Your members are not lab rats… DO NOT TREAT THEM THAT WAY!

And don’t let anyone else convince you to treat your members that way either!

In the course of doing brand consulting for a CU today, I learned the reason why they have a regular savings account, a $1000 minimum savings account, and a $5000 minimum savings account…. which all pay exactly the same dividend rate. It’s because this CU had a financial consultant who did some experimenting with rates to see how members would react… and this CU’s board went along with the financial consultant. Several years ago, when rates were high, the higher-minimum savings accounts yielded a higher rate. But then the interest rate environment changed, and yields were lowered. This is where the story really gets crazy… the consultant wanted to see what members would do if the rate on the high-minimum account were actually lowered BELOW the rate on normal savings accounts. Needless to say, the members voted with their feet and either left the credit union entirely or moved their money out of the high-minimum savings accounts to the regular savings account. To me, creating this situation for the members was pure insanity.

What is it that members love about credit unions that they hate about banks? That they can TRUST the credit union NOT to pull bull sh*t like this. Especially when your members work to serve a higher purpose… as in this case, being an educator in their community. These people’s lives revolve around their higher purpose… being a teacher, strengthening their community through education. They don’t have time to watch their money like a hawk; that’s why they trust THEIR credit union to do right by them!!!

So in this case, by doing what the financial consultant recommended, the credit union DESTROYED trust that will take years to rebuild, if ever. When you behave like a bank, expect to get bank-like results… the never ending chase after hot money and closing more accounts than opening them. You don’t have to operate your credit union this way… don’t let ANYONE EVER tell you otherwise… ESPECIALLY not a consultant who obviously doesn’t understand the higher calling to which credit unions answer.


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  1. Trey Reeme Says:

    Talk about a stupid move.

    You nail the reason why they’d leave: “They don’t have time to watch their money like a hawk; that’s why they trust THEIR credit union to do right by them!!!”

    Great post, Morriss!

  2. Tim McAlpine Says:

    Well put. I was in a meeting recently where the CU marketer said, “last year we offered a cashable term but this year we are going to offer a closed term.”

    I said, “Isn’t a cashable term a better product for the member?”

    “Yes, but the closed term is better for the credit union. Make that part really small.”

    Sooner or later people catch on to being taken for a ride.

  3. Lori Killgore Says:

    Extremely well stated, Morriss.

    When it comes to your money, why would you put your hard earned savings into an institution you need to babysit?

    Safety and Soundness, that’s what you look for. That’s what makes the credit union movement great.

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