While hanging around the GAC this year, I caught up with my friend Jamie Chase, Owner & Instigator of Goodness (yes, that’s her title) at CU Strategic Planning. During our talk, she brought me up to speed on her latest passion project, the American Debt Relief Challenge, built around this idea:

It’s not fancy. Just a simple truth. Not-for-profit credit unions have lower credit card rates than big, for-profit banks. When you transfer your debt to a credit union, more of your monthly payment is applied to reducing the debt and less to cover a high interest rate. It’s the easy and honest way to save a lot of money.

Here are some highlights from our conversation -

me: So what’s the backstory on this project?

JC: Over that coffee my friend Scott Butterfield described a balance transfer program which saved the average family $200 a month. Holy wow! That’s a car payment or station wagon full of groceries for most families. Credit unions across the U.S. are running balance transfer programs. What if we measured the national savings?

So we reached out to as many smart people as we knew at the time to help create the American Debt Relief Challenge.

me: How does it work?

JC: Credit unions have lower rates than for-profit banks. (The average mega-bank default rate is 26.8%. No credit union I know of has a default rate of 26.8%! ) The average consumer makes one late payment a year and average people with decent credit are punished by these default rates.

When the average consumer transfers their cc debt to your credit union, more of their payment is applied to reducing the debt and less to cover a high interest rate. The average total savings over the life of the card is $13,000. National media covers the millions saved, local papers cover local CU stories. The truth in the news shows consumers they can get help from credit unions.

Along the way, credit unions attract new members, help more consumers and grow net revenue.

Credit unions can join the ADR Challenge without changing anything. We’ve kept the reporting easy. Participating CUs just have their card processor send us their weekly or monthly balance transfer report.

me: I’ve noticed that most of the do-gooding by credit unions is woefully undercommunicated. How are you and they going to get the word out about this?

JC: The millions saved is an easy media pitch, and we’ve got credibility firepower. Filene Fellow, Robert Manning PhD. author of Credit Card Nation is taking the ADR Challenge to the national media during his regular interviews. Just yesterday he was on NPR talking about the ADR Challenge.

Speaking of, if you’re doing balance transfers already, but want to do it even better, you’ve got to check out Manning’s Responsible Debt Relief Algorithm. We encourage credit unions to use it as new means of underwriting.

We also have widgets for credit unions and leagues. We roped former NASA employee, now CU tech guru, Jason Green into making an interactive savings map and ticker widget that shows the millions credit unions are saving consumers nationally, by state and by credit union. Your widget shows the amount your CU is saving members.

me: You seem really jazzed up right now.

JC: I’m really passionate about this. It’s credit unions helping people to help themselves in a desperate time. It is our chance to do something to make a difference right now, to make life better for our neighbors and members. ADR is the credit union philosophy in action: service, social responsibility, financial education, cooperation. It clearly depicts credit union pure goodness. It strategically grows loyal credit union members and increases credit union revenue during this corporate stabilization debacle. It will save at least one credit union from PCA by increasing net revenue.

Do you think any member we save from the predatory default rates of the mega banks will forget what we’ve done for them? No, they will stay with us and better understand why we are different.

. . .

Amen. Thanks, Jamie!

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Jamie Chase, CUDE, is an owner and instigator of goodness of Credit Union Strategic Planning. She is a former PBS producer and was previously the communications director for the Washington Credit Union League, where she introduced the Biz Kid$ PBS program to the credit union movement. Jamie has done PR for the World Council of Credit Unions and is known for her advocacy of active credit union elections as a membership growth solution.

This is a gorgeous video by Jonathan Jarvis explaining this mess.

This video was part of his thesis, which he describes like this:

The goal of giving form to a complex situation like the credit crisis is to quickly supply the essence of the situation to those unfamiliar and uninitiated. This project was completed as part of my thesis work in the Media Design Program, a graduate studio at the Art Center College of Design in Pasadena, California.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

This might be a handy link to share with your members who, despite the ubiquitous, if a little sanitized, coverage might still be feeling uninitiated.

Thanks to targeted Google ads, I came across the FDA’s novel use of and embedded widget. It’s not the prettiest – looking very utilitarian as I suppose it should. It is a governmental widget after all. It does make it easy to place into sites onto news sites, blogs and into stories; and it stays continually updated.

Point being: the government’s using a technology formerly reserved for sharing videos of skateboarding dogs, novelty bands from New Zeland and stick figures touting the benefits of credit unions.

I’m off to make a sandwich.

UPDATE: Oh, and they’re Twittering, too.

OK, I need some candid information from the credit union and financial industry braintrust that reads this blog.

The Economy is doing some pretty squirrelly stuff right now. Politics aside, the Bailouts seem to only be prolonging the inevitable. Surely there are some of you CU folks with greater insight into this mess. How bad is it going to get? For real. And I’m not asking you to tell just me.

CUs seem to be the only financial institutions left that have any trust. How are you using that trust to prepare people for what may come: very hard times? I hear people on TV saying Obama & Co. can turn it around. Super. I really hope they can. I’m rooting for them so hard. But I hear other people burying 20-pound bags of rice in their backyard, and these are NOT the usual crazies whose inane babbling is easy to write off, they are people whom I respect, sharp, sane, wise.

It seems like a great opportunity (responsibility?) for CUs to come out and say, “Here’s how you can act now to keep it from going bad.” Or “Candidly, it is going to get pretty hairy for a lot of people, so here are some practical ways you can prepare to weather it well.”

And I’m not talking about re-explaining “freer checking”, I’m talking about getting real with people about what they can do to prepare for what might be harder times than our country has ever seen. If CUs are truly dedicated to their communities this seems like a great time to commit to being about the “whole man”, to really being in this thing together.

People are looking straight answers. If you know something that will scare them – and I mean scare the living tootsie rolls out of them – will you tell them? Then, will you tell them how to do something about it? If you do, if you are on the level with people in ways no one else will be, then, when it does swing back around, they will never forget who kept their trust, who helped their families by saying some hard, scary things, then helped them process those things sanely. And they will remember it a lot longer than that free iPod.

Jeff has been talking about word-of-mouth in his last two posts (with more to come). But word-of-mouth doesn’t just happen when your members are happy with your services, it also happens when people are scared.

So, please, tell me what you know, then tell me how you are going to tell your members the same thing.

Currency Marketing announced today that the Young & Free program is now available to credit unions across the U.S.

Interested credit unions – or in some cases, state leagues – will receive a regional license on a first-come-first-serve basis (ex: “Young & Free Wisconsin”).

Has Young & Free Alberta been successful for 52,000-member Common Wealth CU ? Here are some numbers. In eight months:

• Over 1,900 Young & Free Checking Accounts opened.
• Average account balance of $1,422 in an account that pays no interest (they were hoping for $250 per account).
• Total in market PR-value of over $200,000 (calculated from print, online, radio, and tv articles/segments, brand mentions, and impressions).

I think replicating the success of Alberta’s program will be based on three things:

• Finding the right personality to represent each region. Larissa is a jackpot of creativity and charisma, will other CUs be so lucky?
• Providing spokesters with the perfect tightrope of freedom and direction. This is a high-engagement campaign, both for consumers and involved credit unions.
• Tying in a unique product. Common Wealth’s product, a free checking account, is hugely novel in Canada because they’re one of the only FIs to offer free checking. The U.S. market will need something a little sweeter.

That said, this program has the potential to tackle the CU “national brand/awareness” issue by digging in on a grassroots level. It’ll be like dropping paratroopers of relevance throughout the U.S.

For more details, check out Tim’s announcement post from earlier today.

I’ve read a few posts across the financial blogosphere about Starbuck’s user-generated idea site, MyStarbucks Idea, and its relevance to financial institutions as a channel into consumer insight another way to listen.

As usual, the good folks at Vancity are ahead of their game with weallprofit.vancity.com, a (beautifully designed) user-generated idea site that launched months ago.

Their explanation of the site and philosophy hits the nail on the head:

You can call us a financial institution, you can call us a credit union, you can even call us a bank. But the truth is, when it comes right down to it, we’re really just in the business of ideas. An idea for a different way of banking is what got us started. It was the idea of profit sharing that made us grow. And today, it’s the innovative ideas that help make our members financial lives easier and our communities stronger. In short, through good ideas, we all profit.

At Vancity, we believe good ideas can come from anywhere. Which is why we always like hearing new ones. If you have an idea you’d like to share, then by all means, put it on the wall.

Well said.

Vancity’s William Azaroff says the site will be getting a facelift in the next several months. I’m looking forward to the action if/when they begin to implement the ideas they’re collecting.

(Starbucks site via Jim on Netbanker, Robbie on the fi-linx blog, and Brady on Grow Your Bank)

On March 31 we can put a nasty, nasty baseball offseason to rest and enjoy watching the boys of summer. That’s opening day. The best day of the year. The day in which, if you call me, I might answer, but I won’t be able to hear you over the crowd.

It’s a day of optimism. A day of hope. Everyone’s in first place.

And what better way to celebrate the season, the real American pastime, than to muddy it up with a bunch of numbers and statistics, then take those numbers and statistics and compare them to other people to see who’s numbers and statistics were better?

In other words: Fantasy Baseball. And everyone is invited to play.

Trabian League Baseball is back with the Fighting Inbred, owned and managed by yours truly, defending its crown and trophy: The Badger Mutual Insurance Jim Gantner Trophy (radio voice: “Badger Mutual Insurance, Protecting People’s Dreams Since 1887”)

The URL is: http://baseball.fantasysports.yahoo.com/league/trabianleaguebaseball

The ID is: 178173

The password is: posada

Be warned, though. In the offseason, I’ve been preparing for the title defense by taking what I think is Flaxseed Oil and having Brian McNamee stop by and inject me with what I think is B-12 and Lidocaine.

I’m pumped.

This week I’m at the CUNA Governmental Affairs Conference. It is enormous.

I’m here working with the NCUF’s REAL Solutions to hunt down CU industry thought leaders and record their thoughts on the conference, and, in particular, gather insights on serving low-income consumers.

We’re documenting the conference through video interviews, podcasts, and photos which are all viewable (with more to come) at realsolutions.coop.

One of our chats was with Doug Fecher, CEO of Wright-Patt CU. In this video, he unpacks the story of a vocal low-income member and how it lead to their payday lending alternative StretchPay:

Also, CU Communicator Jeff Hardin and Boardcaster Ginny Brady have been covering the conference on their blogs as well. Definitely check them out.

And if you’re in town, come hang tonight at the TwittaBloggerSocial Meetup – going down at Capital City Brewing Company.

A few days ago, on another web service a few of us have been playing around on (read: researching), Gene Blishen posted an event reminder for Northern Voice 2008. What is it? From the Northern Voice site, “Northern Voice is a two-day, non-profit personal blogging and social media conference… .”

Mt Lehman Credit Union, home of Gene, has sponsored the event for the last three years and has promoted it in an interesting way. They hired a local(asterisk) street artist named Basko5 to design the event posters.

At first, I liked the idea because the poster was so rad, then I found out there was more to it than just fun and sass, which is when I liked it even more.

I asked Gene to tell me more about it. Here’s what he had to say:

This was a Vancouver event with a number of well known bloggers and Web 2.0 industry types attending (Scoble, Siffray, Bray, Hardin). How do you market to savvy bloggers? We thought that anything “in their face” wouldn’t fly so we thought to use a local street artist to develop some artwork and then use it (posters, stickers, buttons). Basco5 (who is my youngest son) said he would be interested and unknown to me was very popular with a group of these bloggers. It fit perfectly.

All of these items [posters, stickers, buttons] are gone in the first day. The posters are hot items and we only give out 3, saving a few for some of the volunteers and guest speakers…

The poster this year even took on a social media aspect, Basco5 put the poster up on flickr and invited comments for completion. That worked wonderfully. After all is said and done what do we get? Fantastic word of mouth, and from that more queries about Mt. Lehman as well as positioning us as part of the local blogging community.

The only birds not killed with this stone are the ones in the poster. What a great, specific way to get involved in your community using social media.

Another great example of specific involvement is how The Lower East Side People’s Federal Credit Union handled their graffiti problem. Since repeatedly washing it off the sides of their branch wasn’t deterring the vandalism, they reached out to a local graffiti artist to paint murals on it.

This solved their vandalism troubles because, out of respect, graffiti artists don’t vandalize each other’s work (Irony Alert!). Additionally, and more importantly, they reached out in a way that was specific to their community.

In The Lower East Side’s case, they didn’t use social media, but the spirit is the same. They embraced and celebrated a thing that represented a point of stress due to its being unknown, hard to control and not at all bankish. If you think the ROI of a blog is hard to justify to your board, imagine trying to convince them to commission a professional vandal to paint your branch.

Credit Unions are community specific, and communities aren’t always involved in the types of safe, measurable things bankers are. Blogging may not be right for your credit union. If so, asking your Marketing Director or CEO to start a blog doesn’t make any more sense than asking them to pick up a can of spray paint. But if those are the things your specific communities are involved in, then meet them there one way or another.

How are you making yourself visible in your communities in non-bankish ways?

(asterisk)He was local until recently, when he moved to Copenhagen, Denmark.

The Aite Group LLC reported that 33 percent of credit unions with over $100 million in assets are planning to convert to mutual savings banks. Likely these converted credit unions will ultimately become for-profit, stockholder-owned financial institutions.

One-third of this class of credit union represents $193.8 billion in assets, assuming the 33 percent of converting credit unions is spread across the 1200 representative credit unions in this class evenly. In turn that represents over a quarter (27 percent to be exact) of all credit union assets. One-quarter of the money in credit unions is on its way out the door.

In 2006, fee income exceeded return on average assets (page 4 of the 2006 report, if you’re interested) credit union-wide for the first time ever as CUs looked for ways to replace money drained away by compressed interest margins. Banks are using the same tactic.

At the same time, Nobel Peace Prize winner Muhammed Yunus is considering starting a credit union in the U.S. There are movements of varying size and momentum, but movements nonetheless, to provide alternatives to banks through such things as peer-to-peer lending, democratically-run, socially responsible banks, and account aggregation and financial planning using social networks.

Isn’t the message credit unions preach differentiating themselves from banks now even more relevant – even hip?

So, then…why leave?

The Wall Street Journal published an article titled “Beyond Payday Loans” last week, written cooperatively by political cartoons Bill Clinton and Arnold Schwarzenegger.

In the article, they discuss the $8 billion problem of payday lending.

Here’s a snippet:

Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists: helping the “unbanked” enter the financial mainstream by opening checking and savings accounts, and working collaboratively with financial institutions and community groups to develop and market products that work for this untapped market. This will put money in the pockets of individuals and grow the economy. And it won’t cost taxpayers a dime.

Is it just me, or do Bill and Arnold seem to be channeling the credit union philosophy?

Two credit unions tackling the problem are Wright-Patt CU with their StretchPay loan and Prospera CU, with GoodMoney.

StretchPay is a short-term loan of either $250 or $500 available to Wright-Patt members. The loan comes with a low 18% APR, and is payable over 30 days.

GoodMoney, with branches located in Goodwill stores, offers short term loans at half the rate of the average payday lender, lower-fee check-cashing, bill payment options, wire transferring, and financial education through Goodwill’s Financial Information and Service Center.

Check out this video on GoodMoney from the 2007 Herb Wegner Awards:

Both initiatives stem out of the National Credit Union Foundation’s program REAL Solutions. Full disclosure, REAL Solutions is a client of ours – it’s how I’ve been exposed to some of the awesome things they’re doing for the movement. REAL Solutions is helping credit unions develop products to serve low-income and unbanked consumers.

When we were discussing this, Charlie asked this question:

Are CUs really helping people by making it easier and the rates lower, rather than helping people get into a better financial habit?

I think offering attractive alternatives to predatory lending is step one in the process, but it is kind of a band-aid on the greater question – How do you truly effect people’s financial behavior? Can it be done?

(Also, hat tip to Payment News for highlighting the WSJ article.)