Posted by Alison Barksdale, AVP of Mktg, CU Members Mortgage on 5/3/2018

Remember playing softball as a kid? You’d be in the outfield and end up kicking stones most of the game. Then, all of a sudden a ball would fly your way and you’d position yourself just right to catch it. As you stood there, you would tell yourself don’t drop the ball, don’t drop the ball, don’t drop the ball. Really, all you were hearing was “drop the ball” over and over in your head. Go figure you would end up dropping the ball.

Self-talk has a huge impact on the way we view ourselves and how we push ourselves to reach goals. It affects how we motivate ourselves to move forward and it can deter us just the same.

In the world of loan officers, it can help you talk yourself into making the call, or it can deter you from asking for business. You can justify why you aren’t prospecting more and create self-doubt which prevents you from taking the steps to grow your business. The reluctance created affects your service levels, reaching your goals and your overall success. So, how do you push past this reluctance that’s holding you back? Here are some easy steps towards focusing your mindset for success.

Change the Conversation

You can’t move past reluctance, if you don’t change your self-talk. It’s replacing your negative “don’t drop the ball” to something a bit more positive like “catch the ball” which encourages your actions to reflect your mindset. Imagine how many times you’ve told yourself not to do something, which is exactly what you ended up doing. By changing your inner conversation with the specific action you want to do, you will position your mindset with achievement.

Create a Plan of Action

By creating an action plan and holding yourself accountable you can push through your hesitation. Every Friday create a plan of action for the following week that includes specific actions you will take toward your goals. For a loan officer, it might be scheduling two appointments the following week or making two follow-up calls. Set your action or goal and complete it, and as you push past your aversion, grow your goals to include more. Put the actions on your calendar to help hold you accountable. Do whatever motivates you, to keep the plan of action.

Create a Script

If part of the reason you are reluctant to ask for business is a fear of being pushy or fear of the phone conversation itself, a script will help you think through what you want to say and help you be more confident in your message. This doesn’t have to be a cookie cutter approach to conversation. It is simply a foundation to keep you talking and push past any fear. Remember, you are a brand ambassador and you need to let others know who you are and what you have to offer them. Find confidence in your script by using positive language and phrases that get you excited about your brand.

Find a Way to Compete

Sometimes all you need is a little friendly competition to push yourself to where you want to go. It might be that you have a co-worker that struggles with the same obstacles you do and you can work together to push past them with a friendly competition. It might be a department that struggles with specific tasks or deadlines that you want to improve. It could be a specific self-improvement you want to make and setting a specific goal and deadline will help push you there. Competition can motivate you past any reluctance you have.

Reluctance and self-doubt impede your success more than you realize. They become a silent barrier that sneaks up on you and throws you off course. If you implement ways to push through these challenges, you’ll find it easier to reach your goals.

Categories: Business Partners, Marketing & Printing, Sales & Service
Posted by Mr. Jim Griffis, Regional Director, John M. Floyd & Associates on 5/1/2018

By Jim Griffis, Regional Director, John M. Floyd & Associates (JMFA)

There are myriad reasons why organizations fall behind when it comes to updating their products or improving existing services. Regulatory uncertainty, budgetary constraints, insufficient staffing, technology concerns, outdated business philosophies and a fear of the unknown are reasons I often hear from credit union leaders who aren’t satisfied with their existing performance. Yet often they are hesitant to revisit their overdraft program strategy to increase revenue and improve member service.

But maintaining the status quo in an increasingly competitive industry can have far-reaching consequences. And the results may not only negatively impact the credit union’s performance, but also prove detrimental to its workforce and the level of service provided to members.

For instance, while waiting for new regulatory input on overdraft strategies over the past several years, some institutions have allowed their program to become stagnant or have decided to forego implementing a compliant overdraft solution until a final ruling was announced. As a result, many existing programs are most likely outdated which creates increased risk for examiner scrutiny and sub-par results. Both of which can be perilous in regard to reputational and competitive capital.

Following are a few examples of the cost of complacency when it comes to your overdraft strategy:

1. Failure to meet members’ financial services needs

Let’s face it, if you aren’t offering an overdraft service, your members are going someplace else when they need funds – whether to your competition, a high interest rate short-term loan, a payday lender or something else. Not only is this diminishing your value as their financial institution of choice, someone else is benefitting financially from your members. 

A disclosed overdraft program offers consumers an option they can use in the event they need additional funds or make an error in their checkbook. If they don’t use it, they won’t ever be charged a fee. The important thing is, when they do need it, it’s there. And that is the kind of reassurance that many consumers value today.

2. Non-disclosed programs risk regulatory and legal exposure

The recent release of the Consumer Financial Protection Bureau’s five-year strategic planany new rulings a priority at this time, credit unions still need to be vigilant in regard to maintaining fully disclosed overdraft procedures.

During the past few years, there has been an uptick in activity related to consumer litigation against financial institutions for using unfair and deceptive practices, such as: 

  • failing to obtain affirmative opt-in consent from account holders before charging overdraft fees on ATM and electronic transactions;
  • utilizing misleading advertising practices that don’t disclose fees;
  • re-ordering transaction processing that results in maximizing overdraft charges; 
  • implementing sales incentives that encourage deceptive product marketing practices; and
  • failing to clearly disclose information relative to overdraft processing and procedures.

So, even though it appears that no new overdraft regulations are being considered at this time, failure to properly disclose information to members can lead to substantial risk.

3. Lack of proper training negatively impacts employee morale and program results

I am often surprised when I have the opportunity to chat with credit union employees about how they present their institution’s overdraft program to members during account openings. If they haven’t been properly trained on the value the program provides when a member is faced with a financial hardship, they are not prepared to explain the program accurately and confidently. Or, they may let personal biases against individual members cloud their willingness to offer the program at all. Such uncertainty can result in frustration for employees who want to provide good service. It can also lead to compliance violations for the credit union if all members are not treated consistently.

Following a recent client training session, I watched as employees walked out of the training room after having that “aha” moment. I could see on their faces that they had gained a new understanding of what an overdraft program means for a member who is dealing with unexpected medical expenses or the loss of employment. They realized the importance of offering products based on what is in the members’ best interest, not their own. They understood the importance of fully disclosing what the program is, how to use it appropriately and how much it costs – so members can decide whether or not it is right for their situation.

Taking advantage of ongoing, professional training opportunities helps to solidify important program aspects that staff members may lack from any previous understanding of how a compliant program works. And role-play opportunities help staff learn how to present the program effectively to members. 

4. Maintaining the status quo can lead to mediocrity

While you may think you are currently earning adequate fee income each month from an existing strategy to stay on your current course, what would an extra 25 to 50 percent in non-interest income each month mean for your credit union? Are there things on your wish list – such as updating technology, initiating facility improvements, hiring new personnel to help grow your loan portfolio or maintain more efficiency in your branches – that you have been putting off because of budgetary constraints? Are there mobile-based services that your members obtain elsewhere because you are stalling on updates or new implementations?

According to information from the Pew Charitable Trust,12 million Americans take out payday loans each year to cover their financial needs.How many of your members are using competitive resources when they have a shortfall in funds, instead of relying on your credit union to provide a full range of services? Think about the good you can do to better serve your members’ financial needs – while keeping your credit union competitive and top-of-mind in your market.

A commonsense approach to overdraft services reaps the most rewards

A professional overdraft service provider can take a look at your existing program or help you implement a new one. They will make sure the procedures are member-friendly, review your fees to make sure they are fair and advise you how to maintain effective communications policies that provide the information members need to use your program wisely. They can provide an estimate of your earning potential, guide you throughout the implementation process and provide on-going advice to keep your program on-goal. In either case, the resulting revenue stream generated by a well-maintained, fully disclosed overdraft program can support strategic improvements that will enhance member service and keep your credit union competitive for years to come. 

# # #

ABOUT THE AUTHOR

Jim Griffis is a regional director for John M. Floyd & Associates (JMFA). He joined JMFA with more than 20 years of expertise in sales and marketing strategies, operations, project management and new product implementation. As a Regional Sales Director for JMFA, Jim works with community banks throughout the northeastern states to help them achieve their profitability goals. Learn more about Jim.

ABOUT JOHN M. FLOYD & ASSOCIATES (JMFA)

For the past 38 years, JMFA has been considered one of the most trusted names in the industry helping community banks and credit unions improve their performance and profitability. Whether it’s recovering lost revenue, uncovering savings opportunities, serving account holders better, finding the perfect personnel fit or delivering a 100% compliant courtesy pay program, JMFA has the right solutions to help you not only meet, but exceed, your goals. We are proud to be a preferred provider among many industry groups, including CUNA Strategic Services. To learn more, please contact Thomas Aleman, JMFA Regional Director,or visit www.JMFA.com.

Categories: Business Partners, Compliance, Education & Training
Posted by Steven Houle, CFA, FRM, Director, Advisory Services, Catalyst Corporate FCU on 4/26/2018

The shape of the yield curve is changing. Is it affecting your credit union’s investment strategy? If so, you’re not alone.

As the interest rate environment and yield curve shift, now is as good a time as any to assess your investment strategy. Prior to the Federal Reserve’s Fed Funds rate increases (which started in December 2015), the opportunity cost of holding on to “extra” cash was very high. Even though the yield curve was at historically low levels, the slope of the yield curve was steep. This provided significant opportunities to pick up income between holding cash and putting funds in term investments.

In fact, one of the most significant attributes to investment portfolio performance over the last few years was how much “extra” liquidity a credit union held. The more they held, the lower their investment portfolio return and vice versa.

However, even though the yield curve has increased, the slope is significantly flatter. What does that mean? Here’s one scenario:

Challenge.

The 2-year Treasury is currently between 2.25 and 2.30 percent and ready to move higher with further Fed increases. Conversely, the 10-year Treasury falls between 2.75 and 2.85 percent, but is consistently struggling to stay near 2.9 percent, given the anemic inflation outlook. The slope, or “spread,” between the 2- and 10-year Treasuries ranges between 50 and 55 basis points, more than half its level as recently as March 2017.

Strategy.

To navigate the flat curve and future changes, an effective strategy may be a barbell approach to reinvesting excess funds. The objective of a barbell is to add investments with short and long durations at the same time, in similar amounts.

Why?

If a credit union has $5 million to invest, purchasing $2.5 million of fixed term investments with maturities of less than one year would earn approximately 2.00 percent and roll-off when the Fed increases the Fed Funds rate again. Simultaneously, the credit union could invest $2.5 million in 4- to 5-year investments that earn between 2.50 and 2.60 percent. When the yield curve is relatively flat, with uncertainty as to its future shape, a barbell strategy enables a credit union to play defense and offense at the same time.

Credit unions may find it helpful to work through a few possible scenarios to develop feasible and functional investment strategies. A liquidity stress test, such as the one offered by Catalyst Strategic Solutions’ ALM Service, might also prove beneficial for credit unions. This type of test identifies liquidity shortfalls across a variety of scenarios and projects net cash flows based on multiple factors.

As the curve changes and the status quo shifts, make sure your credit union develops the right strategy (or strategies) to remain successful.

 

Categories: Business Partners, Education & Training, Financial & Auditing, Strategic Planning & Consulting
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