The Power of Member Profiling: How Credit Unions can Transform Marketing Strategies

on 4:05 PM

 Credit unions play a unique role in the financial ecosystem, offering members a local community-focused alternative to traditional banking. In an era dominated by data-driven decision-making, credit unions are increasingly able to harness the power of targeted data to enhance their marketing strategies, strengthen member relationships, and drive sustainable growth. The foundation of effective targeted marketing for credit unions lies in the creation of comprehensive member profiles.

What is member profiling?

In the rapidly changing world of financial services, credit unions are increasingly recognizing the importance of member profiling as a cornerstone for effective marketing strategies. Member profiling involves the meticulous collection and analysis of data to understand the unique financial behaviors, preferences, and needs of individual members. At the heart of member profiling is the quest to understand member behavior. Credit unions methodically analyze transactional data, savings patterns, loan histories, and other financial activities to gain insights into how members utilize their services. By deciphering these behaviors, credit unions can identify trends, preferences, and pain points, laying the foundation for targeted marketing efforts.

Member profiling goes beyond basic demographic information. Credit unions can compile comprehensive member profiles that encompass a holistic view of each member’s financial journey. These profiles include details such as income levels, spending habits, life stages, and financial goals. Armed with this information, credit unions can tailor their marketing strategies to cater to the specific needs of many diverse member segments.

The benefits of member profiling

One of the significant advantages of member profiling is the ability to deliver personalized product recommendations. Credit unions can analyze member profiles to identify opportunities for offering relevant financial products and services. Whether it’s a member in need of a mortgage, a young adult seeking their first auto loan, or a saver interested in investment opportunities, credit unions can adapt their marketing messages to address individual member needs. Credit unions can segment their member base based on common characteristics, allowing for more focused and effective marketing efforts. By customizing offers, imagery, and even delivery methods to resonate with specific member groups, credit unions can increase engagement and response rates. Whether promoting new services, discounts, or educational content, targeted marketing campaigns enhance the overall member experience. This highly customized approach ensures you are reaching the right segment of your membership at the right time in each member’s individual financial journey.

By continuously monitoring member behavior, credit unions can identify signals of potential attrition. For instance, if a member’s spending patterns suggest a change in financial circumstances, the credit union can offer tailored solutions—such as loan restructuring or financial counseling—to retain the member’s loyalty. As an example, changes in direct deposit or a decrease in account activity may indicate dissatisfaction or a change in financial circumstances. Proactively addressing these issues through personalized communication or targeted solutions can help credit unions retain members and strengthen the relationship.

A strategic imperative

Member profiling has emerged as a strategic imperative for credit unions seeking to elevate their marketing strategies. By understanding member behavior, creating comprehensive profiles, and delivering personalized experiences, credit unions can foster stronger connections with their members. As technology continues to advance, credit unions that harness the power of member profiling will not only meet member expectations but also position themselves as trusted financial partners for the long term.

Author: Synergent

FFIEC Announces Availability of 2022 Data on Mortgage Lending

on 4:17 PM

 WASHINGTON, D.C. (June 29, 2023) – The Federal Financial Institutions Examination Council (FFIEC) today announced the availability of data on 2022 mortgage lending transactions reported under the Home Mortgage Disclosure Act (HMDA) by 4,460 U.S. financial institutions, including banks, savings associations, credit unions, and mortgage companies.

The HMDA data are the most comprehensive publicly available information on mortgage market activity. The data are used by industry, consumer groups, regulators, and others to assess potential fair lending risks and for other regulatory and informational purposes. The data help the public assess how financial institutions are serving the housing needs of their local communities and facilitate federal financial regulators’ fair lending, consumer compliance, and Community Reinvestment Act examinations.

The Snapshot National Loan-Level Dataset released today contains the national HMDA datasets as of May 1, 2023. Key observations from the Snapshot include the following:

  • For 2022, the number of reporting institutions increased by about 2.63 percent from 4,338 in the previous year to 4,460.
  • The 2022 data include information on 14.3 million home loan applications. Among them, 11.5 million were closed-end and 2.5 million were open-end. Another 287,000 records are from financial institutions making use of Economic Growth, Regulatory Relief, and Consumer Protection Act’s partial exemptions and did not indicate whether the records were closed-end or open-end.
  • The share of mortgages originated by non-depository, independent mortgage companies has decreased and, in 2022, accounted for 60.2 percent of first lien, one- to four-family, site-built, owner-occupied home-purchase loans, down from 63.9 percent in 2021.
  • In terms of borrower race and ethnicity, the share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose from 7.9 percent in 2021 to 8.1 percent in 2022, the share made to Hispanic-White borrowers decreased slightly from 9.2 percent to 9.1 percent, and those made to Asian borrowers increased from 7.1 percent to 7.6 percent.
  • In 2022, Black or African American and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans of 16.4 percent and 11.1 percent respectively, while the denial rates for Asian and non-Hispanic-White applicants were 9.2 percent and 5.8 percent respectively.

The FFIEC also released today several other data products to serve a variety of data users. The HMDA Dynamic National Loan-Level Dataset is updated on a weekly basis to reflect late submissions and resubmissions. Aggregate and Disclosure Reports provide summary information on individual financial institutions and geographies. The HMDA Data Browser allows users to create custom tables and download datasets that can be further analyzed. In addition, in mid-March 2023, the FFIEC made available Loan/Application Registers for each HMDA filer of 2022 data, as well as a combined file for all filers, modified to protect borrower privacy. Additional observations regarding the 2022 data may be found here.

3 Steps to Prepare Your Culture for AI

on 3:04 PM

 According to Jared  Spataro from Microsoft, As business leaders, today we find ourselves in a place that’s all too familiar: the unfamiliar. Just as we steered our teams through the shift to remote and flexible work, we’re now on the verge of another seismic shift: AI. And like the shift to flexible work, priming an organization to embrace AI will hinge first and foremost on culture.

The pace and volume of work has increased exponentially, and we’re all struggling under the weight of it. Leaders and employees are eager for AI to lift the burden. That’s the key takeaway from our 2023 Work Trend Index, which surveyed 31,000 people across 31 countries and analyzed trillions of aggregated productivity signals in Microsoft 365, along with labor market trends on LinkedIn.

Nearly two-thirds of employees surveyed told us they don’t have enough time or energy to do their job. The cause of this drain is something we identified in the report as digital debt: the influx of data, emails, and chats has outpaced our ability to keep up. Employees today spend nearly 60% of their time communicating, leaving only 40% of their time for creating and innovating. In a world where creativity is the new productivity, digital debt isn’t just an inconvenience — it’s a liability.

AI promises to address that liability by allowing employees to focus on the most meaningful work. Increasing productivity, streamlining repetitive tasks, and increasing employee well-being are the top three things leaders want from AI, according to our research. Notably, amid fears that AI will replace jobs, reducing headcount was last on the list.

Becoming an AI-powered organization will require us to work in entirely new ways. As leaders, there are three steps we can take today to get our cultures ready for an AI-powered future:

Choose curiosity over fear

AI marks a new interaction model between humans and computers. Until now, the way we’ve interacted with computers has been similar to how we interact with a calculator: We ask a question or give directions, and the computer provides an answer. But with AI, the computer will be more like a copilot. We’ll need to develop a new kind of chemistry together, learning when and how to ask questions and about the importance of fact-checking responses.

Fear is a natural reaction to change, so it’s understandable for employees to feel some uncertainty about what AI will mean for their work. Our research found that while 49% of employees are concerned AI will replace their jobs, the promise of AI outweighs the threat: 70% of employees are more than willing to delegate to AI to lighten their workloads.

We’re rarely served by operating from a place of fear. By fostering a culture of curiosity, we can empower our people to understand how AI works, including its capabilities and its shortcomings. This understanding starts with firsthand experience. Encourage employees to put curiosity into action by experimenting (safely and securely) with new AI tools, such as AI-powered search, intelligent writing assistance, or smart calendaring, to name just a few. Since every role and function will have different ways to use and benefit from AI, challenge them to rethink how AI could improve or transform processes as they get familiar with the tools. From there, employees can begin to unlock new ways of working.

Embrace failure

AI will change nearly every job, and nearly every work pattern can benefit from some degree of AI augmentation or automation. As leaders, now is the time to encourage our teams to bring creativity to reimagining work, adopting a test-and-learn strategy to find ways AI can best help meet the needs of the business.

AI won’t get it right every time, but even when it’s wrong, it’s usefully wrong. It moves you at least one step forward from a blank slate, so you can jump right into the critical thinking work of reviewing, editing, or augmenting. It will take time to learn these new patterns of work and identify which processes need to change and how. But if we create a culture where experimentation and learning are viewed as a prerequisite to progress, we’ll get there much faster.

As leaders, we have a responsibility to create the right environment for failure so that our people are empowered to experiment to uncover how AI can fit into their workflows. In my experience, that includes celebrating wins as well as sharing lessons learned in order to help keep each other from wasting time learning the same lesson twice. Both formally and informally, carve out space for people to share knowledge — for example, by crowdsourcing a prompt guidebook within your department or making AI tips a standing agenda item in your monthly all-staff meetings. Operating with agility will be a foundational tenet of AI-powered organizations.

Become a learn-it-all

I often hear concerns that AI will be a crutch, offering shortcuts and workarounds that ultimately diminish innovation and engagement. In my mind, the potential for AI is so much bigger than that, and it will become a competitive advantage for those who use it thoughtfully. Those will become your most engaged and innovative employees.

The value you get from AI is only as good as what you put in. Simple questions will result in simple answers. But sophisticated, thought-provoking questions will result in more complex analysis and bigger ideas. The value will shift from employees who have all the right answers to employees who know how to ask the right questions. Organizations of the future will place a premium on analytical thinkers and problem-solvers who can effectively reason over AI-generated content.

At Microsoft, we believe a learn-it-all mentality will get us much farther than a know-it-all one. And while the learning curve of using AI can be daunting, it’s a muscle that has to be built over time — and that we should start strengthening today. When I talk to leaders about how to achieve this across their companies and teams, I tell them three things:

  • Establish guardrails to help people experiment safely and responsibly. Which tools do you encourage employees to use, and what data is — and isn’t — appropriate to input. What guidelines do they need to follow around fact-checking, reviewing, and editing?
  • Learning to work with AI will need to be a continuous process, not a one-time training. Infuse learning opportunities into your rhythm of business and keep employees up to date with the latest resources. For example, one team might block off Friday afternoons for learning, while another has monthly “office hours” for AI Q&A and troubleshooting. And think beyond traditional courses or resources. How can peer-to-peer knowledge sharing, such as lunch and learns or a digital hotline, play a role so people can learn from each other?
  • Embrace the need for change management. Being intentional and programmatic will be crucial for successfully adopting AI. Identify goals and metrics for success, and select AI champions or pilot program leads to help bring the vision to life. Different functions and disciplines will have different needs and challenges when it comes to AI, but one shared need will be for structure and support as we all transition to a new way of working.

The platform shift to AI is well underway. And while it holds the promise of transforming work and giving organizations a competitive advantage, realizing those benefits isn’t possible without a culture that embraces curiosity, failure, and learning. As leaders, we’re uniquely positioned to foster this culture within our organizations today in order to set our teams up for success in the future. When paired with the capabilities of AI, this kind of culture will unlock a better future of work for everyone.

CUNA meets with GAO on importance of updated CTR threshold

on 9:34 AM

CUNA Senior Federal Compliance Counsel Colleen Kelly, Senior Director of Advocacy Luke Martone, and credit unions from CUNA’s Examination and Supervision Subcommittee met with the U.S. Government Accountability Office (GAO) this week to discuss issues related to the Financial Crimes Enforcement Network’s (FinCEN) Currency Transaction Report (CTR) requirements.

The GAO’s review of the CTR process is required by the Anti-Money Laundering Act of 2020.

CUNA and credit union staff shared how FinCEN can make the reporting process easier for credit unions, helping the agency and credit unions achieve the mutual goal of combatting illicit finance.

CTR thresholds have not been updated since the enactment of the Bank Secrecy Act in 1972, and CUNA has consistently advocated for updates, since they are among the most time-consuming part of a compliance program.

CUNA supported legislation in the last Congress to raise CTR and Suspicious Activity Report thresholds, and has recommended numerous efficiencies FinCEN could take to ease the reporting burden on financial institutions.

Welch, Durbin, Marshall, and Vance introduce bipartisan Credit Card Competition Act of 2023

on 10:36 AM

 Bill would enhance competition and choice in the credit card network market currently dominated by the Visa-Mastercard duopoly

VermontBiz Senator Peter Welch (D-VT), Senate Majority Whip Dick Durbin (D-IL), and Senators Roger Marshall, M.D. (R-KS), and J.D. Vance (R-OH) today introduced the bipartisan, bicameral Credit Card Competition Act of 2023, legislation that would enhance competition and choice in the credit card network market which is currently dominated by the Visa-Mastercard duopoly.  Building on debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that large credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.  Companion legislation was introduced in the House by Representatives Lance Gooden (R-TX-05) and Zoe Lofgren (D-CA-18).  

“Interchange fees put a brutal strain on our small businesses, but because of the Visa-Mastercard duopoly in the credit card network market, Main Street businesses have no choice but to pay these crushing fees or risk going under,” said Welch.  “The Credit Card Competition Act will restore choice and competition in the credit card network market, helping to bring down costs for small businesses and making it easier for these essential businesses to thrive.” 

“Credit card swipe fees inflate the prices that consumers pay for everyday purchases like groceries and gas.  It’s time to inject real competition into the credit card network market, which is dominated by the Visa-Mastercard duopoly,” said Durbin.  “This legislation, which builds upon pro-competition reforms Congress enacted in 2010, would give small businesses a meaningful choice when it comes to card networks, and it would enable innovators to gain a foothold in the credit card market.  Bringing real competition to credit card networks will help reduce swipe fees and hold down costs for Main Street merchants and their customers.”   

“When it comes to Main Street vs. Wall Street, I’ll stand with Main Street businesses, who are the backbone of our economy, every single time,” said Marshall.  “At a time of economic uncertainty and skyrocketing inflation, these credit card companies are increasing their hidden swipe fees and price gouging small businesses and consumers.  Our legislation would rein in the big banks and the credit card industry, drive down costs for convenience stores, gas stations, and other small businesses, and ultimately pass those savings down to consumers.  This legislation is the right thing to do, and I am proud to reintroduce it with bicameral and bipartisan support.” 

“Due to a lack of competition, credit card companies have been able to exponentially increase hidden processing fees over the last decade.  These fees are most retailers’ highest business expense after labor and rent.  By requiring more than one network option on credit cards, the Credit Card Competition Act would foster competition and transparency in the credit card market so that card networks would have to compete for business on fees and terms – just as we compete for our customers’ business,” Leslie G. Sarasin, President and CEO, FMI – The Food Industry Association. 

There are currently four U.S. credit card networks: Visa, Mastercard, American Express, and Discover.  Visa and Mastercard are known as “four-party” networks; they act as agents for thousands of card-issuing banks and mandate the fees and terms that the banks receive from merchants for each transaction.  Merchants have limited leverage to negotiate fee rates and terms in four-party network systems, because they cannot risk losing access to the consumers served by Visa’s and Mastercard’s member banks.   

The market power and network structure of the Visa-Mastercard duopoly has enabled them to impose fees on U.S. merchants that are among the world’s highest, charging a total of $93 billion in U.S. merchant credit card fees in 2022.   These fees include interchange or swipe fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for these fees in the price of the goods and services they buy. 

Under the Credit Card Competition Act, the Federal Reserve would issue regulations, to ensure that banks in four-party card systems that have assets of over $100 billion cannot restrict the number of networks on which an electronic credit transaction may be processed to less than two unaffiliated networks, at least one of which must be outside of the top two largest networks.  This would inject real competition into the credit card market—opening the door for new market entrants such as current debit-only networks, encouraging innovation and enhanced security, creating backup options if a network crashes, and exerting competitive constraints on Visa and Mastercard’s fee rates. 

The Credit Card Competition Act is supported by organizations including the American Beverage Licensees, Armed Forces Marketing Council, Energy Marketers of America, FMI, Hispanic Leadership Fund, International Franchise Association, National Association of College Stores, National Association of Convenience Stores, National Association of Theater Owners, National Grocers Association, National Restaurant Association, National Retail Federation, National Wildlife Refuge Association, NATSO, NFIB, Retail Industry Leaders Association, SIGMA, U.S. PIRG, and over 200 state and regional business associations.  

**Recently re-introduced legislation would change the current credit card interchange system, making our current payments system less secure and hurting consumers. Tell your lawmakers to oppose changes to the current interchange system. Send a Message to Your Lawmaker here

A one-pager of the bill can be found here.   

New NCUA plan would add millions of credit union members

on 10:51 AM

 The National Credit Union Administration approved a plan that would expand credit union access to millions more Americans by allowing remote workers to qualify for membership based on their employer's market. 

The agency said the "paid from" proposal and other changes to its chartering and field-of-membership regulations would bring federal charters more in line with state charters. The agency has also proposed allowing more of a deceased credit union member's surviving family members to qualify for membership, and added a simplified application process for de novo community credit unions.

At the board's monthly meeting Thursday, NCUA Chairman Todd Harper said the current federal charter "lags significantly" behind the state charter, and 91 of the 100 largest potential fields of membership in the system are state charters. Roughly 3.3 million more people would be eligible to join a credit union under this proposal, Harper said. 

"Ultimately, it's Congress's decision whether to amend the Federal Credit Union Act's field-of-membership requirements to achieve greater parity with the rules in many states," Harper said. "However, where we can within our existing rules and the law's current requirements, the NCUA board should take appropriate and tailored action to simplify, streamline and strengthen federal chartering options."

But Robert Flock, vice president in the office of strategic engagement for the American Bankers Association, said regardless of the NCUA's intentions, this proposed rule blurs the distinction between credit unions and banks. 

"Further relaxing field-of-membership requirements renders the common bond that ties credit union members together meaningless," Flock said. "And without that common bond, credit unions are indistinguishable from tax-paying community banks, which are also committed to expanding access to financial services in underserved and low-income communities."

The NCUA's proposal would also simplify the application requirements for community-based credit unions by providing a standard form for business and marketing plans. The proposal would also expand the community-based field-of-membership affinities — relationships between a person and their geographic market — to recognize the growth of telecommuting.

"So instead of live, work or worship, the rule would include 'paid from,' so that if I worked for a company that was based in Boston, but I lived in Vermont and worked remotely, I could join that Boston-based community credit union," said Mark Treichel, a former NCUA executive director who now runs Credit Union Exam Solutions.

It is hard to estimate the reach of the changes, but that particular addition to community charters is "material" and will become more important over time, Treichel said.

Sam Brownell, founder of the consultancy CU Collaborate, agreed that aspect of the rule could have the biggest impact on consumers and credit unions.

"That would be a huge win for consumers' access to credit unions and allow more credit unions to provide their services to communities that banks seem to be leaving," Brownell said. 

In another loosening of membership restrictions, the NCUA proposed allowing everyone in the immediate family or household of a credit union member who dies to join the credit union in the six months following that person's death. Under the current rule, only the spouse of a member who dies is eligible for membership.

"This is a very thoughtful change, as it would allow loved ones to maintain a relationship with a credit union that they may only discover when death of a loved one results in a wind-down of affairs at the credit union," Treichel said.

The proposed changes to address the survivorship issue is a "compassionate move" to ensure no credit union member's family has unnecessary burdens to manage when a loved one passes away, said Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions.

To ease a backlog in field-of-membership applications, the NCUA has also asked to implement a template for this process. The proposal includes a technical clarification on the process for the NCUA to review and approve a new charter as well as the new organization's management and officials.

NCUA Vice Chairman Kyle Hauptman said the chartering process is one of his main three priorities, and so he is in favor of policies that make it more likely that a community or group can charter a new, viable credit union.

"Anything that clarifies field of membership also clarifies things for groups seeking a de novo charter," Hauptman said.

Jason Stverak, deputy chief advocacy officer for the Credit Union National Association, said that getting credit union services to more communities across the country is important to CUNA, state leagues and credit unions. He added that CUNA needs to review the proposal in detail. 

The unanimous vote on Thursday allows for a 90-day comment period to begin once agency officials publish the rule in the Federal Register.

NCUA board member Rodney Hood called the proposal a step in the right direction.

"But we have much more to build upon in this rule and from previous field of membership rulemakings," Hood said.

Ken McCarthy-Reporter, Credit Union Journal

Learning from nature — translating the science and art of murmurations into corporate culture

on 10:36 AM

Growing up in the Midwest, I often found myself a spectator to one of nature's most unique and beautiful encounters — the murmuration of a flock of birds. From far away, you'd see one flock in cohesive movement, creating swells and ripples as they flew. 

The real beauty of a murmuration, however, is in the science that happens inside the flock.

It’s not about following a lead duck, instead they coordinate by observing the birds around them and making the adjustments needed to keep the flock together. A sense of safety is present when so many eyes can watch for danger. The birds' synchronized movement warms the group in the cold winter months and attracts more birds to join in their flight. 

As I reminisced on this nostalgia, it came to mind that our company values reflect the science behind a murmuration because the murmuration's purpose is to foster the well-being of the flock. Ultimately, a company's core values should do the same for its employees.


'Many times, I've asked the question, "What makes me show up to work every day?" My answer shifts, but it always centers around those I work with. Zest AI has proven to me that belonging doesn't fall on an individual but instead is the work of a group to always advocate for greater inclusion. This culture is made possible when employees see their company and decision-makers living out the cultural values daily.

Our five core values of Heart, Collaboration, Bias-for-action, Communication, and Customer-centricity have created a safety net for our employees and encouraged the desire for a deeper understanding of ourselves, each other, and the world around us.

This company functions much like a murmuration. If you follow my simile, in our flock, we move in tandem, allowing space for each other's individual expression and growth while also recognizing that we all must grow together to remain whole. So we watch out for each other. We find harmony within the shifts and movements of our company. No one is left alone, and everyone authentically fits — we accept every kind of bird here! No need for a peacock to dress its plumage as a pelican or a starling as a bluejay. 

We can learn a lot from nature. We can see how to care for each other and extend protection as a community. We can find ways to promote each other's wellness by offering a soft place to land. We see that by working as a unit, we can create harmony and beauty in the world around us. 

Join us on March 8, 2023, from 11:30 AM to 12:30 PM as you find out how credit unions are leveraging AI to increase approval and automation in underwriting, member acquisition, and compliance related to DEI and CDFI initiatives.

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