the more time the credit union CEO or other executive spends        and that the members demonstrate as well.”
     in trying to develop some earth-shattering, break-through
     type of service or concept, the more time and resources that        For	more	than	16	years,	LaRita	Heet	has	been	a	freelance	
     are being lost in search of this often-elusive newest, hottest      writer	and	editor.	To	date,	she	has	published	more	than	
     program. “This is time [in which] resources are being di-           1,500	 articles.	 She	 can	 be	 reached	 at	 laritaheet@gmail.
     verted, you’re throwing money into it, it takes a long time to      com.
     get it to market, and by the time it gets to market, the market’s
     changed. [Instead, you could focus on] doing a lot of little
     things all the time, that add and build on each other, so that


36      Credit Union BUSINESS June 2008                                                                               www.CUBizMag.com
                                                                          >> MEMBER GROWTH REPORT



 WWW = New Members
 CUs Recruit Online
 Is your credit union taking advantage of the 200 million – and growing – Americans who
 access the Internet? If you think the World Wide Web is only about spending money,
 think again. Discover how enabling non-members to join your credit union without ever
 setting foot in a branch can give you a competitive edge. By Nancy Mann Jackson




  A
                mericans spend more time online than ever be-      Program. The online program allows non-Meriwest members
                fore. According to research by Harris Interac-     to join the credit union, open a variety of products and fund
                tive, almost 200 million Americans had access      their accounts from another financial institution. All these
                to the Internet in 2006, and the number con-
                tinues to grow. The World Wide Web is fertile
  ground for shopping, dating, even operating a business. In          New members who are
  fact, more than 70 million people made online purchases
  last year on “Cyber Monday,” retailers’ nickname for the           joining online are from a
  Monday after Thanksgiving, which officially kicks off the on-
  line holiday shopping season.                                       younger demographic.
        But the Internet isn’t just about spending money; it can
  also be a place to save and manage money as well. And for
  years, most credit unions have made it possible for members   tasks can be completed in a fully secure Internet environment
  to conduct simple banking business, such as checking their    from the Internet visitor’s own home or office. As one of the
  account balances or transferring funds from one account to    largest CUs serving the Silicon Valley, arguably the country’s
  another, online. However, few have offered opportunities for  most tech-savvy community, Meriwest is uniquely meeting the
  non-members to join their credit unions without ever step-    needs of its local community by offering the Internet member
  ping foot in a branch.                                        acquisition program.
                                                                     “Meriwest recognizes that online account opening and
  Meriwest CU gets Competitive edge                             funding is required to maintain our competitive edge in a
  Meriwest Credit Union, a 45-year-old institution based in world [that is[ dominated by technology and the Internet,”
  San Jose, Calif., is one of the first credit unions to expand says Tony Cortez, vice president of marketing at Meriwest
  its online position and begin utilizing the Web as a tool for Credit Union.
  growing its membership. In addition to maintaining active
  accounts online, it harnessed the power of the Internet to Recruiting Members online
  leverage growth. Early this year, Meriwest introduced its In- For Meriwest, choosing to make member acquisition avail-
  ternet-based New Member Acquisition and Online Funding able online wasn’t a tough decision. In fact, the decision


www.CUBizMag.com                                                                         June 2008   Credit Union BUSINESS     37
 >> MEMBER GROWTH REPORT

 simply seemed like the natural next step for a fi-
 nancial institution that was focused on providing
 convenient service and manipulating technology
 to meet its needs effectively. “We’re simply us-
 ing the technology that’s available,” Cortez says.
 “There’s another generation that’s used to using
 technology for everything and this was a niche we
 were able to fill.”
      To create the program, Meriwest partnered
 with Online Resources, a Chantilly, Va.-based
 company that powers financial technology ser-
 vices for thousands of financial institutions, billers
 and credit service providers, and has a Custom
 Solutions office in Woodland Hills and Pleasanton,
 Calif. Online Resources develops and provides
 account presentation and payment services for                          Although the online member acquisition program is
 clients like Meriwest, and its services then carry the client’s   available for any Internet user to find, Cortez has not been
 brand. The company also provides marketing services to            surprised by the fact that most of the new members who are
 drive consumer and business end-user adoption to its online       joining online are from a younger demographic group. That
 financial services.                                               is because that age group is more technologically savvy and
       At Meriwest, the marketing campaign surrounding the         spends more time on the Internet than its older counterparts.
 new online account acquisition program hasn’t yet begun,          Incidentally, it’s also the age group that most credit unions
 but tech-savvy consumers in the CU’s market are already tak-      are vying to reach. According to research data from the Credit
 ing notice. In fact, many of them have discovered Meriwest        Union National Association, 61 percent of non-credit–union
 and its easy online application process completely on their       members between the ages of 18 and 34 are eligible to join a
 own. About three months after the New Member Acquisition          credit union, but they have not chosen to do so. For Meriwest,
 and Online Funding Program was online, the CU had still not       online member acquisition may be one solution to the elu-
 begun marketing the tool – but more than 125 new members          sive problem of recruiting younger members. “The majority
 had joined online.                                                of [members joining online] are younger,” Cortez says. “It’s
       “That’s a pretty decent number for not marketing it,”       great from Generation Y and Generation X. Sixty percent to
 Cortez says. “So far, it’s been more of a discovery thing; peo-   70 percent of the members joining [online] fall within that
 ple are being driven to our site through other marketing ef-      category.”
 forts and finding the new tools while there.”                           While the CU’s membership rolls are growing online
       Upon launching the online program, Meriwest added an        without a specific marketing campaign, executives do plan to
 option to join the CU on every page of its Website. “If some-     push the new program through targeted marketing later this
 body’s not a member and they want to get more information,        year. “As we get further into it, we’ll do an entire campaign
 they’ll go to our Website,” Cortez says. “If they decide, ‘We     to push the online program,” Cortez says. That campaign is
 definitely want to be there,’ then they can easily join right     likely to include radio advertising, newspaper advertising, di-
 there by clicking on the ‘Join Meriwest’ button.”                 rect mail and branch promotions, according to Cortez.



38   Credit Union BUSINESS June 2008                                                                           www.CUBizMag.com
                                                                           >> MEMBER GROWTH REPORT


      So far, Meriwest has no complaints. “We’ve been very          online,” he says. “But they can just as easily go in to a branch
 pleased with it,” Cortez says. “The response from the new          or drive through a branch and have their needs taken care of,
 members has been good; many of them have expressed how             as we have 19 branches across the Silicon Valley, the Greater
 they enjoy the ease of the process.”                               Bay Area and Tucson, Arizona.”
                                                                         While Meriwest is providing the necessary tools for those
 Planning for the Future                                            who prefer to operate online exclusively, the credit union has
  As Cortez and other Meriwest executives enjoy the benefits        no plans to encourage exclusive online interaction, and Cor-
 of attracting members online, they continue to plan to add         tez does not foresee utilizing fewer in-branch personnel as a
 more online options in the near future. Currently, aside from      result of increased online activity. “The whole credit union
 the new member acquisition tools, the CU’s online options          spirit is that of people helping people, of having contact with
 for members are fairly standard, “mostly checking, savings,        each other,” he says. “We’ll always have people available for
 certificates, money markets, mostly deposit products,” Cortez      members; this is just another channel to make it convenient
 says. “And members can also complete online loan applica-          for people to use our services.”
 tions.”
       Before long, the CU plans to offer more robust offerings
 for current members as well as non-members who are inter-          growing Members offline
 ested in joining. “We’re developing phase two of our online        While Meriwest Credit Union is experiencing success in mem-
 banking presence now,” Cortez says. “[The new services]            bership growth by acquiring new members online, the CU
 will allow existing members to go in and actually fund their       continues to build membership through more traditional
 accounts; they can determine how much they want to put in to       channels as well. According to Meriwest’s vice president of
 an account and where they want [the money] to come from.           marketing Tony Cortez, the CU holds at least two or three
 We’ll have the ability for existing members to do all of these     major promotions for new members each year.
 things with their existing accounts, not just new members               For instance, Meriwest recently completed its $25
 who are opening new accounts.”                                     checking promotion, which offers a free $25 deposit for new
       In fact, online member acquisition is a first step in what   members who open a checking account during a set time-
 promises to be a long walk in online territory for Meriwest.       frame. With the most recent promotion, the CU added 225
 “This is really just a beginning for us,” Cortez says. “We will    new members during the one-month timeframe.
 soon launch a more robust product selection and funding                 Meriwest also occasionally runs a promotion that of-
 engine for our existing online members, allowing them to           fers a certificate of deposit at a high interest rate for new
 open additional products from their homes or work and fund         members only. The high-rate introduction program offers
 them (those products) online at a time [that is] convenient        new members a 7.5-percent share certificate for a one-year
 to them. Having accessibility to a physical location is no lon-    term, with “a minimum investment of $1,000 and a maximum
 ger a need. The program is convenient and green. It’s totally      investment of $1,000,” Cortez says. On average, the promo-
 paperless, and there is no need to drive to a branch to open       tion runs for about six weeks, and during the final quarter of
 an account.”                                                       2007, the promotion attracted about 500 new members to
       There may be a contingent of people who prefer to con-       the credit union throughout its six-week run.
 duct all business online and never interact with representa-
 tives of their financial institutions, but Cortez believes that    Nancy	Mann	Jackson	is	a	freelance	writer	who	writes	fre-
 preference is a rarity. “There is a group of people who are        quently	about	business	and	travel.	Reach	her	at	nancy@
 online only, and if that’s the case, they could do everything      writshoponline.com.


www.CUBizMag.com                                                                           June 2008    Credit Union BUSINESS      39
 >> MORTGAGE MATTERS



     Gold in Alaska!
     Correspondent Lending
     Despite the negative portrayal of mortgage lending in the media, there are still good loans to be
     made. Just ask Alaska USA Federal Credit Union. The CU’s recent addition as a correspondent
     lender to the Freddie Mac/CUNA Alliance is helping Alaska USA make up for the soft market..
     By Joanne S. Liu




     I
                n June 2007, the Freddie Mac/CUNA Al-
                liance announced the addition of Alaska
                USA Federal Credit Union as a correspon-
                dent lender. Touted as a means to open
                up ways for credit unions to become
     more competitive in the loan origination stage,
     the correspondent lending program hands credit
     unions the ability to offer additional mortgage op-
     tions without expanding their mortgage produc-
     tion resources. Alaska USA staff eliminates the
     need to expand resources and to hire additional
     employees by providing a sufficient network of
     support to carry members through the entire loan
     process, to manage daily business activities and to
     communicate new opportunities. The correspon-
     dent lender advocates a seamless loan process
     experience, which makes it easy for members to
     apply for a mortgage loan. This lending easement
     includes the option of applying online through the              that participation in a correspondent lending relationship
     credit union’s own Website.                                     can assist a mortgage lender that is hoping to make up for the
           Illiana Ghanem, vice president for community lending      soft market. Bob Cejka, Alaska USA’s senior vice president of
     at Freddie Mac, has indicated that the correspondent lending    mortgage sales, comments on the current conditions, saying,
     program underscores her organization’s longstanding com-        “Despite the negative portrayal of mortgage lending in the
     mitment to credit unions and their members. Now, one year       media, there are still good loans to be made.” According to
     later, plans to reintroduce the program are underway, with      him, his credit union’s correspondent lending program can
     the intention of a relaunching this month. As the real estate   secure a better rate for participating credit unions than they
     market continues to experience turmoil, some have suggested     could otherwise offer, especially after program adjustments.


40      Credit Union BUSINESS June 2008                                                                         www.CUBizMag.com
      ow more than ever, you need a mortgage provider with performance you can count on. With
      more than three times the required capital to fund our own loans, CU Members Mortgage is
five-star rated by BauerFinancial. Plus, we’re one of only 15 mortgage companies in the entire nation
to receive the Freddie Mac Hall of Fame Award for retained servicing – four years in a row. Add the
ability to customize your level of participation, co-branding options, and the industry’s foremost
online application, and you get a strong, flexible mortgage partner with hundreds of loan programs
for your members. You’ll be impressed at what we can do for your credit union or cuso.
 >> MORTGAGE MATTERS

 “As with virtually all lenders, we had to adjust lending param-
 eters for new regulations surrounding credit scores and cer-
 tain loan-to-values,” he explains. “But overall, our portfolio
 of products is just as strong and diverse as ever.”
       Alaska USA is one of the nation’s largest and most di-
 versified credit unions. It operates 65 branch and subsidiary
 locations, carries over $2.8 billion in assets and numbers
 more than 315,000 members worldwide. It was the first in
 the nation to close a 30-year mortgage loan that was legally
 originated by a federally chartered credit union and has been



           Is correspondent
          lending an option?
 an approved seller and servicer for Freddie Mac and Fannie
 Mae for 30 years. Since the mid-1990s, the credit union has
 provided correspondent mortgage lending services to other
 joint-venture retail mortgage companies.

 Participating in Correspondent Lending
 A correspondent lender must meet strict legal and fiscal re-           In describing the benefits to a participating credit union,
 quirements. Moreover, it usually holds a strong foothold in       Cejka explains, “Correspondent mortgage lending services
 the community; retains a compliance, auditing and training        from Alaska USA are designed so that credit unions can re-
 department; and exhibits zero tolerance toward predatory          spond to member demand for mortgage services without
 lending. The lender ultimately makes the loan decision and        adding internal production resources.” Participating credit
 funds the loan with its own money or credit line. As soon as      unions gain the services of “a high-quality, low-cost, revenue-
 the mortgage loan closes, however, the lender sells the loan      generating resource” without requiring members to go else-
 to another lender at a previously negotiated price.               where for mortgages. This advantage allows the credit union
      Alaska USA’s original thought behind the correspondent       to retain and strengthen its relationship with members and
 lending program was to leverage its current capabilities and      enables members to move in to new homes with the help of
 extensive experience in mortgage lending. “Together with          a loan from the very credit union they’ve always trusted and
 Freddie Mac and CUNA, Alaska USA can help credit unions           relied on.
 offer mortgage lending services and both retain and further             The cost of participating in the correspondent lending
 expand member bases,” says Cejka. “We have extensive expe-        program varies, but it is typically based on volume and CUNA
 rience, so credit unions can be assured that Alaska USA will      membership status. Alaska USA offers discounts on startup
 deliver the same level of service to which their members are      fees and maintenance to those credit unions that are CUNA
 accustomed.”


4   Credit Union BUSINESS June 2008                                                                            www.CUBizMag.com
                                                                                      >> MORTGAGE MATTERS

 members. Comments Cejka, “The standard startup fees total
 $1,500 and monthly maintenance is around $100.”
                                                                         “...There are still good
 People Are talking
 Already, Alaska USA has received quite a few calls from inter-
                                                                           loans to be made.”
 ested credit unions all over the nation. Cejka suggests that the
 interest stems from the program’s simplicity and turnkey op-
                                                                                -Bob Cejka
 eration. Many credit unions, he explains, do not currently of-
 fer mortgage products to members. That is because of those         in their program allows credit unions to offer a broad range
 products’ inability to build the volume that is necessary to       of products that are sure to meet the needs of members, Ce-
 offer competitive pricing and diverse product options without      jka further claims. One requirement of Alaska USA, however,
 having to incur the expense of full-scale mortgage operations.     is that its services must be marketed directly to credit union
 This difficulty is where he believes his credit union can step     members, although achieving this requirement is simple
 in and offer a helping hand. “With services from Alaska USA,       enough. Credit unions need only direct members to the on-
 credit unions enjoy minimal startup costs and maintenance,         line application Website, provide a link from their existing
 seamless technology, diverse product options and expert sup-       Website or advertise the Website.
 port – all in a revenue-generating product that strengthens        All such mortgages originate through the online application
 the existing membership relationship.” Cejka says that even        portal, which is branded with the look and feel of the cor-
 credit unions with existing origination programs can benefit       respondent’s choice. Alaska USA makes the portal available
 from the program. The correspondent lending program al-            twenty-four hours a day, seven days a week so that members
 lows credit union members with a variety of mortgage needs         may apply for a mortgage and research their options from
 to access products that are fitted to their individual needs,      the comfort of their own homes. Members who require more
 regardless of whether their members seek to refinance, take        hands-on assistance have the option of going to a branch and
 equity out of a home or finance a first home purchase.             receiving help from member service representatives. Once
                                                                    submitted, applications are instantly transmitted for loan pro-
 Advantages                                                         cessing. Adds Cejka, “Credit unions can monitor their lending
 The correspondent program offers core products, includ-            success through the login area from Alaska USA’s main cor-
 ing the conventional fixed-rate mortgages and hybrid ARMs,         respondent lending Website.”
 as well as affordable options such as Freddie Mac’s Home                Evaluating whether a correspondent lending relationship
 Possible Mortgage and 40-year terms. Borrowers requiring           – such as the one offered through the Freddie Mac/CUNA
 expanded eligibility options can also explore the program’s        alliance – is appropriate for a credit union remains worthy
 A-minus products. The benefits to participating credit unions,     of exploration in current market conditions. As competition
 says Cejka, are clear. “In addition, credit unions that current-   for mortgage loans increases in the diminished loan mar-
 ly have mortgage lending functions can significantly reduce        ket, credit unions may find that correspondent lending helps
 their cost of operations by using Alaska USA’s correspondent       maintain loan volumes while easing the costs of origination.
 program to support their originations program.”
       In particular, Cejka points to the program’s turnkey op- Joanne	S.	Liu,	a	former	real	estate	attorney,	covers	legal,	
 eration. “Everything is provided to credit unions, from loan historical	 and	 business	 topics	 for	 a	 variety	 of	 publica-
 origination to shipping the loan to the investor.” Participation tions.	Learn	more	about	her	at	www.JoanneLiu.com.



www.CUBizMag.com                                                                           June 2008    Credit Union BUSINESS     43
                                       ECT   ION
                          L   IT IES S                                                             >> COVER STORY
                 FA C I
     SP   E CIAL




 Facilities: Designing
    For Success
   Credit union branches are adopting more than a new look these days – they’re adopting a
 whole new attitude with their designs. Today’s credit unions are taking an eclectic design ap-
 proach by blending modern touches with traditional elaborate façades. These days, the credit
    union is more than meets the eye; it’s all about the total customer relationship package.
                                                     By Julie Sturgeon




 D
                   espite the Internet’s hefty presence, the        July 2008, and Nutmeg State Federal Credit Union dazzles
                   brick-and-mortar branch is far from dead.        members in Glastonbury, Conn., with a 4,040-square-foot
                   However, traditional design ideas for these      one-story branch featuring the expected red-gold brick and
                   buildings are quickly headed six feet under.     columned entrance. But the design still incorporates modern
                   When First Community Credit Union in St.         touches like a point-to-point pneumatic delivery system and
 Louis, Mo., opened in March 2007, its 3,500-square-foot            an ATM with dual-level lighting to reduce light pollution.
 steel and brick structure boasted synthetic plaster with split-         Two totally different looks, yet each just as cutting edge
 faced concrete block below the windows that was unlike your        in today’s credit union design trends, architects insist. That’s
                                               ordinary brick       because “it’s about the relationship, and how you connect
                                               structures. Mem-     with your customer,” says William Bily, vice president of de-
                                               bers enjoy four      sign at Cincinnati, Ohio-based DEI Corp.
                                               drive-up lanes
                                               and a separate
                                               drive-thru ATM.
                                               The raised lobby
                                                                          CUs are adopting a
                                               features cleresto-        new attitude in design.
                                               ry glazing, high
                                               ceiling spaces,
                                               a circular motif     Certainly, “trend” doesn’t translate to quick in this industry.
                                               and stone floor-     That’s because corporations don’t budget to build facilities as
                                               ing patterns.        quickly as folks change their fashion wardrobes. “The trends
 John	Hyche	is	Principal,	Strategic	Consulting  Fast     forward    we are seeing include a desire to be more unique,” says John
 of	LEVEL5.                                    18 months to         Hyche, principal and strategic consultant at Level 5 architec-

44    Credit Union BUSINESS June 2008                                                                            www.CUBizMag.com
                                                                                     >> COVER STORY | FACILITIES




    CBI firm. “Here in the 1
 tural Ad outlines_CU Business Mag 1 Atlanta, (Ga.), area, you can’t swing                                                   4/30/2008 10:42:58 AM

 a dead cat and not hit a red brick bank with four columns
 and a wide roof. So one of our trends is to get away from that
                                                                                 An inviting environment
 painfully traditional look.”                                                          that sells…
       But remember, looks aren’t the sole component of to-
 day’s design. “The building is a very expensive piece of equip-
 ment so you have to get the core building to function properly              corporate talk to say that branches must offer an eye-catching
 and well,” says David Jaeckels, executive vice president and                appeal while still being secure.)
 chief operating officer at BCI in Milwaukee, Wisc. “But then,                    Architects praise credit unions across the country with tak-
 what things do you do inside? Does it show the credit union’s               ing the lead in this attitude, which puts many branches ahead
 attitude and branding in the design? All these [aspects] pieced             of their community bank counterparts in the consumer-cen-
 together make it relevant to the market segment.”                           tric competition. For starters, the credit union structure lends
       Tom Lombardo puts it even more bluntly. “Someone                      itself to more flagship branches rather than multiple locations.
 who is going to buy land and build a unit expects a return                  More importantly, executives in this industry simply get how
 on investment,” says this director of business development                  to create an inviting environment that sells. “A lot of credit
 for Clayco real estate and development firm. Clayco is a St.                unions really go over and beyond in educating that member
 Louis, Mo., firm that is responsible for both First Community               on the services they offer. A bank tends to be a little slower
 and Nutmeg State credit unions. “We want to give them the                   – still traditional designs, traditional teller lines, traditional
 best product on the marketplace today.” (That’s construction                president’s office in the corner,” says Consultants and Build-

www.CUBizMag.com                                                                                     June 2008    Credit Union BUSINESS              45
                                           ECT      ION
                              L   IT IES S                                                                  >> COVER STORY
                 FA C I
     SP   E CIAL

     ers Inc.’s president, Tyler Williams. By contrast, “the credit
     union is the talk of the town.” How are the trendsetters doing it?
                                                                                    Glass plays perhaps
     First Impressions
     Breaking out of the mold isn’t as easy as it may sound. Just                   the most important
     ask Christy Merdinian, who, as an architect with ACM Design
     Group in St. Louis, Mo., has sat down at the conference table                     look of all….
     with many financial institution VIPs to design their new digs.
           “They want to get a little more trendy, make a statement,”
     she says judiciously. But that lofty goal isn’t guaranteed, es-             Even when his clients insist on the more familiar banking
     pecially as this industry tends to focus on the interior at the        look, Bily often finds ways to jazz that preference up. He does
     expense of the exterior, her colleagues agree. “There is a lot         so by adding contemporary retail elements to the front of a
     of function that needs to be considered here. It’s not just a          brick wrap building with a pitched roof.
     corporate environment – it’s also a very public environment,”               Glass plays perhaps the most important look of all in
     she explains of the gap.                                               freshening a credit union’s face to the world. The 2008
           But certainly, credit unions are making strides in their         definition of contemporary involves bringing in lots of nat-
     outward appearances, with many successfully shedding the               ural light to complement open spaces – and consequently
     staid approach to design. Williams describes the exteriors             gives outsiders a view of the excitement inside. It’s (glass)
     he’s done lately as transitional or contemporary. “A lot of my         a wonderful sales tool, designers say. It’s a subtle crime
     credit unions were a little nervous about going in a different         prevention move, too, security experts assure. “We look at
     or wrong direction,” he admits. “Now they are willing and              ways of opening up views toward the lobby so it’s less ap-
     able to go out there and make a presence architecturally.”             pealing to robbers because they can’t act concealed. Any-
           He’s talking sharper angles, a lot more signage – much           body can look in that front window and see what’s going on
     of it digital, as “motion is everything” in his assessment – and       inside the branch,” notes Jaeckels.
     detached drive-up windows that feature audio and video ca-
     pabilities and a lot tube system. From a practical standpoint,         Dialogue Banking
                                                      such a design lay-    If the outsides are slowly being tweaked, most credit union
                                                      out separates the     facilities have seen drastic changes on their interiors over this
                                                      vehicle     traffic   past decade. It’s not rocket science – bank customers per-
                                                      from foot traffic     form 100 million self-service transactions every day, accord-
                                                      to the building       ing to TowerGroup. The Needham, Mass.-based research and
                                                      and invites better    consulting firm predicts that by 2010, retail-banking custom-
                                                      entry back to the     ers in the United States will conduct nearly $60 billion self-
                                                      public streets.       service transactions annually – a 50 percent increase over the
                                                      Not to mention        volume it forecasted for 2006.
                                                      officers can de-            So sooner or later someone – in this case, Washing-
                                                      preciate the two      ton Mutual – was bound to kick its teller line to the curb
                                                      buildings sepa-       in favor of a branch full of machines. Financial institutions
                                                      rately for a tax      alternatively call these stations teller pods or dialogue kiosks.
     Mike	Colvin	is	Principal,	Senior	Vice	President	 benefit.
     of	LEVEL5.


46      Credit Union BUSINESS June 2008                                                                                  www.CUBizMag.com
                                                                             >> COVER STORY | FACILITIES


                                                                                                        Other credit unions take an
                                                                                                    even more George Jetson ap-
                                                                                                    proach, asking members to in-
                                                                                                    teract with their teller at a video
                                                                                                    screen while the real person
                                                                                                    handles the transaction from a
                                                                                                    separate room in the back. Either
                                                                                                    way, money changes hands via a
                                                                                                    pneumatic point-to-point system
                                                                                                    (think drive-up tubes) that is
                                                                                                    stored inside a system rated as a
                                                                                                    vault. And both scenarios eschew
                                                                                                    folks who are walking from one
                                                                                                    side of the branch to the other
                                                                                                    clutching thousands of dollars in
                                                                                                    their hands.
                                                                                                            The result is, ironically, a
                                                                                                    very open, airy feeling that so far
                                                                                                    has attracted customers like bees
                                                                                                    to honey, according to CBI’s Wil-
 Regardless of the name bestowed upon them, however, they                                           liams. “I had a president tell me
 are basically a collection of ATM-like centers for members          he thought the Internet, with its ability to educate members
 to conduct transactions. And just as grocers place milk and         about our services, would cut down on their lobby traffic. It
 bread in the back of their stores to force consumers to stroll      has actually increased it. That’s good news for a builder,” he
 their aisles, credit unions almost always place their dialogue      says.
 kiosks as far from the front door as possible.                           Unfortunately, these dialogue kiosks can confuse a first-
      Of course, this strategic placement doesn’t mean the           time visitor, which is why many credit unions opt to place a
 member can waltz in and out unattended. Savvy credit unions         greeter stand (millwork counter or simple stool – the choice
 station representatives in this area to serve as member hosts.      depends on the credit union’s image) near the entrance. In
 “The biggest benefit is that it (representative hosting) en-        that way, they can better start the adventure with a human
 courages relationship building as opposed to just transac-          smile and instructions. Fortunately, these dialogue kiosks can
 tions,” says Bily. For one thing, the assistant formerly known      confuse would-be robbers as well, and looking a greeter in
 as a teller suddenly isn’t limited by a wall and bullet-resistant   the eye is the last thing a thief wants to fuss with.
 glass. She is free to walk over to a member and welcome him              “It’s psychological,” Bily admits. “Right now, there is
 to the credit union. On the other hand, as Bily points out, this    such an unfamiliarity with dialogue banking, if someone were
 means the staffers you hire to handle dialogue banking need         to come in to case out a branch, they wouldn’t know where
 to be comfortable steering chats into chances to cross-sell.        to start. How do you rob a machine?” Not to mention, the
      “It’s all about deepening the amount of wallet you’re get-     open atmosphere means potential robbers can’t get by with
 ting from that member by providing a pleasant experience,”          a concealed weapon and a one-on-one threat. They must be
 says Mike Colvin, senior vice president at Level 5.


www.CUBizMag.com                                                                             June 2008    Credit Union BUSINESS        47
                                         ECT    ION
                            L   IT IES S                                                             >> COVER STORY
                 FA C I
     SP   E CIAL

                                                                                                                ever; Arizona has a
                                                                                                                concealed weapon
                                                                                                                law that would mean
                                                                                                                the doors could lock
                                                                                                                out legitimate mem-
                                                                                                                bers hourly. And if
                                                                                                                your audience in-
                                                                                                                volves law officials,
                                                                                                                it’s probably not a
                                                                                                                wise business move
                                                                                                                to hinder their wel-
                                                                                                                come.

                                                                                                                Retail Razzle
                                                                                                                Dazzle
                                                                                                                  Communicating a
                                                                                                                  brand image isn’t
                                                                                                                  difficult to grasp –
                                                                                                                  wander through any
                                                                                                                  mall in this country
     willing to take on the entire branch. Accessing the secured       and specialty retailers like Abercrombie and Fitch will give
     room where staffers handle the transactions presents two          you a great education on the spot. The retailer’s atmosphere
     problems: These areas require biometrics or special ID cards      projects a different feel and shopping experience than the
     to activate the doors, and just where is this room anyhow?        Gap, which in turn puts out different vibes than American Ea-
          Eventually, someone will try to gain unauthorized access,    gle does. These retailers know what makes their demograph-
     however, and again, the space layout is prepared. Most of the     ic segment tick, and they play to that enticement shamelessly.
     cash dispensing units can shift into a theft mode, releasing      That’s exactly how credit unions need to approach their inte-
     one small bill every 30 seconds while anyone can watch. “If       riors, says Bily.
     they (thieves) have a gun, they can get what they want, but            Take, for instance, the Delta Community Credit Union in
     are they willing to spend three to five minutes trying to do      Atlanta, Ga., whose roots with the famous airline of the same
     that?” Williams asks. To rub salt in the wound, the back-of-      name screamed opportunity. Officials there asked Level 5 to
     the-room location means the robber has to jog around more         develop an airport terminal feel for one of its branches, com-
     obstacles to get to the door and go by more hidden cameras        plete with bright colors and that “duck in here and buy a
     he can’t deactivate in the bargain.                               pack of gum” store feel. As a result, the CU won a first place
          Vestibules aren’t just for looks these days either. They     Diamond Award for retail branch merchandising for credit
     now serve a practical role as credit unions install what is       unions with assets over $1 billion from CUNA’s Marketing &
     known as a mantrap – an airlock system that seals the second      Business Development Council in 2007.
     set of doors should it detect someone is carrying a knife or           “The designs are all about the member experience, what
     gun. Not all of Jaeckels’ clients can entertain this idea, how-   makes the member feel good. How the facility delivers the



48      Credit Union BUSINESS June 2008                                                                           www.CUBizMag.com
                                                                            >> COVER STORY | FACILITIES

                                                                                                                    One of the most
                                                                                                             popular ways credit
                                                                                                             unions stake their
                                                                                                             claim: a children’s
                                                                                                             activity area. It only
                                                                                                             makes sense to Bily,
                                                                                                             who has seen the in-
                                                                                                             crease of families who
                                                                                                             run weekend errands
                                                                                                             with their kids. “Both
                                                                                                             parents work, they
                                                                                                             don’t see them (their
                                                                                                             children) all week,
                                                                                                             and they don’t want
                                                                                                             to pawn them off on
                                                                                                             someone to go apply
                                                                                                             for a loan,” he notes.
                                                                                                             “There’s no better way
                                                                                                             to touch a consumer,
                                                                                                             especially a mom, than
 service, and how attractive it is to the member, which creates     to have a secure play area right next to the loan area so she
 an attitude or mindset of ‘this is where I want to be,’” says      can keep an eye on things.”
 Colvin.                                                                 He’s preaching to the choir with Hyche. “I know my wife
      It’s also a mistake to latch on to one prototype design and   has a very short fuse if she’s somewhere and the kids are
 force it to fit all locations, says Kevin Blair, the CEO of New-   running amuck. Suddenly, her attention is not on what she’s
 Ground, another St. Louis, Mo., design firm. Where a branch        there to do; it’s on getting the kids to behave,” he shares.
 in an urban market or strip mall may be better using fewer              Thanks to Starbuck’s far-reaching influence on America’s
 cross-trained employees and a host of technology enablers          beverage habits, coffee bars, with their subtle invitation to
 like dialogue kiosks, a more established market could still        hang out, are another de rigueur addition. Hyche also likes
 benefit from yesterday’s teller-line layout. “Adjust your retail   to work what he calls a member business area into his credit
 platform and delivery based on segmentation analysis,” he          union floor plans. All it takes is a copy fax machine, a com-
 suggests.                                                          puter connected to the Internet, a cozy chair and a table –
      Keep in mind, too, that “experience” in this context          something a little more upscale than a counter – to endorse
 doesn’t translate to a thrill ride at an amusement park. Rath-     a check. One credit union reported that a homeowner began
 er, it equates to a very positive event, Hyche adds.               using this type of space to meet with a local contractor and
      “That means if I have to wait, I have a comfortable area      go over new house construction possibilities. And because
 where my mind is engaged, watching the stock ticker or read-       the two parties were sitting in a credit union, that financial
 ing today’s newspaper, not “People” magazine from two years        institution landed the family’s mortgage business.
 ago,” he explains. Some innovative thinkers are incorporat-              Hyche chalks it up to the fact the branch’s design wasn’t
 ing libraries in to the branches to assist members.                foreboding and stodgy. “We created the right sort of envi-


www.CUBizMag.com                                                                          June 2008    Credit Union BUSINESS      49
                                       ECT   ION
                          L   IT IES S                                                             >> COVER STORY
                 FA C I
     SP   E CIAL

                                                                                                          That’s exactly what South
                                                                                                   Carolina Credit Union did to
                                                                                                   keep its employees happy. It
                                                                                                   spent substantial dollars creat-
                                                                                                   ing a private lounge with game
                                                                                                   machines, exercise equipment
                                                                                                   and plasma-screen televisions.
                                                                                                  The CU also has walking paths to
                                                                                                  promote lunchtime getaways and
                                                                                                  an outside view from every office.
                                                                                                  According to Williams, the credit
                                                                                                  union’s employee retention rate
                                                                                                  is enviable.
                                                                                                  “The first question a successful
                                                                                                  credit union asks is how many
                                                                                                  things can we do with the build-
                                                                                                  ing? Then it’s how many more
                                                                                                  things can we do with marketing?
                                                                                                  The final question is what else
 ronment where people are comfortable doing business, and can we do with our interaction with members to make sure
 that’s worth underlining,” he says.                                they understand our products and services? That’s the com-
       Keep in mind, however, that bringing Internet connec- plete design circle,” Jaeckels sums up.
 tions to the public also involves security risks that need to be
 addressed, warns Connie Lyle, vice president of design at KDA How to sabotage Your Best Facility
 Holdings in Marietta, Ga. Many of her clients say they’re still Design efforts
 leery of the hacking opportunities a wireless presence could On May 3, 2006, the Department of Veterans Affairs found
 present inside a financial institution. At the very least, be sure itself in the center of a media firestorm when 26.5 million of
 the physical equipment is locked down – the CPU stored in a its records were compromised after a burglary at a computer
 locked cabinet with air circulation and the keyboard fastened analyst’s home. The crooks made off with the analyst’s laptop
 to the counter. “And position the computer center within and external drive.
 sight of the greeter so someone has an eye on it,” she adds.             By that June, it was the Internal Revenue Service’s turn
                                                                    to step forward and take a lashing when an employee lost
 Private eyes                                                       track of a laptop en route to an agency event – and suddenly
 Sure, scrapping the teller lines and sending those workers fingerprints, names, dates of birth and Social Security num-
 upstairs, or at least out of sight, automatically frees up more bers for 291 individuals were loose somewhere in the public
 square footage to devote to retail space for the public. But domain.
 don’t be greedy, architects advise. Set aside some of this foot-        Even as credit unions brush up on the latest cyber secu-
 print for your employees.                                          rity technology to protect precious data, they are vulnerable
                                                                    to making the same headlines. “We’ve never done a facility



50    Credit Union BUSINESS June 2008                                                                            www.CUBizMag.com
                                       ECT    ION
                          L   IT IES S                                                              >> COVER STORY
                 FA C I
     SP   E CIAL

 where we weren’t able to compromise one or more branch-             that doesn’t have a separate closet or small room with a lock
 es,” says Jim Stickley, the chief technology officer at Trace       on it to store phone wires and data racks. When an electri-
 Security in Baton Rouge, La., whose job includes offering           cian comes in, he can only access that specific panel room
 “social engineering” analysis to financial institutions. In plain   – ditto the phone representative.
 English, that means he finds ways to swipe data right out from           Still, Seale rates his ability to acquire sensitive data as sim-
 under the noses of your hardworking employees.                      ple. He’s spotted personal information on a screen when the
      “What we are seeing typically in the market is that data       teller walked away for another task. He’s seen maintenance
 theft is much easier to get than monetary theft,” reports Kirt      closets standing wide open, offering keys to every lock in the
 Seale, senior manager of Dallas, Texas-based Grant Thornton         building to the first grabber. Of course, many people fail to
 LLP’s business advisory services division. Like Stickley, his       lock filing cabinets, and still loan officers leave the room with
 job is to sniff out physical chinks in a credit union’s protec-     an applicant sitting right there.
 tion. The recent trend explains why Stickley is now seeing a              KDA Holdings has gotten away from lay-in ceiling tiles
 rise in this side of his business.                                  in favor of drywall tight ceilings and taking walls to the deck.
      “Firewalls are good these days. IDS [Intrusion-detection       Loo maintains this altered design concept can keep some-
 systems] work very well. Antivirus software is great. Secu-         one from hiding literally above your head by crawling up into
 rity from a network standpoint has gone leaps and bounds            the ceiling cavity. Yet one of the bigger vulnerabilities Seale
 ahead, and suddenly physical security is the weaker, easier         has noted undoes all this preventative construction: public
 place to attack,” he notes.                                         restrooms that adjoin a working area. Customers slip in and
      Stickley rarely need do more than don a uniform in or-         then fail to emerge until after hours when they can roam the
 der to gain access to a financial institution’s deepest, dark-      computer heaven alone.
 est secrets. He introduces himself to a teller as a fire inspec-          True, the average credit union branch rarely faces thieves
 tor, an air-conditioning repairman, a pest control specialist       of this caliber, but such tests point out glaring red flags in de-
 and even an OSHA official – each week, he brainstorms dif-          sign structure and policies. “My concern is that people could
 ferent scenarios. Most of the time, the employee waves him          be in the bank offices for legitimate reasons but maybe they
 through to the back offices and returns to the counter.             aren’t the most upstanding of citizens,” says Stickley. “He may
      “When they don’t escort us, we own the place within half       be a repairman but you have no idea if he’s strapped for cash
 an hour,” Stickley says. “We will steal anything that is not        or has a buddy who offered to buy records.
 bolted down.” The holy grail, of course, is the back-up tapes             “We take it (security) to this level because we have to.
 – an item the sleuth says he targets hard because less than         But data theft isn’t always because someone targeted you
 one percent of all financial institutions across the country en-    specifically – it’s because you were an easy target,” Stickley
 crypt such data. He snags this prize, gaining access to every       warns. How easy? Even dressed in a suit, he manages to rum-
 piece of information on the company’s entire customer base,         mage through each of his client’s dumpsters in broad daylight
 on nearly every attempt.                                            and pull out useful information that was not shredded.
      While inside a branch, he has also succeeded in install-
 ing wireless devices on the bank’s network. These devices           Julie	 Sturgeon	 is	 an	 Indianapolis,	 Ind.-based	 journalist	
 then enable him to hack away at the computer system from a          who	has	covered	business	and	trade	for	20	years.
 laptop in a van in the parking lot.
      These days, Tommy Loo, manager of operations consult-
 ing at KDA Holdings in Marietta, Ga., rarely builds a branch


5    Credit Union BUSINESS June 2008                                                                                www.CUBizMag.com
                 Wouldn’t a little direction be nice?




                     Cincinnati, OH        513.825.5800            www.dei-corp.com



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and making all the right decisions along the way. At DEI, our Strategic Planning Study is your
roadmap for a 10-year planning period, creating the roadmap for your institution’s future success and
growth. Yes, a little direction is nice.
 >> HR ROUNDUP



 Got Energy?
 Advice for Execs
 Did you know that long-term success in high-stress situations is directly related to a regularly
 repeated, disciplined balance between energy expenditure and energy renewal? Work/life
 balance is particularly important for credit union executives who have no “off season.”
 Discover how to infuse energy renewal throughout your CU. By Catherine Collins




     H
                     R professionals, particularly benefits folk, are   does not necessarily mean we are following them. Since the
                     not known for their lively training seminars.      1980s, we, as Americans, have been working increasingly
                     In fact, as an attendee, you are much more         more hours per week and more weeks per year than any oth-
                     likely to hear a pin drop than a motivational      er developed country. We are overweight, stressed and often
                     presentation that renews your faith in your        estranged from our family and friends. And even if you are
     chosen career. I expect this and am therefore surprised and        part of the small group of people who have figured out a way
     a little annoyed when, as a member of the audience, I am
     asked to participate.
           At a recent training, after the introduction, everyone in
     the audience was asked to stand. The presenter then reviewed
                                                                                A balance between
     the four most important, most obvious and most common                      energy expenditure
     factors for good health: no smoking; eating fruits and veg-
     gies; engaging in regular exercise and maintaining a healthy                  and renewal
     weight. Approximately 200 high-level HR managers nodded,
     wondering why we had to stand up to agree. Noting the grow-
     ing unrest, the presenter then said that anyone who compliedto live the dream, you will not be able to escape the profound
                                                                 effects those out-of-shape, unhappy co-workers will have on
     with all four could sit down. That is when it got interesting.
           As I began to take my seat, I noticed two things. First,
                                                                 your life.
     only about a dozen or so others were doing the same. And          For decades, Dr. Jim Loehr and Dr. Jack Groppel,
                                                                 co-founders of the Human Performance Institute, have re-
     second, I was getting what seemed to be the evil eye from the
     people around me.                                           searched, defined and developed science-based training for
            Did I mention the training was about creating wellness
                                                                 executives. Loehr and Tony Schwartz co-authored the famous
     and work/life balance programs?                             “Harvard Business Review” article “The Making of a Corpo-
                                                                 rate Athlete.” Based on fundamental sports training concepts,
     Baby steps                                                  they assert that long-term success in high-stress situations is
     Work/life balance principles consist of nothing you do not directly related to a regularly repeated, disciplined balance
     already know. However, as was evident in the training, that between energy expenditure and energy renewal. This bal-


54      Credit Union BUSINESS June 2008                                                                           www.CUBizMag.com
                                                                                                  >> HR ROUNDUP


 ance is particularly important for executives who, unlike ath- me with wonder – a telling sign of the pervasive nature of the
                                                                challenges we face when developing healthy work styles.
 letes, do not practice regularly, do not compete all of the time
 and have little or no off season!                              Nine-to-five is history. We are in a different time. Baby Boom-
        HR offices are beginning to get the executive and finan-ers are leaving their careers in huge numbers, but they are
 cial support to implement basic work/life balance programs     not completely retiring. They are returning to the workforce
 like flexible schedules. And new technologies are being read-  with massive skill sets, often seeking completely different
 ily adopted as a way to make the location for work flexible as jobs. What’s more, they are joining their children and every-
 well. Health care companies are even starting to acknowledge   one in between in a connected, virtual, expanding world. The
 the need to offer whole-person treatments, including mas-      diverse needs of this current and future workforce demand
 sage, homeopathic and chiropractic services at a discount.     responsive, effective benefits programs.
 Although these types of treatments are great tools to help sup-       The current work/life focus is rooted in the issues that
 port a healthier work style, they do not address the energy    sprang from needing to find child care in two-career families.
 renewal of which Loehr and Swartz spoke. To succeed, or-       Kathie Lingle, executive director of the nonprofit Alliance for
 ganizations, particularly the leadership, have to acknowledge  Work/Life Progress (AWLP), has been involved in the work/
 the need for work/life balance in their own lives. They must   life field for almost 20 years. Her early work at the Families
 also believe in the value of wellness programs and foster an   in Work Institute centered on who was going to take care of
 environment at C Level that supports these concepts.           the kids. It used to be that you had to sacrifice your home life
                                                                to achieve your professional and financial goals. We are now
 times Are Changing                                             realizing it is not a zero-sum game. With even more to do
 The looks I received in the training session were not encour- and more ways to get it done, balancing it all has become the
 aging or congratulatory. My peers, all interested in improving primary issue.
 work/life programs in their organizations, instead looked at Thus, the new HR paradigm revolves around the creative use
                                                                                         of paid and unpaid time off. Time is
                                                                                         the new currency, according to Lingle.
                                                                                         She points out that regardless of what
                                                                                         you do, there are only 168 hours in
                                                                                         the week. Executives, especially CEOs,
                                                                                         need time to think, create and respond.
                                                                                         As a result, it is particularly impor-
                                                                                         tant how they choose to spend those
                                                                                         hours. Lingle points to the importance
                                                                                         of Loehr and Swartz’s research, em-
                                                                                         phasizing the fact that leaders need
                                                                                         resilience training. Expenditure only is
                                                                                         counterproductive; it is just as impor-
                                                                                         tant to recharge. Understanding this
                                                                                         concept can shape everything from
                                                                                         policy to program to daily routines in
                                                                                         an organization.



www.CUBizMag.com                                                                         June 2008    Credit Union BUSINESS     55
 >> HR ROUNDUP


 What’s next?
 As the first of the Boomer children headed to work,
 their parents are witnessing the work world through
 the eyes of Gen Y. This generation would not even con-
 sider working for an organization that doesn’t under-
 stand its priorities. Lingle points out that Gen Y works
 hard and plays hard. Members of this generation are
 committed their social network, use technology for
 everything and expect their employer to understand
 their boundaries. Leaders who do not understand that
 work/life paradigms are shifting will not even realize
 that they are missing this important group of potential
 employees. And with the shortage of skilled workers
 – and the looming retirement of so many more – it
 will become even more crucial for organizations to
 attract and retain their talent.
       So what do you do? “Benefits and Compensation
 Solutions’ Outlook for 2008” highlights four trends
 in the dimensions of work/life. The key takeaways for              sages by the time she got back to her desk, each one asking
 executives include:                                                why she was in the stairwell with him. He laughed, but being
                                                                    the type of person who enjoys a challenge, he did it. When the
      • Understanding the expanding nature of diversity and         presenter returned to her office, she had a dozen messages.
        the need to create work environments that attract and       And within two weeks, everyone was taking the stairs.
        retain a variety of talent                                        People	are	watching	you, even if they are not leaving
      • Developing and supporting innovative programs that          you messages telling you so. And again, it is nothing you have
        address these needs                                         not heard before. But if I asked you to stand right now and
      • Acknowledging and facing, head on, the detrimental          said you could only sit down if you had exercised, eaten veg-
        effects of unhealthy work styles                            etables, taken five minutes to recharge outside or in some
      • Coming to grips with technology as both a                   way done something to exemplify healthy work habits, could
        productivity tool and a threat to work/life boundaries      you take a seat?

 eat Your Veggies!                                                  Catherine	 Collins	 is	 a	 senior	 professional	 in	 human	 re-
 At the end of the training session, the presenter shared a chal-   sources	with	an	MBA	and	over	10	years	of	personnel	and	
 lenge she had extended to one particularly powerful member         financial	management	experience.	She	is	the	founder	of	
 of her executive team. In short, one day she walked up the         2C	Communications,	a	business	writing	consultancy.	You	
 four flights of stairs to the C Suite with him, leaving him with   can	reach	her	by	email:	catherinelcollins@hotmail.com.
 this: If you walk up the stairs every day instead of taking the
 elevator, by the end of the month, everyone on this floor will
 be taking the stairs. She also bet she would have several mes-



56   Credit Union BUSINESS June 2008                                                                           www.CUBizMag.com
 >> RECRUITER’S CORNER



 Burned by the Fire Inspector!
 How to Protect CU Assets
 Having someone stroll in to your credit union and walk out with a stack of sensitive member
 information is much easier than you think. In spite of the most sophisticated IT setup, your
 CU’s assets are likely still at high risk. Learn why and how you can mitigate this often
 unsuspected problem. By Elaine Boyd
     Question: How easy would it be for someone to                        Enter Mr. Jim Stickley, pest exterminator, fire inspector,
     walk in to your credit union, and walk out with a A/C maintenance man, and credit union robber. He turns our
     foot-tall stack of sensitive member information?               vision of security on its head. “I’ve robbed over a thousand
                                                                    financial institutions.”
     Answer: Much, much easier than you think.                            Jim poses as people who would have a legitimate reason




     W
                                                                    to visit your credit union. Posing as an exterminator, for ex-
                        hen I say “member information security,” ample, he would set up an appointment with a branch man-
                        you automatically think of network secu- ager.
                        rity, SSL, encryption and firewalls, right?       “Just call and introduce yourself as a rep for a well-
                        Unfortunately, your sophisticated IT setup known extermination company and drop the CEO’s name.
                        won’t stop you from getting scammed in People think you’re legit. It’s easy. I show up for the appoint-
     your physical locations.                                       ment, dressed the part, and walk right in.”
          Do you think someone could waltz in to your physical            And how does it go from there? “Credit union people are
     location and waltz out with member information? It’s hap- so nice. They usually offer me coffee, explain the lay of the
     pening.                                                        land, and leave me alone. Then I rob them blind.”
                                                                          Jim has heisted stacks and stacks of loan files, proce-
                                                                    dures, even full system backup tapes. Ready for the kicker?
                                                                    He’s never been caught.
                                                                          “You’re thinking a thief is going to show up brandishing
                                                                    guns, not show up smiling and talking about his kids. When
                                                                    I get to the credit union, I just start talking about everything,
                                                                    kids, dogs, where I’ll eat lunch that day. No one is expecting
                                                                    a crook to do that.”

                                                                      Can It Happen to You?
                                                                      Looking for good numbers on how often financial institutions
                                                                      are compromised in this way? Good luck. Places that get


58      Credit Union BUSINESS June 2008                                                                           www.CUBizMag.com
                                                                                      >> RECRUITER’S CORNER




                                       When your ATM network
                                        doesn’t cooperate,
                                        give us a shot.




                                                                  gagement because we wanted to know what could be stolen
         They think the                                           and what could we do to mitigate that risk. That’s when we
                                                                  called Jim.”
     environment is secure.                                            He came in as a fire inspector and the front desk re-
                                                                  ceptionist let him right through. “It was amazing,” continued
                                                                  Frank. “We’d never addressed this type of threat, and there
 stung may not know it happened. If a backup tape goes miss-      were obvious holes that we have since plugged and fixed. A
 ing, people will assume it got lost or tossed or something.      number of policy changes came out of it.”
 They think the environment is secure, so no one imagines it            At Frank’s credit union, the imposter was turned loose
 was stolen.                                                      without an escort. “That doesn’t happen anymore. Everyone
        Credit unions are always surprised at how much of “the    has to wear visitor badges now. No one has free reign now.
 goods” Jim is able to walk away with. They contract with Jim’s   Everyone must check in and be accompanied.”
 company, TraceSecurity, to come in and put their staff to the         The old-school method of protecting your physical loca-
 test. It’s a big wake-up call when credit unions realize what    tion focuses on cash, checks and money orders. These days,
 easy targets they are.                                           member information is also a form of currency and must be
       Frank (fake name), who heads up the technology             seen like that. It’s a training issue, and the staff members who
 group at a $750-million credit union on the West Coast, went     get duped by a scammer are as surprised as the management
 through the exercise. “We did this ‘social engineering’ en-      team who arranged the episode.


www.CUBizMag.com                                                                         June 2008    Credit Union BUSINESS      59
 >> RECRUITER’S CORNER




      “The employees are totally blown away,” says Jim. A staff            And so where do these other get-ups come from? “Dick-
 meeting is typically set for the morning after the rip-off. Jim     ies from Wal-Mart work great for the exterminator,” confides
 the friendly robber, whom they usually remember from the            Jim, “and Home Depot is my best friend. Gadgets that make
 day before, stands in front of the room telling them what he        noise are the best. I just get something that makes noise,
 did, showing everything he’s taken.                                 wrap it in black duct tape, and it can pass for a Star Trek tri-
                                                                     corder. On site, I act like I’m using it to check for poisonous
 the Imposter                                                        gas or termites or whatever. Props are key. Props are what it
 So how difficult is it for someone to become an imposter? Jim       takes.”
 shares a few secrets. “The most successful uniform is the fire            Do people ever question Jim’s identity? “They always let
 inspector, because you can just show up and walk in. But we         me in. Some people are inherently suspicious, but not always.
 have to get authorization to do that, and there is so much red      If I pick up on their being suspicious, I just do the job without
 tape. It’s reeeeeally [sic] illegal to impersonate a fire inspec-   stealing anything. I give them a report and leave. You just do
 tor! Of course a real thief won’t care about that part, and         whatever it is you claim you’re doing and leave. I leave them
 he can find a fire inspector uniform exactly where real fire        with fake reports all the time. We give a preliminary ‘P.O.’
 inspectors and I get them, from the source.”                        and leave as little as possible of any record we were there.”
       The exterminator uniform is also effective but requires
 groundwork first. You have to set an appointment rather that
 just show up on the fly.

60   Credit Union BUSINESS June 2008                                                                              www.CUBizMag.com
  RDB-046_RetainerAd-ForPrint2:Layout 1                            4/7/08     9:41 AM      Page 1              >> RECRUITER’S CORNER




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                                                                            ivorced projects.
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 the thief                                                                                want to make sure any person attempting a swindle puts the
 But usually Jim is able to nab things. Credit unions are                                 same amount of effort into it that a real robber would. That’s
 shocked by the amount of stuff Jim can walk off with. What                               the only way you’ll really find vulnerabilities.
 credit unions forget is that even if their policies cover this                                  Jim seems to like this work. A lot. (Maybe too much?)
 type of situation, all it takes is one employee who hasn’t been                          I ask him if it’s kind of fun. “Well, your heart pounds. Every
 properly trained.                                                                        single time I walk in I get that little rush.”
      The main lesson here: It is about people and about train-                                 If you want to avoid someone getting a “rush” at your
 ing. You must educate your staff about escorting strangers, no                           expense, address these kinds of vulnerabilities with your
 matter how legitimate those individuals seem. The majority                               staff, and implement a check-in and escort policy. And keep
 of the time, the staff member wanders away. That’s the key                               a good, close eye on your backup tapes the next time your A/C
 to Jim’s ability to steal things, and that laxness goes back to                          maintenance guy swings by.
 training.
      Jim likes to point out that if a credit union is going to go                        Elaine	 Boyd	 is	 president	 and	 founder	 of	 CU	 Executives,	
 forward with a social engineering engagement, it is important                            Inc.,	 a	 recruiting	 organization	 specializing	 in	 credit	
 to be sure the vendor is putting effort into it. “No one will be                         unions.	 She	 can	 be	 reached	 at	 619/269-6464.	 Questions	
 fooled by a plain clothes person who tries to walk in to your                            and	feedback	welcome:	elaine@cuexecs.com	
 credit union; your staff will catch on.” His point is that you




www.CUBizMag.com                                                                                                    June 2008   Credit Union BUSINESS       61
 >> TECHBIZ



 Checking in on
 Remote Capture
 Some members will view the move toward paperless banking with skepticism. The benefits
 of remote capture, however, outweigh the learning curve – for everyone involved. When
 approaching the concept of remote capture, your credit union must identify the driving reasons
 for implementation. The following suggestions will aid you in that endeavor. By W.B. King




 N
                 ot long ago, I entered my financial institution’s
                 lobby and headed toward the all-too-familiar
                 island that housed deposit slips and envelopes.
                 They were gone. All that remained were pens
                 dangling from thin silver chains. They	 must	
 have	been	busy	today, I thought.
        With a sense of befuddlement, I turned around to see a
 representative waving me over with an assuring smile on his
 face. “Do you want to deposit a check?” he asked. I nodded.
 “We don’t need to bother with envelopes or deposit slips any-
 more.” A sense of ease fell over me.
        Approaching, I noticed to my left an older woman, per-
 haps in her late fifties, who also held a check in her hand.
 She maintained a skeptical look, almost as if to say, “You go
 first.” As a member of Generation Y, I’m not opposed to new
 technology; rather, I welcome it. That’s not to say there isn’t a         As I walked away with my receipt, which included the
 learning curve. As I made my way closer to the ATM, I could         scanned image of my checks, I passed the woman and smiled,
 almost feel the older woman inch closer in anticipation.            as if to say, “Come on in; the water’s fine.”
       In the end, and with little direction, it was simple. Swipe
 the card, enter the pin and follow the touch-screen prompts.        efficiency = Increased sales
 The ATM asked for the check, I made sure it was signed and          When the “Check Clearing for the 21st Century Act” was
 inserted it – just as I would a bulky envelope. Seconds later,      signed into law in October of 2004, the financial industry for-
 the screen displayed a scanned copy of my check and prompt-         ever changed, giving rise to Image Replacement Documents
 ed me to confirm the amount. While the amount was correct,          (IRDs). Known as a leading “sticky” service, analysts predict
 the next check was read incorrectly, and I had to manually          that approximately 40 percent of all financial institutions will
 enter the amount. Well, the application wasn’t flawless, but it     offer remote capture capabilities [in some capacity] to cus-
 was as close as you get to secure, teller-free perfection.          tomers during the next four years.


6   Credit Union BUSINESS June 2008                                                                              www.CUBizMag.com
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          stands a dedicated team.




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 >> TECHBIZ

           Benefits of remote capture include the elimination of
     members having to travel to the branch for deposits, which re-
     moves geographical dependency. Additionally, the timeframe
                                                                         “We have significantly
     for accepting deposits is increased, which in turn allows          reduced item-processing
     funds to become available to the members more quickly. To
     this end, cost and time associated with processing hardcopy          costs and improved
     checks, including mailing and exchange with the Federal Re-
     serve, is significantly decreased.                                operational efficiencies....”
           When approaching the concept of remote capture, a
     credit union must identify the driving reasons for implemen-                       – Dawn Paquet
     tation. Will remote capture help to retain existing members
     or is a part of the overall strategy to attract new members? In   to Northeast regional credit unions. The initiative eliminates
     most cases, the answer is both. Additional concerns should        costs associated with manual item capture, processing and
     include the operational, legal, credit and marketing ramifica-    delivery, including courier services.
     tions associated with integration.                                      “We have significantly reduced item-processing costs
           Generally, hardware and software solution providers         and improved operational efficiencies in implementing
     offer easy integration opportunities that can be used with        VSoft’s check capture solution with Parascript’s check rec-
     existing core business applications and third-party software.     ognition technology,” says Dawn Paquet, manager of check
     Remote capture, however, has varied applications.                 processing and support services for Synergent. “As a result of
           Recently, Parascript, LLC and VSoft Corporation an-         these efficiencies, we were able to transfer internal resources
     nounced a branch capture partnering program with Syner-           and employees to business development tasks to increase
     gent, a leading item and data processing services provider        sales volumes. We are also now able to offer image-based
                                                                       technologies to credit unions at remote locations, that we
                                                                       couldn’t serve before.”
                                                                             While not all credit unions are like the skeptical woman
                                                                       from my recent ATM experience, it remains clear that the
                                                                       technology discovery process is daunting, leaving some orga-
                                                                       nizations sheepish. Vijay Balakrishnan, VSoft’s CEO, says that
                                                                       credit unions that are not actively investigating these applica-
                                                                       tions will lose a competitive edge.
                                                                             “Given that the industry is rapidly becoming image en-
                                                                       abled, the question is not one of ‘should we,’ but rather one
                                                                       of ‘when,’” he says. “The latter is being accelerated by the
                                                                       closure of selected paper processing sites by the Federal Re-
                                                                       serve.”
                                                                             The strategic question Balakrishnan poses is: Where to
                                                                       start? “What we have typically seen is that credit unions start
                                                                       at branch back-counter capture and evolve toward the other
                                                                       points of capture.”
     	Vijay	Balakrishnan,	VSoft’s	CEO.


64      Credit Union BUSINESS June 2008                                                                             www.CUBizMag.com
                                                                                                                    >> TECHBIZ


 suggested “Check” List
 While credit unions are encouraged to adopt remote capture
 technologies, a number of variables should be addressed be-
 fore moving forward, including:

      • Number and location of branches
      • Check volume and value
      • Member demographics – determine frequency
        and value of average deposit
      • Proximity to nearest check clearing center
      • Federal Reserve calendar on closing processing
        centers




 B
                  alakrishnan explains that the VSoft solution
                  consists of two interconnected platforms: a
                  capture application that sits at the branches
                  (Agile Branch) and a central solution (VSoft
                  Centrum) that collects transactions from all       	Mike	Fenton,	Parascript’s	VP	of	Total	Recognition	Solutions.
 branches and facilitates image-based correction and transac-
 tion balancing before generating cash letters for outbound          the-trainer sessions so that corporate can, in turn, train their
 transmission to the Federal Reserve or other image-exchange         credit union customers as needed.”
 networks.                                                                Additionally, VSoft offers Web-based training. “What we
       “The central solution will typically sit at a corporate       have seen is that once branch personnel use the product, they
 credit union, or a similar service provider. The capture solu-      like the ease of use and labor savings and [they] become
 tion will sit at individual branches,” he continues. “The roll-     advocates quickly,” says Balakrishnan.
 out is fairly straightforward as the business rules to configure
 Agile Branch are delivered electronically from VSoft Centrum,       Capture savings
 making the addition of branches fairly seamless.”                   Before adopting branch capture, Synergent’s dependency on
       Software technologies and ancillary benefits are often        courier services was restricted by geographic boundaries,
 inflated when generally discussed; however, if the decision         which precluded the company from accepting checks from
 is made to adopt a new platform, various issues arise such as       distant credit unions. Today, credit union clients can extend
 training and user-ability.                                          their reach and provide a wider variety of business options to
       “Our experience has been that operating Agile Branch is       their business members. Depending on the size of the credit
 straightforward. It takes very little to train tellers and branch   union, Balakrishnan explains that annually credit unions will
 personnel to operate the application, and [it] is typically ac-     realize a savings between $5,000 and $30,000 on courier
 complished using the product and accompanying documen-              fees alone.
 tation,” Balakrishnan continues. “VSoft offers onsite train-             Savings are one thing while investments are another. Mike
 ing on installation and configuration for its corporate credit      Fenton, Parascript’s vice president of total recognition solu-
 union customers. This internal instruction includes train-          tions, says that it is hard to determine the dollar amount each




www.CUBizMag.com                                                                              June 2008      Credit Union BUSINESS   65
 >> TECHBIZ



                                                                         “...Credit unions with
                                                                            existing or future
                                                                      commercial business may
                                                                      look at merchant capture.”
                                                                                  – Vijay Balakrishnan
                                                                      seamlessly at a time and pace of their choosing.”
                                                                             Serving more than 1,700 financial institution clients, in-
                                                                      cluding more than half of the corporate credit union market,
                                                                      VSoft recently added Corporate America Credit Union (CACU)
                                                                      to its client list. “By incorporating the full suite of remote cap-
     respective credit union would need to invest. He did, however,   ture solutions into our processes, we foresee an improvement
     offer guidelines to help calculate returns on investment:        in our processing as well as the quality of service we provide
                                                                      our members,” CACU’s President/CEO Thomas Bonds notes.
          • Determine transportation savings in the elimination             “The strategic questions revolve around whether to im-
            of shipping paper. (Send images and data instead.)        plement branch capture at the back counter of a branch, or
          • Determine work preparation and paper-handling             at the teller station itself,” Balakrishnan continues. “Those
            labor savings (capture at the earliest point of           credit unions with existing or future commercial business
            entry and using imaging and recognition technology).      may look at merchant capture. There is a burgeoning move
          • Determine costs related to storage of paper checks.       toward capture at image-enabled ATMs, and the latest is a
          • Determine costs related to hardcopy paper                 move toward consumer capture – capturing check deposit
            records research.                                         images in members’ homes.”
          • Determine error-reduction ratios by capturing                    At the end of the day, it comes down to streamlining a
            with recognition technology.                              secure transaction. And while the older woman I noted ear-
          • Determine ability to float savings through the            lier might finally be comfortable with the new ATM deposit
            acceleration of funds flow.                               format, I’m looking forward to the option of skipping a trip
                                                                      to my financial institution altogether and capturing my check
     One size, however, does not fit all. To this end, remote cap-    deposit image from the comfort of home. I tend to gravitate
     ture platforms can be specifically tailored to credit unions     toward organizations that offer progressive alternatives. After
     with three branches or thirty. “For a two-branch institution,    all, rising gas prices might soon make traditional deposits
     it may make sense to start with teller capture as the invest-    prohibitive.
     ment in scanners for each teller station is relatively low,”
     Balakrishnan continues. “VSoft provides a platform solution W.	 B.	 King	 has	 more	 than	 10	 years’	 experience	 writing	
     with an underlying shared framework, so that institutions can for	 business	 and	 technology	 publications.	 Email	 him	 at	
     begin with any point of capture and migrate to the others wbradking@hotmail.com.	


66      Credit Union BUSINESS June 2008                                                                              www.CUBizMag.com
  “My Children’s Miracle Network Hospital
                                   Saved My Life”
                                     Children’s Miracle Network continues to be the
                                     charity of choice for America’s credit unions
                                     for one simple reason—all funds raised benefit
                                     local children’s hospitals. Through the innovative
                                     Credit Unions for Kids program, credit unions
                                     around the nation engage in creative fund raising
                                     to further advance the credit union philosophy of
                                     “People Helping People.”




Learn more about Credit Unions For Kids at:
  www.childrensmiraclenetwork.org/cufk
 >> BUSINESS MEMBER UPDATE



 Seminar Gold
 Mining Biz Members
 There’s gold in them thar hills! Is your credit union digging deeply enough to uncover the
 precious nuggets that will help you build and nurture relationships with the small businesses?
 If not, get your shovels ready. The Credit Union Gold Rush is calling and this is one
 opportunity you don’t want to miss. By Lin Grensing-Pophal
     HSAs. Business lending. Credit card processing.                  tion’s manager of adult membership. In fact, Garkey points
     Investing for small business owners. Tax tips for                to the Baby Boomer population as a growing area of small
     small business owners. Marketing small business.                 business growth. Many of these small business Baby Boomers




     T
                                                                      may already be credit union members.
                    here are any number of topics of interest to           Garkey has an extensive background in consumer fi-
                    small businesses that savvy credit unions can     nance education, and she agrees that planning and present-
                    use as tools to build and nurture relationships   ing seminars can be a challenge for credit unions – especially
                    with the small businesses in their service ar-    small credit unions. To help, one of the products Garkey of-
                    eas. Unfortunately, says Bob
     Zeitlinger, many credit unions “just don’t
     get it.” Zeitlinger is managing director of B
     to Z Communications, in Dumont, N.J. “I’m
     sure there are a lot of good ones out there,”
     he adds, but he also notes that, particularly
     in the business-to-business (B2B) arena,
     there are many missed opportunities.
           While Zeitlinger acknowledges that
     credit unions have been presenting semi-
     nars to the consumer market for years, he
     notes that the business market is different.
           Presenting seminars on consumer/
     member issues has been a long-term strat-
     egy for credit unions – and reaching out
     to the small business market is the natural
     next step for credit unions that are hoping
     to expand member business services, says
     Jan Garkey, Credit Union National Associa-


68      Credit Union BUSINESS June 2008                                                                          www.CUBizMag.com
                                                                             >> BUSINESS MEMBER UPDATE



       The key factors: topic, title, timing and presenter.
 fers to credit unions is the “Seminars in a Box” series. This           Health savings accounts are a “hot topic,” says Sue Po-
 all-inclusive package of materials instructs CUs on how to         gatschnik, credit union product manager for Wolters Kluwer
 present seminars on a wide array of financial topics, primar-      Financial Services. “Credit unions can present small employ
 ily for the consumer market. The toolkits include a variety        ers with seminars on health savings accounts to educate them
 of tools and ready-made forms, checklists and materials to         about what they are, their benefits, etc. This is one way for the
 provide a step-by-step process for making the event virtually      credit union to interact with the community as well as with
 painless.                                                          local businesses.”
      Garkey’s experience in education as well as her experi-            Garkey recommends selecting topics based on key prod-
 ence in working with credit unions through the “Seminars           uct and service offerings. In addition, there are certain “hot
 in a Box” series has made her an expert on what it takes to        topics” that have relevance for both consumer and business
 prepare and present seminars that not only draw a crowd but        audiences – identity theft, for example.
 are also effective. The key factors? Topic, title, timing – and,        It’s also important, Zeitlinger notes, to have a clearly
 of course, presenter.                                              articulated goal for the event. Why are you presenting this
                                                                    information and what outcomes are you hoping for? Without
 topic                                                              a clearly articulated goal, it is very likely that the focus and
 Henry DeVries is the author of “Pain Killer Marketing and          content of the seminar will miss the mark.
 Client Seduction” (Wbusiness Books, 2008). “Generating
 new client leads through seminars is a proven strategy,” says      title – and Marketing
 DeVries. “But some credit unions are frustrated with a lack        Coming up with titles that attract attention can also have a
 of turnout for the seminars they host.” The first step, he says,   big impact on attendance, Garkey notes. She recommends
 is “scrutinizing your proposed topic by asking yourself some       that seminar planners avoid boring, literal titles in favor of
 hard questions.” The questions are:                                titles that tantalize. In addition to a compelling title, credit
                                                                    unions need to use multiple methods of “getting the word
      • If prospective clients attend this seminar, what            out,” Garkey says. “You have to get the word out in various
        beneficial information will they receive?                   ways – posters up in the community, newspaper articles, put-
      • Is this information that my competition either              ting information on your Website, talking to members, put-
        cannot, or does not, offer?                                 ting flyers in statements or mailings – you can’t rely on one
      • Is this information a strong enough pull to justify at      method of marketing.”
        tendees spending their precious time with us?                     Marketing shouldn’t end when the program begins, Po-
                                                                    gatschnik notes. In fact, credit unions should make sure that
 “You have to look at what’s topical,” says Zeitlinger. “You        they have pertinent “leave behind” materials for attendees to
 can’t say, ‘We’d like to have a seminar to talk to you about       take with them. And, she adds, “make sure you have staff
 our new products for small business’ – that won’t work. I can      there to answer questions and provide additional informa-
 just go in and get that sales pitch on my own time. You have to    tion,” particularly if the presenter is not a representative of
 take a news point of view. What’s interesting? What’s topical?”    the credit union.
 he says. “Something like ‘How to Position Yourself to Raise               Zeitlinger agrees, noting that the seminars themselves
 Capital in a Down Economy.’”

www.CUBizMag.com                                                                           June 2008     Credit Union BUSINESS      69
 >> BUSINESS MEMBER UPDATE




     credit public relations opportunities – before, during and        event. “It keeps many options open that would otherwise be
     after the event. “You should promote it beforehand and you        closed, such as selling the recording or using it as an internal
     can promote it by inviting business reporters to the event. If    training tool.”
     you set it up as something new and interesting that the audi-
     ence hasn’t heard before, there’s at least a small chance that    timing – and Format
     the media hasn’t heard it before, and it doesn’t hurt to invite   Presenting programs at the “right” time, in a convenient lo-
     them,” he says. After the event, he adds, you can put together    cation, offers value when interaction is important. In other
     a press release saying, “Here are some interesting things that    cases, Webinars can be a convenient and cost effective way
     came out of this meeting.” And, you can promote it on your        to offer information that attendees can access more conve-
     Website or on the Websites of presenters.                         niently.
          Another great way to extend the reach and value of semi-           Having a recording – or offering the event as an on-
     nars, suggests Shel Horowitz, a marketing expert and author       demand Webinar – can address some of these concerns,
     of “Marketing Without Megabucks: How to Sell Anything on          particularly if a face-to-face seminar isn’t essential. For some
     a Shoestring” (Simon and Schuster, 1993), is recording the        small businesses, notes Pogatschnik, brown-bag lunches can



70      Credit Union BUSINESS June 2008                                                                            www.CUBizMag.com
                                                                             >> BUSINESS MEMBER UPDATE

                                                                    iad of small details involved can make or break an event.” He
    “Generating new client                                          offers a number of recommendations to help maximize the
                                                                    success of these efforts:
  leads through seminars is
                                                                         • Develop a checklist and timeline for pre/post-s
      a proven strategy.”                                                  eminar activities.
                                                                         • Use informal research to pre-test topics to make sure
               –– Henry DeVries                                            the one you choose has the most appeal to your
                                                                           target audience.
                                                                         • Make sure the letters or invitations you use reflect
 be a convenient and effective way to offer information. She                a first-class image for your firm.
 suggests “talking with businesses to find times that are most           • Confirm registrations 48 hours before the event
 effective for them.”                                                      by email.
                                                                         • Deliver seminar content that is of real value – not a
 Presenters                                                                thinly disguised sales pitch for your services.
 Where can credit unions find presenters? In a variety of plac-
                                                                         • Conduct an organized follow-up five to 10 days after
 es. Staff, board members and credit union members them-
                                                                           the seminar in an effort to start a dialogue with
 selves can be great sources of expertise and information.
                                                                           potential clients.
        “There are tons of them out there,” says Garkey. It’s im-
                                                                         • Measure how much the seminars cost and how
 portant though, she notes, that presenters clearly understand
                                                                           much revenue was ultimately generated to calculate
 that their role is to educate – not sell. She makes that advice
                                                                           your ROI.
 explicit when she works with business professionals.
       “If the outside speaker wants to hand out business cards
                                                                    While Zeitlinger is admittedly critical of many credit union’s
 at the end of the presentation, that’s fine,” she says. But the
                                                                    B2B marketing efforts, he does note that credit unions have
 content and delivery of the presentation itself must be focused
                                                                    an edge in reaching out to small businesses, one that banks
 on education. “You really have to make sure you keep it edu-
                                                                    haven’t been able to develop. Credit unions, he acknowledg-
 cational during the seminar so you retain your credibility,”
                                                                    es, are known for a strong focus on service, and many busi-
 she says.
                                                                    ness owners are “looking for a little bit of love and they’re
       Horowitz agrees and adds that “presenters should actu-
                                                                    really not getting it from banks.” There are any number of
 ally have presentation skills! They should know better than to
                                                                    credit union members who are also small business owners,
 create 100-word PowerPoints and read them verbatim,” for
                                                                    he notes, and that tendency represents a ripe opportunity for
 example. Good presenters, he notes, will “have a clear idea of
                                                                    credit unions to reach out and provide the love!
 what they want to achieve and will structure the presentation
 to achieve it.”
                                                                    Lin	Grensing-Pophal,	SPHR,	has	more	than	15	years	of	ex-
                                                                    perience	in	employee	relations	and	organizational	com-
 Devil in the Details
                                                                    munications.	She	is	the	author	of	several	books,	including	
 There’s a good reason that Garkey’s “Seminars in a Box” se-
                                                                    “The	HR	Book.”
 ries is so popular. It makes the myriad details involved in
 holding a seminar easy to tackle. DeVries notes that “the myr-




www.CUBizMag.com                                                                          June 2008    Credit Union BUSINESS     71
     >> CFO CURRENCY



 Tools of the Trade
 Key Indicators for CFOs
 What indicators are most important for you as a member of the credit union industry?
 Listen in as an expert weighs in with a list of the most significant economic indicators for
 credit unions. How is your CU measuring up and what do these key indicators mean
 for your financial institution? By Gary R. Crum




 T
                racking economic indicators is a
                hobby for many people, but how
                good are they at predicting the
                future? What indicators are most
                important for the credit union
 industry? What about local and regional indi-
 cators versus national indicators?
       There is too much economic informa-
 tion floating around for any one organization
 to interpret it all with any effectiveness. Some
 information is not on a list of indicators but
 must be extrapolated from other sources.
        For example, some might say that credit
 unions don’t have to concern themselves with
 the gyrations of the stock market. However,
 changes in the stock market indices may fore-
 cast deposit flow as investors attempt to juggle safety and yield         According to Brian Turner, director, advisory services at
 and use deposit accounts as a safe harbor.                           Southwest Corp Federal Credit Union, the following economic
       The value of economic indicators is also a function of         indicators provide the best information for credit unions. He
 time. Indicators that are based on one month are probably not        broke his choices into several major categories:
 as sound as those indicating a three-month trend. On the other
 hand, the one-month statistics are available more frequently                               eConoMICs
 and, combined with previous months, may indicate a trend             Gross Domestic Product (GDP)
 line.                                                                This economic statistic refers to the total market value of
       Traditionally, the government publishes economic indi-         all final goods and services that are produced by the United
 cators that may be analyzed in different ways by different ana-      States for a given year. It is the summation of total consumer,
 lysts. I asked an expert to provide a list of the most significant   investment and government spending, plus the value of net
 indicators.

7    Credit Union BUSINESS June 2008                                                                             www.CUBizMag.com
 >> CFO CURRENCY


 exports. GDP is the barometer by which the markets and Fed sures are conducted on both a wholesale and consumer level.
 policymakers gauge the ultimate strength of the economy.       Wholesale inflation is determined by the prices for goods
                                                                paid by the nation’s producers and is commonly reported as
 Consumer Spending
                                                                the Producer Price Index (PPI). Consumer inflation is deter-
 This release is associated with the total amount of money
                                                                mined by the prices for goods paid by the nation’s consum-
 consumers spend on goods and services (with the exception
                                                                ers and is commonly reported as the Consumer Price Index
 of new homes, which are considered to be capital goods).
                                                                (CPI).
 What makes consumer spending important is the fact that it
 accounts for two-thirds of the nation’s GDP. It includes both
                                                                There are two key elements to the inflation reports. The first
 non-durable (food, clothing, etc.) and durable goods (appli-
                                                                involves determining how much inflation at the wholesale
 ances, cars, equipment and furnishings).
                                                                level can/is passed on to the consumer. Sometimes economic
 Retail Sales                                                   conditions and consumer demand limit that transfer. The sec-
 A key component in measuring the broad pattern of consum- ond is that there is an important relationship between growth
 er spending, retail sales refers to the purchases of consumer (GDP) and inflation. If the economy is growing at a three-
 goods, both durable (lasting more than three years) and non- percent rate but inflation is rising at a four-percent pace,
 durable (lasting less than three years). Retail Sales accounts some would contend that the economy, namely the consumer
 for approximately three-fifths of all consumer spending.       market, is falling behind.

 Wholesale and Consumer Inflation                                  MARKET INDICES
 Inflation generally refers to the price appreciation of a prod-   Household Debt service Ratio
 uct or service relevant to its available quantity. These mea-     The Household Debt Service Ratio (DSR) is an estimate of the
                                                                             ratio of debt payments to disposable personal
                                                                             income. Debt payments consist of the estimated
                                                                             required payments on outstanding mortgage and
                                                                             consumer debt. This ratio gives an understand-
                                                                             ing of the prevailing consumer debt load rela-
                                                                             tive to consumers’ wages and other income. The
                                                                             higher the ratio, the more consumers are paying
                                                                             from their personal income sources to service
                                                                             the debt.

                                                                               new and existing Home sales
                                                                               Collectively, these two reports give us a feel for
                                                                               the pace by which the residential housing sector
                                                                               is performing. They provide us with a direct ref-
                                                                               erence to the residential housing market in that
                                                                               they are both based on the annualized number
                                                                               of homes being sold. They also give us an indi-
                                                                               rect reference to consumer spending, personal
                                                                               income and employment behaviors.


74   Credit Union BUSINESS June 2008                                                                          www.CUBizMag.com
                                                                                               >> CFO CURRENCY

                                                                 are more germane than others, and they might tell a different
                                                                 story for any given credit union. Many credit unions develop
                                                                 impact statements regarding the potential effect of each indi-
                                                                 cator on their particular business model.
                                                                       There are other important indicators that should be re-
                                                                 viewed on a situational basis. For example, increasing un-
                                                                 employment might have several implications for your credit
                                                                 union: increasing delinquencies in loan payments indicating
                                                                 a need for more collection personnel; decreasing employee
                                                                 turnover as employees have fewer alternative opportunities;
                                                                 and decreasing loan volumes as consumers postpone ma-
                                                                 jor purchases. (This implication may result in a surplus of
                                                                 employees in the new loan area and a shortage in the col-
                                                                 lection department. The ability to quickly reallocate human
                                                                 resources is a benefit of cross-training employees.) Deposits
                                                                 may also decrease because of fewer payroll direct deposits.
 Brian	Turner	–	Southwest	Corp	Federal	Credit	Union
                                                                       General business news can also provide important in-
 MBA Mortgage Refinancing Index                                  dicators for credit unions. For example, Bank of America
 Issued by the Mortgage Bankers Association, this index mea-     recently announced strict lending guidelines for the soon-
 sures the refinance share of mortgage activity as opposed to    to-be-acquired mortgage giant Countrywide Financial. That
 purchase mortgages and is based on total mortgage applica-      announcement means one of the most aggressive and largest
 tions that are issued on a weekly basis. It gives lenders an    mortgage lenders in the nation will be playing by the same
 indication of where prevailing mortgage rates are relative      rules as regulated financial institutions.
 to current loans outstanding. Traditionally, this share aver-         Additionally, legislation is pending that would bring all
 ages around 45 percent of total mortgage applications but       mortgage brokers under a federal regulatory agency. Changes
 has dropped down to as low as 25 percent and as high as 98      in the requirements for disclosure of interest rate spread pre-
 percent, depending on cyclical mortgage rates.                  miums will also make the mortgage business less profitable
                                                                 for brokers. Expect a reduction in the number of mortgage
 Domestic Vehicle sales                                          brokers.
 Issued by the Commerce Department, this release reports the          From this news, we can deduce that reduced competi-
 annualized sales of autos and trucks. This report gives us an   tion will make mortgage lending an even better opportunity
 understanding of overall consumer demand for assets that        for credit unions than it was in the past. Using this informa-
 account for more than one-third of credit union loan activi-    tion would mean that budget preparations for 2009 should
 ties. Monthly sales are seasonally adjusted to provide more     address more aggressive mortgage lending marketing strate-
 meaningful data to assess consumer spending patterns and        gies.
 behavior.                                                            Other places to find economic indicators include trends
                                                                 in both your own and other credit unions’ financials. Exam-
 What Indicators Mean to the CU                                  ining peer group financial statements can provide important
 Just what do the economic indicators mean to your credit        feedback as to trends in the industry before analysts write their
 union? Depending on asset and liability mix, some indicators    reports. Networking with other CFOs is good, but crunching


www.CUBizMag.com                                                                        June 2008     Credit Union BUSINESS      75
 >> CFO CURRENCY


                                                                                                             tains an index of govern-
                                                                                                             ment databases.
                                                                                                                 The Federal Reserve
                                                                                                            Bank of San Francisco’s
                                                                                                            monthly         publication,
                                                                                                            “FedViews,” reports on
                                                                                                            important economic data
                                                                                                            in a concise form that is
                                                                                                            suitable for distribution to
                                                                                                            senior management and
                                                                                                            the board of directors.
                                                                                                            Corresponding charts are
                                                                                                            also available for down-
                                                                                                            load.: http://www.frbsf.
                                                                                                           org/publications/econom-
                                                                                                           ics/fedviews/index.html.
                                                                                                                 In addition, each Fed-
                                                                                                           eral Reserve Bank pro-
 the numbers yourself can be even more revealing.                                                          duces localized reports
                                                                       for its region. Information includes residential construction
 statistical Resources on the Web                                      and existing home statistics as well as consumer lending.
 This University of Michigan Website includes links to every           Local information may be different from the same informa-
 economic indicator on the Web. It also provides links to vir-         tion on a national basis. For example, Arizona has twice the
 tually every economic data source available. Time spent ex-           amount of foreclosures as the national average. If you are an
 ploring this site will be rewarded in terms of finding useful         Arizona credit union, that, not national statistics, is the infor-
 data and a plethora of literature regarding economics: http://        mation you need.
 www.lib.umich.edu/govdocs/stecon.html.                                     Economic indicators are one more tool for managing
       At the U of Michigan site, you can also find the U.S. Depart-   a credit union; their reporting and interpretation should be
 ment of Labor local unemployment information. You can get             embraced by the CFO. Sharing this important information
 more detailed information about jobs at another site, which is        with senior management and the board further solidifies the
 interestingly called Economy in a Can. At this site, you can find     CFO as the company financial expert.
 employment information by occupation and by county and city
 as well as graphic depictions of the industry establishment mix       Gary	Crum	is	a	nationally	published	financial	writer	with	
 – good information for business development.                          over	 25	 years	 of	 banking,	 mortgage-banking,	 investing,	
       An excellent site to find information for the Board of          asset-management	and	real	estate	experience.	He	may	be	
 Directors can be found at http://www.gpoaccess.gov/indica-            contacted	at	gary.crum@financial-writer.com.
 tors/index.html. In addition to current information, this site
 also features historical information for the past 10 years for
 all the major indices. Searches can be made and the site con-



76   Credit Union BUSINESS June 2008                                                                                 www.CUBizMag.com
                                                                                         >> SECURITY | BUDGET



 How to Afford Security
 7 Practical Ideas
 Many credit unions have limited resources available for security but face the same security
 risks as larger financial institutions with deep pockets. How can your CU make the best choices
 for security on a limited budget? By Selena Chavis




 A
                t Cornerstone Community Federal Credit Union       day. We are just not that big.” says Kennedy, pointing to the
                (CCFCU) in New York, a three-person depart-        fact that the IT department’s three-person team covers every-
                ment oversees the entire scope of information      thing from “soup to nuts.” “You would have to have someone
                technology needs for three branches, according     that is constantly identifying new threats.”
                to vice president of information systems, Mark
 Kennedy. It’s not an atypical prospect, as the organization       Paying for security
 of less than $300 million in assets and a staff of 94 fits the    Despite the consolidation craze within the industry, most CUs
 profile of the majority of CUs in the United States – typically               still operate with small staffing numbers and less
 small to mid-sized entities without the deep pockets of                            than $100 million in assets. In fact, according
 larger financial institutions.                                                        to CUNA Mutual statistics, of the 8,396 CUs
       As high-profile security                                                            operating in the U.S. in 2007, more
 breaches continue to plague                                                                  than 7,700 had less than 100 em-
 financial institutions across                                                                     ployees, and 85 percent had
 the country, CUs are finding                                                                           less than $100 million in
 that they have to balance                                                                                   assets.
 limited budgets and                                                                                                When it comes
 resources against                                                                                            to leveraging dollars
 an      increasingly                                                                                         for a secure techno-
 broadened need                                                                                                logical infrastructure,
 for a solid tech-                                                                                            CUs may be at a dis-
 nological security                                                                                         advantage compared to
 infrastructure. And                                                                                      some larger financial in-
 the threats are only                                                                                    stitutions. That’s because
 expected to get more com-                                                                            they face the same risks no
 plex, experts say.                                                                                  matter their size, according
       “We don’t have the                                                                              to Willy Leichter, director
 expertise to sit and mon-                                                                              of product marketing for
 itor this stuff 24 hours a                                                                               security solution vendor


www.CUBizMag.com                                                                           June 2008     Credit Union BUSINESS       77
 >> SECURITY | BUDGET

     Websense.                                                           has been mostly about the perimeter,” he suggests. “Now,
           “It’s become a combination of being smart with your           it’s less about the perimeter and more about protecting your
     money and managing [security] with fewer people,” he notes,         data.”
     adding that the scope of security is becoming much broader                 Prince concurs, adding that statistics reveal that the
     and more complex. “The challenge for these institutions is          greatest threats start from within. According to InfoSecurity-
     getting a handle on what data is important and then deciding        Analysis.com, 37 percent of data-breach incidents across all
     how best to manage that [information].”                             industries are caused by either careless and untrained em-
           Realizing that they could not manage the security mon-        ployees or malicious employees – representing the majority
     ster on their own, Cornerstone reached out to the experts           of incidents.
     and found that contracting with a vendor of hosted security                “The weakest links come from the inside,” he empha-
     solutions was a cost-effective alternative to trying to bring so-   sizes. “It’s not even a technology issue – employees are by far
     lutions in house.                                                   the biggest threats.”
           “So far, we have not had any problems,” Kennedy notes,               Alongside internal mishaps and threats, Leichter says
     adding that all traffic has to go through Perimeter eSecurity       that new trends, such as telecommuting and the use of Web
     – the company’s vendor of choice – before it reaches Corner-        2.0, open up organizations to more security threats. As a re-
     stone. “We essentially become a black hole on the Internet.         sult, these trends change the way organizations need to ap-
     They (Perimeter eSecurity) scrub it. They monitor it … then         proach data-breach issues. “So many organizations want to
     we get reports on any suspicious activity they see. We don’t        leverage Web 2.0,” he notes. “There are a lot of benefits there
     have any software in here.”                                         … but you are breaking the traditional security model.”

     What to secure                                                      Bang for the Buck
     Kevin Prince, CSO with Perimeter eSecurity, suggests that CUs       Placing the ever-widening spectrum of security under the
     should reach out to professionals who have a more global            microscope, experts offer seven practical suggestions and
     view of security in mind. “It doesn’t cost anything to talk to a    pieces of advice to CUs on how to make the most of their
     security professional,” he points out, adding that if CUs try to    security dollars.
     go it alone, they may end up spending more money down the
     road as a result of poor planning.                                  1. Start simple. “Too much too soon can paralyze a business,”
                                                   According       to    Leichter says. Solid employee training programs will get the
                                                  Websense’s Leich-      ball rolling in the right direction and will eliminate the vast
                                                  ter, also a provid-    majority of mistakes occurring internally. Pointing out that
                                                  er of hosted secu-     most CUs will say they offer annual security training, Prince
                                                  rity solutions, the    emphasizes that investments should be made in formalized
                                                  realm of security      and continued learning programs. “If you raise the waterline
                                                  infrastructure has     of security awareness, it’s going to help all security areas,” he
                                                  evolved to a much      adds. For a nominal cost, many courses are offered online
                                                  broader scope          and provide the latest information on security threats.
                                                  than just keeping
                                                  intruders out. “In     2. Take a layered approach to security that includes the
                                                  the past, security     “edge,” the core network and individual systems security,
     	Mark	Kennedy,	Cornerstone	Community	
     Federal	Credit	Union	(CCFCU)


78      Credit Union BUSINESS June 2008                                                                               www.CUBizMag.com
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                            Your single projects
                                    are welcomed here.
                                                    As are your married and d
                                                                             ivorced projects.
  ©2008 Redbeard®




                    The Credit Union Industry’s Leading Creative Services Agency

                    Redbeard Communications, Inc.
                            ®
                                                    |   378 Fifth Street, Hollister, CA 95023   |   T 831.634.4633    |   F 831.634.4626   |   redbeard.com




 and pinpoint vendors that are looking for threats across a                                popular systems and do not require a lot of specialized train-
 number of protocols. “Delivery platforms are all changing,”                               ing. “On the inbound, hosted services are very appealing,”
 Kennedy says, pointing to the evolving use of the Internet and                            he says.
 wireless technologies. “It’s getting more and more difficult
 to keep up with what the hackers are trying to do.” For each      5. One important component to security that Prince suggests
 layer, Kennedy suggests implementing security infrastructure      many CUs do not cover very well is patch management. “That
 for intrusion protection (firewall, antivirus, antispam), Web     is where a lot of attackers are getting in. Patching the system
 security and data security.                                       is one of the best things you can do for risk,” he points out.
                                                                   He adds that considerations for patching have to cover specif-
 3. Make sure desktops have the most up-to-date security solu- ics for all applications, not just Microsoft, and many CUs miss
 tions installed. “The threats landscape has changed,” Prince this point. “The issue is that updates only patch Microsoft
 notes. “The shift in attacks is going straight to the desktop. We applications. If all you have are Microsoft applications, then
 have to be much more desktop aware and not just focus on you are probably fine, but there’s not that many networks that
 the “edge” security.” Prince notes that he is often surprised are in that perfect world.”
 at how many organizations have not upgraded to full security
 suites, even if they have an anti-virus product. He also sug- Prince points out that many networks have a combination of
 gests that this upgrading can be done at minimal cost.            Macintosh and Linux programs alongside Microsoft, just to
                                                                   name a few, and a number of these applications have an-
 4. With limited IT staff and resources available, Kennedy sug- nounced compromises that need to be addressed.
 gests looking to products that are well integrated with other


www.CUBizMag.com                                                                                                     June 2008    Credit Union BUSINESS       79
 >> SECURITY | BUDGET




 Where there are small networks, patching can actually be          data that could potentially leak. Pointing to “common sense”
 done manually without a lot of headache. “Make it a monthly       security, he suggests identifying “what information would
 chore to walk around to every computer and patch every            have the most devastating impact if it leaked” and starting
 application separately,” he suggests, adding that a relatively    there. “If you start to tackle a couple of simple problems, it
 low-cost, more formal patch management system can also be         will then lead you to other broader issues,” he says.
 considered.
                                                                   For sensitive data that may reside on a few servers, Prince
 6. Web content filtering should be an area that CUs address.      suggests a host-based intrusion detection system. While the
 “The largest increase in attack types are in Web content,”        weakness of this type of system rests in the fact that it only
 Prince says. “Keeping employees from going to malicious           protects one system at a time, he asserts that “the amount of
 Websites is paramount.”                                           security mitigation you get is phenomenal.” For most CUs,
                                                                   this security strategy would include one to three servers. “For
 While these types of solutions used to be costly, Prince notes    a few hundred [dollars] a month, you can protect critical
 that they are often not built in to systems that CUs are using.   systems,” he emphasizes, suggesting that if a CU can’t afford
 “They may have it (filtering) and may not be aware of it,” he     a more broad-based approach, at least it could provide extra
 suggests, adding that this is a great way to reduce the likeli-   protection for critical data.
 hood of getting malware installed.
                                                                 Selena	 Chavis	 is	 a	 Florida-based	 journalist	 whose	 work	
 7. Protection of sensitive member data should be a primary appears	regularly	in	a	variety	of	trade	and	consumer	pub-
 concern for CUs, and Leichter emphasizes that organizations lications	 covering	 everything	 from	 corporate	 and	 man-
 can get very nervous very quickly when they consider all of the agement	topics	to	health	care	and	travel.



80   Credit Union BUSINESS June 2008                                                                           www.CUBizMag.com
                                                                                  >> THE LEADERSHIP SERIES



 Got Your Ears On?
 4 Tips for CEOs
 Hear ye, hear ye! As a credit union CEO, the feedback you’re receiving – if you’re receiving any
 at all – may not accurately reflect reality. That’s because your reports are often more
 concerned with your reaction than the truth. Learn how to circumvent this issue by actively
 soliciting honest feedback. These signs and signals will help you do so. By Dee Burks




 I
           t’s lonely at the top. It can also be quiet – too quiet.   to cultivate his relationship and observation skills in order to
           Feedback is essential for anyone, including the CEO.       get to the truth.
           However, it can also be very difficult to come by once          Daniel Goleman, Ph.D, has done extensive research into
           you step into that executive suite. Those reporting to     the value of these relationship and observation skills. His
           the CEO can habitually give a positive report on his       groundbreaking research was published in “Emotional Intel-
 performance, because they are often more concerned with              ligence,” which gave significant weight to the need for soft
 the CEO’s reaction than the truth. If you take these reports         skills when managing people. Originally released in the mid
 at face value and don’t actively solicit honest feedback, you        1990s, Goleman’s work stayed on the NYT bestseller list for
 may be in store for a nasty surprise: You may suddenly find          more than 18 months and has gone on to sell more than five
 yourself tied to the train tracks with no hope of rescue.            million copies in thirty languages. Within his research and
      It is not uncommon for indi-
 viduals at the executive level to be
 devastated by a pink slip when they
 had no clue there was even a prob-
 lem. In order to overcome this is-
 sue, the CEO must be able to read
 the signs and signals as expressed
 through the behavior of his employ-
 ees and board members. He must
 then use that feedback to improve
 his performance. He must also be
 willing to dig for more accurate
 responses from his staff than just
 the automated positive assurances
 that he is doing a good job. This
 aim can be extremely difficult to
 accomplish and it forces the CEO


www.CUBizMag.com                                                                             June 2008    Credit Union BUSINESS      81
 >> THE LEADERSHIP SERIES


 subsequent books, Goleman reveals that “while the vast ma-     leader when my staff lacks any self-motivation and constantly
 jority of CEOs in any field are initially hired for their drive,
                                                                absorbs all my time?” The truth is that this is one of the first
 intelligence, and business expertise, the majority who are     and most obvious signs that your leadership may not be as
 fired, are fired for their lack of people skills.” This tendency
                                                                effective as you think. If your staff constantly needs reassur-
 means that they are unable to interpret the performance and    ance from you, it’s because you have trained them to need it.
 interactions with those they direct and thus adjust their lead-Usually this tendency happens innocently as a result of the
 ership style accordingly. The result is that they simply cannotCEO either giving his input along the way on every project or
 win over, or even get along with, their boards of directors,   frequently correcting his direct reports. Employees quickly
 employees or any others on whom their success depends.         learn that the only way to please you is to be sure that you ap-
      It is important for the CEO to evaluate the interaction   prove of every step, no matter how minor. You can think of
 of his staff in several key areas as a direct reflection, and as
                                                                this situation much like a star basketball player suddenly be-
 very valuable feedback, on how he is really doing as a leader. ing made the coach. He is so used to doing things himself that
 The good news is that there are some very distinct signs and   it seems natural to step in or give his opinion on every minor
 signals you can observe to rate your performance – although    detail. Unfortunately, this type of response is perceived as a
 you must be prepared if they reveal a much less positive pic-  lack of confidence in the team, who soon find out it’s easier
 ture than your staff may verbally lead you to believe.         to let the coach make all the decisions than risk the reaction
                                                                if they get one wrong. A good coach knows when to step in
 1. Play Me or Trade Me                                         and when to let the team handle things. If you find yourself
 I recall sitting in the office of a CEO and him complaining, in this situation, remember that you’re the coach not the star.
 “It’s like my staff can’t do anything without checking with Don’t comment on the little decisions and your staff will soon
 me first. It takes all my time just assuring the different de- have the confidence to handle them. As a result, your time
 partments are on the right track. How can I be an effective will be freed up for more important issues.

                                                                                            2. Staff Development
                                                                                            A very revealing area of observation
                                                                                            for a CEO who is interested in his
                                                                                            own performance is the develop-
                                                                                            ment of his staff. Think about your
                                                                                            key personnel. Have they changed
                                                                                            and grown in their own leadership
                                                                                            skills? Have they developed new or
                                                                                            enhanced levels of skill? If the an-
                                                                                            swer is yes then you can certainly
                                                                                            feel good about this area of your
                                                                                            leadership ability. However, if most
                                                                                            of your team is essentially the same,
                                                                                            and they perform the same level of
                                                                                            work that they did last year – and
                                                                                            even the year before – then it should
                                                                                            put you on alert to a problem.

8   Credit Union BUSINESS June 2008                                                                         www.CUBizMag.com
                                                                                >> THE LEADERSHIP SERIES


       One of the key aspects of a truly effective leader is to cre-up the verbal and non-verbal clues that your employees are
 ate an environment that allows for, and encourages, growth         sending your way. Do people whisper as you walk by or go
 for staff members. Remember that the success of a CEO de-          out of their way to avoid you? Does the environment feel like a
 pends on the success of his people, and if your people are         library, or worse, like a morgue? Strike up conversations with
 stagnant, then so are you. Development requires encourage-         various employees and notice: Do they look you in the eye
 ment and maybe even a nudge from the executive level. Now          and smile or do they squirm like they can’t wait to get away?
 don’t think that I mean for you to bring in a consultant for a     While such reactions may seem like a small matter, the CEO
 “staff development day.” While consultants are all well and        sets the mood and tone for the CU environment. Realize that
 good, nothing replaces leadership from the CEO, nor does           it’s not only employees who notice but also board members.
 it let you off the hook. Your success is dependent on your         You may see these employee reactions and office mood as
 employees growing as professionals and as people, and it is        incredibly minor, but board members will notice these subtle
 deserving of your attention.                                       and very revealing clues. They see how you interact with staff
                                                                    and use these clues to evaluate your performance. As such,
 3. The Resistance Meter                                            it makes sense that you should be the first to know if such
 I’m not referring to resistance to you as a person. What I’m interactions and reactions are less than favorable.




                                                                       Y
 referring to is more resistance to new ideas or programs.
 You can measure the work environment you have created                            ou will notice that all of these areas require one
 by gauging your employees’ acceptance of change. If, as a                        very specific action by the CEO and that is to pay
 group, they are very resistant to anything new or different, it is               attention. It is very easy to become wrapped up
 a sign of fear and insecurity. Resistance to change shows that                   in the tasks and issues of the day and let the big
 they don’t have complete confidence in you or your leader-                       picture escape you. By setting aside time to ob-
 ship skills. On the other hand, if employees are confident in serve and understand what your employees’ actions are re-
 your ability to lead and they trust that you know what you’re vealing, you give yourself every advantage. You also become
 doing, then they accept new and different ideas readily with- very aware of possible shortcomings or areas that need im-
 out much thought. It is important to note that if questioned, provement in your own leadership ability. There are no se-
 most staff members would certainly say they have complete crets or mysteries to running a credit union and the proof of
 confidence in you. That is why verbal feedback can be less your ability is abundantly clear for all to see – just be sure
 than helpful. The more insecurity an employee has the more you’re not the last one to know.
 likely she will be to just tell you what you want to hear rather         Up next in the “Credit Union BUSINESS” Leadership
 than the truth. The level of resistance is a good comparison Series: How to develop the next generation of Credit Union
 tool for the CEO to use on a semi-annual or annual basis. A CEOs.
 decrease in resistance to new ideas over time is a good gauge
 of your effectiveness and of the confidence employees have in Dee	Burks	has	more	than	a	decade	of	experience	in	the	
 your ability to lead.                                              world	 of	 financial	 services	 and	 the	 problems	 faced	 by	
                                                                    senior	 executives.	 She	 is	 a	 featured	 speaker	 at	 national	
 4. Breathe the Air                                                 conferences	and	is	currently	working	on	a	book	focused	
 It may sound overly simple, but on occasion, it can be very specifically	on	leadership	in	the	nonprofit	world.	For	com-
 helpful for the CEO to step out of the executive suite and see ments	or	questions,	you	may	reach	her	at	dee@deeburks.
 what is going on. Do a walk thorough and see if you can pick com.	



www.CUBizMag.com                                                                           June 2008    Credit Union BUSINESS       83
 >> CU SPOTLITE!


     Community Focus-
     CPCU Gets It Right!
     By Sharon Sweda




 W
                   e are entrenched in a financial environment            Historical details of the founding immigrants describe the
                   where predatory lending has become a house-      first branch as a second-floor office in Cambridge. The limited
                   hold word. Victims of the crises are not ex-     facility sustained the organization until 1974, when its full-ser-
                   cluded by class or wealth. The overwhelming      vice branch, also in Cambridge, opened. The second, and now
                   challenges facing immigrants who struggle        main, office branch opened in Somerville in 1992.
 with cultural and communicative disconnect in all aspects of             The cultural credit union is proactive about reaching and
 banking is frequently underestimated.                              serving its community. Carlos DaSilva, who handles business
       It is common for immigrants to revert to “mattress-stash-    development, is a recent Brazilian hire whose focus is the in-
 ing.” Check-cashing depots replace banks, and money orders         clusion of the Brazilian community.
 replace personal checks. This practice, erroneously thought to           Newsletters are another vehicle to connect with members.
 provide safe handling, recently came to light in the Cambridge,    Both email and print letters are delivered bilingually. The news-
 Mass., area. A Portuguese woman lost $55,000 in savings when       letters strive to maintain communication while providing valu-
 her home burned. She did not have homeowners’ insurance            able financial information.
 and lost all hope of retiring to Portugal with the earnings she          “Issues include articles regarding identity theft prevention,
 had stashed at home.                                               predatory lending and topics of concern,” explains Domingos.
       Re-educating and assisting the Portuguese, Spanish and       “We also partner with community leaders to provide seminars
 Brazilian immigrant community is the ultimate goal of Cam-         teaching the importance of banking and establishing credit.
 bridge Portuguese Credit Union (CPCU). CPCU is currently           Our ‘starter loan’ program includes assistance in obtaining a
 celebrating its 80th anniversary since its formation by 27 Por-    social security number and [in] obtaining a loan to begin to
 tuguese immigrants in 1928 and views its educational respon-       build credit in a safe environment. Many don’t understand that
 sibility as a primary civic obligation. The CP team welcomes the   you can cash checks without paying high fees or how to obtain
 challenge.                                                         other financial services [that are] necessary for financial stabil-
       The common practice of many mortgage brokers, car            ity.”
 dealers, appliance stores and others to prey upon clients with           Visitors to CPCU’s Website discover another program that
 language barriers is a sad reality. CPCU recognizes the disad-     was created in response to auto loans directed at non-savvy
 vantage immigrants suffer as a result of poor communication        purchasers. The site’s cartoon depicts a couple attempting to
 and education in financial transactions. They work to bridge       parallel-park their auto. The male initiates several failed at-
 the gap in financial services to its diverse community.            tempts before the female takes over and successfully parks the
       “Each staff member speaks three languages,” remarks          vehicle. The message? CP’s auto refinancing is for automobile
 Rui Domingos, CEO. “We cater to the area’s diverse cultural        buyers who “didn’t get it right the first time.”
 composition. It is noted that 52 different languages are spoken               Plenty of work remains to be accomplished by CPCU.
 in Somerville and our goal is to provide banking services to a     Education is an ongoing and massive project. Fortunately for
 group who is largely underserved.”                                 the members of CPCU, their needs are being well-served by a
       CPCU’s CEO is a product of the organization that builds      group who is “getting it right the first time.”
 and hires from within its community. Domingos boasts 16
 years with the credit union. A Portuguese immigrant himself,       Sharon	Sweda	is	a	freelance	writer	who	has	worked	in	the	
 he worked his way up to his current role directing the opera-      real	estate	and	finance	industries	for	the	past	28	years.	Con-
 tion.                                                              tact	Sharon	at	SharonSweda@SwedaSweda.com	to	SpotLite!	
                                                                    your	CU.

84    Credit Union BUSINESS June 2008                                                                              www.CUBizMag.com

								
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