By Frank J. Diekmann
A barrier to mergers that often isn’t discussed. A merger feature that often isn’t practiced. What power drills can teach us.
That and more has either been recently reported in CUToday.info or discussed during credit union get-togethers. Here’s some of what you might have missed.
A Merger Obstacle Seldom Acknowledged
Glenn Christensen of CEO Advisory Services shared an interesting finding when it comes to mergers.
“We are about to release a study from a survey of credit union CEOs that does indicate a lot of barriers still exist,” Christensen told CUToday.info. “Those obstacles, however, tend to be more emotional than rational.”
He said the most prevalent reason for mergers being nixed are egos.
“Whether that be on the board or CEO level,” said Christensen. “That’s pretty enlightening, when the CEO and the board are aware their egos are a major hurdle,” he said.
For 2019, Christensen expects mergers will keep to their traditional pace of about 3% of all credit unions merging out annually—about 200-250 per year today. Christensen noted, however, if a recession hits, that the number of CUs merging out will increase.
A Merger Practice Seldom Seen
Speaking of mergers, CUToday.info reports on all merger activity, but one practice we don’t report often—because it happens infrequently—is paying the employees of the merging CU some sort of bonus as part of the deal (and no, this doesn’t mean any senior managers or board members getting a special insider deal). In this case, All In Credit Union in Daleville, Ala., which just changed its name from Army Aviation Center Employees FCU, merged with Wiregrass Credit Union. In announcing that no employees would be losing their jobs, it further added that employees are also to be paid a loyalty award based on a percentage of an employee’s salary, total years of service, and other criteria.
Drilling Down Into Trivial Data
If you pay attention during a credit union conference you never know what you might learn. Sure, that registration fee you paid is supposed to get you insights into lending, marketing strategies, balance sheet management and the like, but the real value, obviously, lies in the trivia.
Consider this knowledge nugget from one recent meeting, during which I learned there are approximately 80-million power drills in the United States, and during their lives they are used for an average of about 13 minutes in total. Unless you work in construction or assemble kids play sets as a hobby, how much time do you really spend using a power drill?
The power drill trivia wasn’t offered randomly; rather, it was part of a broader context discussion on the “as-needed” economy. In the future, one person predicted, when you need an item like a power drill you will use an app to order it, a drone will deliver it, and then it will return it when you’re done, all for a rental fee.
One thing that will not change: You will still be left with one extra screw and no idea where it goes.
A bonus piece of trivia: 3D printing will impact an estimated 320-million manufacturing jobs, and in the process create “lights out factories,” according to one person. What’s a lights out factory? It’s any facility that is home primarily to robots and machines that don’t require lights to “see.”
A History Lesson
Speaking of power drills, in this case to be used to affix a plaque to the wall in the CU History Museum about a CU that served the place we used to buy our drills: According to Mark Smith, CEO of Sears Spokane Credit Union, there were once 27 Sears credit unions throughout the U.S., Smith says, each independent from one another. The Sears Spokane institution was the last of those credit unions to remain open.
A Slow-Motion Robbery
There are quick in-and-out robberies, and then there is this. During a recent discussion, one credit union executive shared how her CU believes a suspected hacker or hackers was/were inside its systems for as long as five years, working to create a bogus profile for a “stellar” member. In what is known as bust-out fraud, it then used that stellar member profile to commit loan fraud.
The lesson: Never length of membership fool you into believing an account is legitimate.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.infoor followed @FrankCUToday.