by Robert McGarvey

On July 1, Sundie Seefried, longtime CEO of Partner Colorado Credit Union, makes a huge career change. On that day she resigns the credit union job to become the CEO of Safe Harbor Financial, LLC, a Partner Colorado subsidiary formed for the purpose of handling cannabis related banking.

When Safe Harbor was created in 2015, it was a groundbreaking institution for conducting compliance based banking that would satisfy regulators.  

Safe Harbor has become a big, consuming business and, said Seefried, it’s helped put credit unions into the conversation of cannabis banking – and, increasingly, that is a conversation that is being heard as more states legalize marijuana.  Included are multiple big states: California, Washington, Michigan, and Illinois. In only a handful of states is marijuana fully illegal.

In this podcast Seefried talks about the process of validating the cash that flows through a marijuana business. She also talks about the early days of Safe Harbor – and the hostility and ridicule she faced.

Who’s laughing now?

By any measure, Sundie Seefried has emerged as the queen of cannabis banking.

What would her father, a Baptist, missionary think about this? We ask her.

Just as we ask about that uncommon first name, Sundie.  

We ask about being perceived as a maverick in a credit union industry that does not always revere its mavericks.

The one question she is asked that she doesn’t answer is the question, are there plans to take Safe Harbor public?

Her podcast with CUInsight is mentioned. Here’s a link.

Reference is made to how much it costs to open a Dairy Queen franchise – and surely you want to know how that came up.  Listen for it.

Earlier CU 2.0 cannabis related podcast guests include Paul Stull, also multiple guests on two long cannabis podcasts, episode 20 and an early unnumbered show.

Listen up. This is a fun episode.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

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Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

Jim Blaine on how credit unions can win…

by Robert McGarvey

In a wide ranging, 90 minute interview, retired State Employees’ Credit Union CEO Jim Blaine offered up a provocative look at possible tomorrows for the credit union movement.

The throughline is simply: Quō vādis? – Where are you going?

In 2000 there were over 10,000 credit unions. Now there’s a smidge over 5,000. That math is brutal. But it is fact. 

This is where Blaine’s insights come in. His views are ultimately optimistic because what he sees is how a credit union can win. He knows a lot about that.

Blaine, who served as CEO from 1979 to 2016  of what became the nation’s second biggest credit union, grew the institution’s assets from $300 million to $33 billion. He left a strong foundation; SECU now has over $47 billion in assets.

And nowadays, when Blaine looks around the credit union universe, what he sees is a highly talented, youthful pool of c-suite credit union executives. They have a lot of tech smarts. That is good news. The bad news is this: “I wonder if many are looking at a credit union more as a business than as a cooperative.”

A commercial bank, bluntly put, is in business to profit its shareholders. Period. A cooperative, by virtue of that status, commits to seven cooperative principles that date back to the 1844 Rochdale cooperative. Among the principles: democratic member control; cooperation among cooperatives; concern for community.

Every US credit union is a cooperative, those principles are its principles. And they are also non-profits. Credit unions exist to benefit their members and their communities.

Nothing could be more different from those principles than a commercial bank’s bedrock purpose and, says Blaine, those differences are the building blocks that pave the way to credit union success.

Continued at CUInsight.com

Hear the CU2.0 podcast with Blaine here.

 Start today, really embrace AI – artificial intelligence, where machines think and they are good at it when fed enough of the right data – and, guess what, you are already four or five years behind the leaders and that group includes most of the money center banks and maybe even a few credit unions.

Sounds gloomy? Well, it is, kind of, but CU2.0 founder Kirk Drake is here with a new book, FinAncIal, which aims to tell credit union executives what they need to know about AI and also what they need to get doing, right now. This book is not so much about theory as it is an action manual and, know this, AI is something every credit union needs to be exploring right now.

The good news is that there are many hundreds of AI focused fintechs that are actively hunting for credit union customers.

The better news is that those fintechs can be met through the CU2.0 Mastermind Group.  Drake talks a bit about the CU mastermind in this podcast – and he and a few members exhibit a bit of what it’s like to be in one in this podcast, #121.  An earlier podcast – #106 – lets Drake and executive coach Dr. Patty Ann Tublin talk about what a mastermind group is and how it works.

But back to AI.  The Matrix is now and you can choose the blue pill (blissful ignorance) or the red (confronting the sometimes unpleasant realities ahead ) abut the deal is that AI is the red pill and it is the future no matter how many blue pills you munch.

Why do so many credit union execs want to dodge the unpleasant uncertainties of embracing AI and the wholesale institutional changes it will deliver? We talk about that in this podcast and a lot of it is simply that credit union people are nice people but they sometimes don’t want to dive into changes that will discomfit many.

Except with AI there is no choice. It is coming your way no matter how tightly shut your eyes are.

In the podcast Drake tells why – and what you need to get doing, like this afternoon.

Buckle up, it’s a fast ride.

Listen here.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

What’s the Credit Union Response?

by Robert McGarvey

New research out of Juniper smacks most credit union leaders in the face. That’s because 50% of us now say we would consider switching to a digital-only bank. Indeed, many households already are actively contemplating a move to a digital-only bank.

Face this reality: Very soon it will be one whole year in which many of us have not set foot in a branch. And you know what? We have satisfactorily done our banking despite that abstinence.

Many, the Juniper survey says, now believe there are no compelling reasons to want to go back to in-branch banking when the pandemic threat passes—which, by the way, won’t be until year-end 2021 (and maybe, if the variants prove hardy, longer than that). Some have deluded themselves in thinking that a day is coming, and soon, when, click, a switch is thrown and suddenly, as in a Twilight Zone-style slice of life, we are thrust back into our 2019 lifestyle… which for many credit union executives means in-branch. It ain’t happening that way.

by Robert McGarvey

 You may think you have it tough managing a credit union in the pandemic.  You need to talk with David Tuyo, CEO of University Credit Union, with assets edging up towards $1 billion and a growth rate in loans that’s running around 30% per year.

2020 too saw sustained growth – in assets, loans, and even members.  That’s despite the reality that University serves a membership of what the name suggests: colleges and universities, mainly in California, some faith based (St. Mary’s College in northern California and Loyola Marymount in Los Angeles), others large publics (UCLA and University of California Irvine).  The kicker is that California colleges were closed for much of 2020 due to the pandemic and yet University grew.

And every University branch was closed. Still it thrived.

How? Tuyo tells in this podcast.

The credit union had had a multi-year plan to go full into digital.  What had been envisioned as a three year transformation took three months.

He also notes that University’s compensation is entirely team based – that is, raises are a result of the organization’s performance.  Not the individual’s.

Another Tuyo word of advice: now is the time to let your nerd out.  He means dig into and revel in the data. Really know your members and prospective members, what they need and want.

At around $875 million in assets, can University survive? Tuyo says his benchmark is that he wants the credit union to perform at the rate of a $2 billion institution.  That, he thinks, is the velocity that is needed to stay competitive in a world where a handful of big banks control half the banking in the U.S.

Along the way mention is made of a CUBroadcast show he did.  It’s linked here.

Listen up.  

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey

 Know this about Pete Crear: He was the first to win the lifetime achievement award from the African American Credit Union Coalition – and when they gave him the award in 2003 they decided to name it after him.  

The roster of Pete Crear Lifetime Achivement Award winners is now a dazzling hall of fame of credit union heroes and heroines, including several who have been in the CU2.0 Podcast – Bill Bynum and Bert Hash, Jr.  

The podcast opens with how Crear felt when he was told that, not only did he win the award, it was now named after him.  You will like his authenticity.

Just who is Pete Crear?  Here’s the press release that went out when he retired as CEO of WOCCU, the World Council of Credit Unions.

The release noted: “Prior to joining WOCCU, Crear was CUNA’s executive vice president of external relations and, before that, executive vice president and chief operating officer responsible for daily operations of the Madison, Wis., office. He also served in top leadership positions at the Indiana, Connecticut and Michigan credit union leagues.”

Crear also is of an age where he saw the nation change.  He vividly remembers the impact of Lyndon Johnson’s Great Society legislation that made civil rights a legal reality, not just a talking point.

And he remembers the job discrimination he encountered when he applied for his first adult job.  

Does he think matters are better now for African Americans – both credit union members and employees? Listen to the podcast for his answers.

In the podcast Crear mentions a CPA he worked for early on, Richard Henry Austin, who went on to serve as Michigan’s first African American Secretary of State.

He name checks Bucky Sebastian – a past podcast guest – for helping rid NCUA of regulations that made it harder for African Americans to borrow.  

Crear also tosses a praise bouquet at Angela Russell, a CUNA Mutual executive, and Cliff Rosenthal who literally wrote the book on CDFIs.  

One more name to mention: Renee Sattiewhite, CEO of the AACUC and a past podcast guest.  

A last fact to know about Pete Crear: this is a very good natured man.  He laughs.  He shares himself. And he wants to make the world a better place.

Listen up.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey

 Overdraft fees are big business for most financial institutions and it’s estimated that 20% of credit union members, one in five, have an NSF annually.

The worse news is that the credit union’s NSF fee is just the start of the consumer’s pain.  Joel Schwartz, founder and co-CEO of DoubleCheck, a Los Angeles company with an innovative spin on how to best handle NSFs, estimates that the NSF can lead to perhaps $175 in ripple charges such as a returned item fee imposed by the payee of the bounced check.

Ouch.

DoubleCheck has an alternative – and, hold on you protest, your institution wants to maintain its NSF income, especially in today’s economy where loan interest rates are anemic.  

Schwartz gets that. He describes DoubleCheck as the financial equivalent of traffic school in the context of a speeding ticket.  Go to traffic school and, usually, that wipes out the pain of an increase in insurance premiums.

What DoubleCheck’s tool does is offer the consumer realtime options for dealing with the consequences of an NSF such as offering the opportunity to use a credit card to make good on the check or ACH, therefore it doesn’t look like a bounced item to the payee. Whoosh, that $175 in ripple charges may vanish.

DoubleCheck charges $20, an amount it typically splits with the credit union – so in fact the credit union income goes up.

Sounds good? It gets better. The DoubleCheck tools – which make the NSF process transparent to the consumer – may help a credit union duck class action suits that claim discriminatory processing of NSFs.   

There’s a link in the show notes to a recent Navy Federal $16 million settlement involving NSF charges.

There’s also a class action suit in progress. Link in the show notes.  

Meantime, Schwartz predicts there will be Congressional action to limit NSF charges, a topic of much interest to Senator Cory Booker. See the link in the show notes.  

DoubleCheck tools may help a credit union recoup some income that may be capped by federal action.

Mentioned in the show is SECU’s NSF policies. The charge is $12 but the member gets a two day window without charge to clear up the issue.  (Here’s a link to a podcast with Jim Blaine, the retired SECU CEO.) 

Listen up.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com

And like this podcast on whatever service you use to stream it. That matters.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

by Robert McGarvey

The recent Harris Poll numbers are a splash of icy water on our faces: three in five Americans believe identity theft will likely cause them financial loss in the next year.

That is a finding of a poll done for the American Institute of CPAs.

That number is up from the 50% who in 2018 said they feared a likely loss due to identity theft.

Partly, the jump seems to be pandemic related—there just are a lot more online scams in the internet ether—and partly, too, it’s because all of us are shopping online much more than we had, also because of the pandemic.

Immediately, too, blaming fingers are pointed at consumers. How dumb are we? How do we let this happen?

Continued at CU2.0

By Robert McGarvey

Just maybe the best bank for your startup is not a bank at all but a credit union. That’s the advice of Rob Stephens, founder of CFO Perspective in Spokane, Washington, where he provides financial consulting for small businesses. “You will get all the benefits of a community bank but better rates,” he explained.

Stephens knows. He has worked as a CFO at several community banks and also put in a 6+ year stint as a senior vice president of finance at a credit union. And he is adamant that, in many cases, a credit union is the better place for a small business to bank.

Continued at Startup Savant.

By Robert McGarvey

Breach Clarity, a startup from onetime Javelin Strategy + Research co-founder Jim Van Dyke, is about to change how organizations talk about their data breaches – with a loud emphasis on increased transparency, reduced opacity.

Breaches are commonplace. There are four significant ones daily, says Van Dyke. But that does not mean the public knows much about them. Ask any cybersecurity journalist what they do not like about organizational breach press releases and the short answer is everything. That is because opacity – saying as little as possible and offering few details – is the operating philosophy. 

One fact: confused and frightened consumers want more facts about breaches and how they are impacted.

Scoring the Severity of a Breach

Enter Breach Clarity which aims to do three things that are game changing: it scores a breach on its severity, from 1 to 10; it tells an individual what he/she needs to do to protect himself if caught up in a specific breach; and it will soon offer a score of an individual’s risk of being a fraud victim with scores ranging from 1 to 100.

As for the action items Breach Clarity suggests, they will be specific to a particular breach and to an individual. Some breaches set up some individuals for IRS fraud, for instance. Others set up some individuals for new account fraud. Still others often will lead to attempts at account takeovers.  There is no cookie cutter advice. Customization and personalization are what Breach Clarity aims to deliver.

A fourth thing may be even more game changing: Van Dyke, whose Javelin claimed many mega banks as clients, is marketing Breach Clarity as a value add for credit unions to offer to their members.  He already claims one customer – BCU (formerly Baxter Credit Union), the nation’s 56th largest with around $4 billion in assets.  

According to Van Dyke, although BCU is offering Breach Clarity as a free tool to members, it nonetheless forecasts a 5X ROI.  How? Reduced fraud losses – financial institutions, says Van Dyke, absorb the bulk of the losses due to data breaches and the hope is that an informed membership will be better able to take steps early to minimize fraud.  

Van Dyke also says there will be a reduction in member calls for help to call centers – and financial institutions relate that after heavily reported breaches they are swamped with SOS calls.  Fewer calls mean lower costs.

Phase 2 of Breach Clarity’s marketing plan is to expand the focus to national and large regional banks.

Consumers Want This Help

Van Dyke also says that consumer research done by Breach Clarity found a surprisingly robust appetite for such tools among Gen Z and Millennials.  Interest is also high – and expected – among Baby Boomers.

Where does Breach Clarity get its breach data? Via the non profit Identity Theft Resource Center, says Van Dyke, who sits on the ITRC board.

Eva Velasquez, CEO of ITRC, said: “The ITRC is honored to partner with Breach Clarity and provide more meaningful information to consumers and data breach victims.  The biggest challenge breach victims face is understanding the risks associated with a particular breach, and what steps they should take next.  Breach Clarity, powered by the ITRC’s data breach data, addresses this challenge by providing an intuitive risk score accompanied by essential action steps.  We are proud to be a part of a no-cost solution that brings much needed clarity to the victims of data breaches.”

The analytics that score breaches on severity and generate custom corrective steps are results of Breach Clarity algorithms. 

Three Steps That Must Be Taken

Here are three steps every organization that suffers a breach needs to take to prepare for demands for more transparency and clarity about breaches:

*Ditch the opacity in breach related press releases.  Aim for more transparency, especially around what data was stolen, over what timeframe. 

*Breached organizations need use cybersecurity writers to polish releases.  By all means, involve lawyers and cybersecurity technicians. But writers specialize in the communication skills that will add much needed transparency.

*Be transparent about the cybersecurity steps that the organization has taken.  Don’t give cyber crooks a road map but do disclose to the public information that will help restore confidence.

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Hear a half-hour podcast with Jim Van Dyke here.