Conference 7.286::dcu

    
    I have called and spoken with Darlene Diamond.  Other pertinent
    information:
    
    
    			Total Assets:	$280 million
    			Members:	15,000
    			Capital Ratio:	9.81%    (end of '93)
    
    
    She is sending me more information about Firemen's Credit Union. 
    

    RE: Other pertinent information.
    
    Yeah like - how do I join
    
    :^}

    
    Re: .0 and .1
    
    Well so much for the spin in 4.9
    
    Steve
    

�    Well so much for the spin in 4.9
    
    How so?  The capital ratio of this CU is almost 10%.  What were the
    savings and loan rates at this institution?

Re: .2  "How do I join?"

	Well, I'll start a fire, and you bring a hose, and I'll bet we
could both join }8-)}

    
>    How so?  The capital ratio of this CU is almost 10%.  
    
    NOW it is.  They have given bonus dividends for the past 57 years.  Do
    you think they ALWAYS had a 10% capital ratio?
    
    >What were the savings and loan rates at this institution?

    Funny you should ask, because I asked the same thing, sort of.  Darlene
    stated they had a loan to share ratio of 76% which is OUTSTANDING.  It
    means their members are BORROWING FROM THEM.  She mentioned a recent
    auto loan promotion that was 5.9% I believe.  Said they sold about $5
    million in loans!  
    
    I asked how they set their rates since they must be surrounded by
    banks.  Yes, they are surrounded by banks, but they use THEIR COST OF
    FUNDS (using 2 year Treasurys as a basis) as the determining factor.  I
    asked if this usually resulted in their rates being lower than the
    banks.  The answer, YES.
    

�    NOW it is.  They have given bonus dividends for the past 57 years.  Do
�    you think they ALWAYS had a 10% capital ratio?
    
    It's possible isn't it?  Maybe they haven't, but maybe it has been high
    enough (based on whatever standards they may have employed) to allow
    them to post dividends.
    
�    asked if this usually resulted in their rates being lower than the
�    banks.  The answer, YES.
    
    I assume that is for loans.  How much less?  What about savings?
    
    How many branches do they have?

    What a novel way to set rates ... based on thieir cost of funds ...
    and a compromise with 2 year treasury rates ... and not based on
    what banks are doing!  Gee!
    
    In other words ... banks are not their competition!  They use their
    OWN EXPERIENCE to set their own rates.
    
    This is what credit unions are supposed to be all about!
    
    Stuart
    
    

Based soley on industry-wide norms, the capital ratio for the firefighter's
credit union is below average.  However, if you read the DCU board memo
carefully, you'll see that issue of what a good cap ratio should be is
open for debate.  In the Board Memo, there is a discussion of our capital
ratio and then a mention that the capital ratio is determined by various
economic and business considerations.  So, these two credit unions are
similar in that neither has an industry-average cap ratio, and both
are highly successful institutions.  

There are several interesting things here.  First, the loan-to-share
ratio for the firefighter's credit union is very high.  This means a couple
of things must be true.  First, there is some combination of rate structure
and customer service that makes them attractive to their members as a
source of funds.  Second, it means that management has made a firm decision
to invest in it's membership.  I would very much like to now DCU's
loan to share ratio.  And, as evidenced so far by DCU management and
the present Board, DCU is clearly more interested in investing money
elsewhere than investing in it's membership.

The final paragraph of the article discussing the Board's role in setting
up the bonus dividends is particulary telling.  Here we have an example
of how things should work.  The credit union is successful because it's
membership sees it as a strong place to save and borrow.  The members
win because the credit union uses intelligent rate setting policy rather
than simply watching the competition and trying to be like them.  And
everybody wins because the board chooses to give back to its owners
a portion of the profits made.  This is the way things should work
in a real credit union.

This article seems to suggest that what Phil, Dave, and I are talking
about is not all motherhood and apple pie.   What we have said all along
for these past fews years in true:  Invest in your membership, treat
them well, and they'll invest in you.

Don't forget to vote in the election.

Chris

    
    Re: .9
    
    The most important point about using their own experience to set
    rates is that it is a clear message to their members that the
    raison d'etre is to serve the needs of the members i.e. they charge
    only what rates they need to in order to continue the offering.
    Setting rates by the local competition is the same as saying "I'm
    setting the rates so as make the most money that I can in the current
    environment."
    
    Steve
    

    
    The enthusiasm expressed in the article in .0 is exactly the attracted
    me to DCU in the very early '80s, when DCU also posted bonuses and
    refunds. At the time, I was satisfied with a WCNB checking account and
    a WCU auto loan, but the talk among my peers about "free checking *AND*
    bonuses" was very attractive.
    
    It worked once for DCU. It seems to have worked consistently for LAFCU.
    Those on the DCU Board of Directors or management staff who do not see
    this as a strong argument for using some profit to reward the members
    instead of worshiping the capital ratio, do not match my definition of
    the word "rational".
    

    Members?  Which members?  All members?  How does this other DCU look at
    their membership?
    
    All this talk about what the members want is good.  However, I've been
    wondering about just who the members are even though there has been
    much discussion about it the following, I don't believe has been
    discussed.
    
    Yesterday I looked in VTX which says (not full text) that Digital employees
    & family....as well as DCU employees & family are welcome to be
    members etc.
    
    I've just been trying to figure out how this THEM vs. US thing really
    began.
    
    Any thoughts ...does it matter?
    
    ...le
    
    p.s.  sorry if this is the wrong note about members but it seems to be
    mentioned in many notes...If you want to move it ...be my guest.
    
    
      

    
    Re: .12
    
    > I've just been trying to figure out how this THEM vs. US thing
    > really began.
    
    Well, my cut at that is that it had its beginnings or at least first
    become noticeable during the Mangone affair.  Members who wanted to
    know what was going on were treated as if they had no business asking
    in the first place.  You can take it from there.
    
    Steve
    

    
    Re .12:
    
    A "member" is anyone from DCU's field of membership who elects to open
    a savings (aka share) account and deposit $5. A member remains a member
    as long as at least $5 remains in the savings account. DCU's field of
    membership includes all employees of DEC or DCU and their families.
    
    Each members owns a share in DCU, and is therefore a part owner of DCU.
    Each member (over age 18?) has the right to exercise one vote annually
    to elect directors, and to influence the philosophy and direction of DCU
    through the choice of and communication with those directors.
    
    There is virtually no "THEM vs. US thing" in the charter, bylaws or
    original operation of DCU. Anyone in the field of membership with $5 in
    liquid assets could becomem a member and avail themselves of the same
    services at the same prices as any other member. Any "THEM vs. US"
    mentality you currently perceive most likely stems from the institution
    of "Relationship Banking" at DCU (January 1, 1994), whereby if you have
    arbitrarily large savings and/or debt you are deemed a "Relationship
    Member" and given free access to services that were previously free to
    all members; conversely, if your savings and/or debt are below the
    arbitrary limit, you are a "Nonrelationship Member" (aka "abuser, aka
    "pond scum") and are now charged fees for said services.
    
    Relationship Banking was introduced to DCU by its current president,
    Chuck Cockburn, as condoned by five of the seven current directors.
    (Two of those five did so in spite of campaign pledges to "hold the
    line" on fees.) Relationship Banking is the first concrete manifestation
    of "THEM vs. US"; however, some would argue that this mentality had it
    seeds in the notorious election of 1992 ("The Witch Hunt"), when the
    then-incumbent directors (who, by the way, instated Mr. Cockburn) said
    that they would not allow "just anyone" to run one of the largest credit
    unions in existence.
    

�So, these two credit unions are
�similar in that neither has an industry-average cap ratio, 
    
    But this one is closer to the industry average than DCU, right?
    
�And, as evidenced so far by DCU management and
�the present Board, DCU is clearly more interested in investing money
�elsewhere than investing in it's membership.
    
    Is the DCU not interested in investing in (aka loaning to) its
    membership, or is the membership not interested in investing in (aka
    borrowing from) DCU?
    
�The members
�win because the credit union uses intelligent rate setting policy rather
�than simply watching the competition and trying to be like them.  
    
    Seems to me they screwed up in setting their rates if they have to
    continuously readjust them by giving money back.

    
.15>    Is the DCU not interested in investing in (aka loaning to) its
.15>    membership, or is the membership not interested in investing in (aka
.15>    borrowing from) DCU?
    
    It doesn't matter. If you assume the latter, you (A) suggest ways to make
    DCU more attractive to members, and (B) remove the directors who don't
    listen to common sense. If you assume the former, you go immediately to
    step B. Each plan has its pros and cons, but both will get you where
    you want to go eventually.
    
.15>    Seems to me they screwed up in setting their rates if they have to
.15>    continuously readjust them by giving money back.
    
    Once again, I have to wonder if spin doctors grin uncontrollably while
    they write.
    
    Any responsible enterprise plans for the worst case. If things
    turn out better, a business will reward its investors while a
    cooperative will reward its members. I'm just waiting for DCU, like
    LAFCU, to resume acting like a cooperative and not a for-profit business.
    

    
>    But this one is closer to the industry average than DCU, right?
    
    So what?  There is nothing that stipulates that a credit union must be
    close to "industry norms" (which constantly shift) in order to give
    bonus dividends.
    
>    Is the DCU not interested in investing in (aka loaning to) its
>    membership, or is the membership not interested in investing in (aka
>    borrowing from) DCU?
    
    Funny, the LA credit union has no trouble loaning money to its members.
    Why aren't more members borrowing from DCU?  Is it the member's fault? 
    Are they going elsewhere just to spite themselves?  Clearly there are
    problems here that "relationship banking" does not address IMO.
    
>    Seems to me they screwed up in setting their rates if they have to
>    continuously readjust them by giving money back.

    So the rates they set (that were likely good deals at the time) were a
    screw-up?  They then decide to reinvest some of their profits BACK INTO
    THE MEMBERSHIP to show them that they ARE a credit union that operates
    for the MEMBER'S benefit, not just the blind pursuit of profit for
    profit's sake.  I don't call this screwing up, I call this brilliant
    strategy that benefits everybody.  It is an approach that lacks the
    impression of greed.  It is give and take on both sides.  This is what
    Dave, Chris and myself are advocating.  A moderate approach that
    doesn't forget the membership, not radical approaches that swing all
    the benefit to the institution.  But one thing is sure, the member's of
    this other credit union sure seem pleased and their credit union
    flourishes.  Isn't this the REAL bottom line???
    

>================================================================================
>Note 764.17                "Refund lights members up"                   17 of 17
>ASE003::GRANSEWICZ "Candidate for DCU Director"      32 lines   1-MAR-1994 15:21
>--------------------------------------------------------------------------------
>                   -< Moderation so that everybody benefits >-
>
>    Funny, the LA credit union has no trouble loaning money to its members.
>    Why aren't more members borrowing from DCU?  Is it the member's fault? 
Because, loyalty to the DCU not withstanding, people don't want to be coerced
into a relationship that other places are offering with no nickle-dime strings
attached.  Again, loyalty not withstanding, people can get comparable or 
better rates and services at places that welcome business regardless of the
size of the wallet.

>    Are they going elsewhere just to spite themselves?
No, they are going elsewhere because the DCU's current mode of operation is to
make people comparison shop.  In a competitive market -- and DCU wants to be
competitive, not leadership -- it becomes a buyers' market and the DCU is just
one seller from which to choose.

BobW

    
    RE: .18
    
    Precisely!
    

�    Are they going elsewhere just to spite themselves?  
    
    Based on some of the replies in here, they are going elsewhere to spite
    the DCU.

>    Based on some of the replies in here, they are going elsewhere to spite
>    the DCU.
    
    Certainly. Because the DEFCU was petty with them.
    
    -Glenn-
    

    
    Re: .20
    
    > Based on some of the replies in here, they are going elsewhere to
    > spite the DCU.
    
    You just don't get it do you?  Why should I or anyone else patronize
    a business that we believe holds our views about what we want and
    need in contempt.  Wake up.
    
    Steve
    

    
    EXACTLY!  Is this the type of "relationship" we want to exist between
    an organization and its members/owners/customers?  NO!  Many DCU members
    simply will not tolerate it.  They can and DO take their business
    elsewhere.  That HURTS DCU.  Everytime a PO'ed member leaves, they not
    only take their current business, but all future business.  In all
    likelyhood, they then become an agent for the competition, telling
    others how they were mistreated and discussing better places with which
    to do business.  We need members spreading the word about how GOOD they
    feel about DCU!  That recruits NEW members, new business, new growth,
    new profits!  NOBODY loses in this scenario.  It most certainly seems
    to be working for the LA credit union.
    
    Instead we have a pricing structure which establishes membership
    classes, "relationship member" vs. "non-relationship member".  Some
    members are now more equal than others.  Everything about this approach
    is NEGATIVE psychologically.  The "fairness" arguement doesn't fool
    anybody.  
    

RE: Note 764.20 by PATE::MACNEAL

>�    Are they going elsewhere just to spite themselves?  
    
>    Based on some of the replies in here, they are going elsewhere to spite
>    the DCU.

I am going to USAA based upon their fantastic service and DCU's
management/majority BOD recognition that they are a bank and not a CU...

I will be paying a small amount more, but based upon the service, it is
worth it...

Normally I would have gone with DCU.  In fact, until the so called
relationship stuff occurred, I would have gotten another car loan from
DCU...  Not this time Charlie.

	- mark

    I guess we have 70K+ dopes who are fast asleep.
    
�Invent this no-brainer relationship banking scheme, which
�    oh-by-the way, my REAL BANK right down the street doesn't even have.
    
    Your REAL BANK doesn't have minimum balances?  Who is it?  I'd like to
    check them out.

    RE .26
    
    I know your day wouldn't be complete without instigating an argument 
    here but several people have given examples of this...here's another 
    for you.
    
    Northeast Savings BANK does not charge a fee for their checking account
    based on minimum balance - you just don't *earn* money/interest on
    balances less than a certain amount.
    
    Jt
    

    
    Re: .26
    
    How about the Merrimack County Savings in Concord, NH.  Minimum
    balances only to earn interest.  No fees.
    
    Steve
    

    
    
      Or the Navy Federal Credit Union - no minimum balance, interest
    paid on all funds on deposit, regardless of balance,  and
    network atm access makes it seem "just around the corner"...
    
    
    

>================================================================================
>Note 764.23                "Refund lights members up"                   23 of 27
>ASE003::GRANSEWICZ "Candidate for DCU Director"      19 lines   1-MAR-1994 17:46
>--------------------------------------------------------------------------------
>
>                                                                   Some
>    members are now more equal than others.

Phil, have you been reading Orwell's "Animal Farm"?  8-)
BobW

�    Northeast Savings BANK does not charge a fee for their checking account
�    based on minimum balance - you just don't *earn* money/interest on
�    balances less than a certain amount.
    
    Bottom line -- money is still ending up in the bank's pockets instead
    of mine unless I keep a minimum balance.

>================================================================================
>Note 764.26                "Refund lights members up"                   26 of 27
>PATE::MACNEAL "ruck `n' roll"                         7 lines   2-MAR-1994 10:04
>--------------------------------------------------------------------------------
>
>    I guess we have 70K+ dopes who are fast asleep.
At least a good portion of those 70K+ members here in Colorado Springs are $5
members so that they can vote.

Also, since you didn't like my three (or was it four) references of places
without banking fees because they weren't in your area, I'd encourage you to do
what I did -- take out the phone book, pick six places you like the names of,
and call to ask what services they offer DECies.  It probably wouldn't take
more than an hour to find the first place that offers the same (or more) than
the DCU without the extrotion of relationship banking...

BobW

>>                <<< SMAUG::USER$944:[NOTES$LIBRARY]DCU.NOTE;5 >>>
>>                                    -< DCU >-
================================================================================
>>Note 764.31                "Refund lights members up"                   31 of 32
>>PATE::MACNEAL "ruck `n' roll"                         6 lines   2-MAR-1994 12:1
    
      
    >>Bottom line -- money is still ending up in the bank's pockets instead
    >>of mine unless I keep a minimum balance.
    
    Thats NOT what you said - you wanted to know about Real banks that did
    CHARGE fees!!!!! You Never said anythng about where other money wound
    up.
    
    Go twist your words elsewhere
    
    Jt

    
.23> Some members are now more equal than others.
    
.30> Phil, have you been reading Orwell's "Animal Farm"?  8-)
    
    I suspect he's been *living* it, at least part time, for almost two
    years now.
    

�    Thats NOT what you said - you wanted to know about Real banks that did
�    CHARGE fees!!!!! You Never said anythng about where other money wound
�    up.
    
�    Go twist your words elsewhere
    
    I'm not the one twisting words here.  The banks claiming no fees are. 
    Not paying interest unless you have a minimum balance is a hidden fee.

    
    Re: .35
    
    > I'm not the one twisting words here.  The banks claiming no fees are. 
    > Not paying interest unless you have a minimum balance is a hidden fee.

    So what would you say about a certain credit union that does both?
    
    Steve
    
    

    
    Re: .37
    
    >In my opinion, anyone who puts up with the DCU relationship "rules", 
    >minimum balances, and the rest of the fine print on their matrix sheet
    >(which reads like a TV-ad car lease) when there are institutions out 
    >there right in their own neighborhood or work town who have none have 
    >"questionable judgement".  Is that better?  Why anyone would put up
    >with crap as a CUSTOMER when there are superior alternatives is beyond
    >me.  But hey, people voted in Nixon for years too, so what do I know?
    
    I think this goes too far.  Every individual gets to decide for
    themselves what satisfies them.  If there are folks who are 100%
    satisfied with the DCU then that's fine for them.  What my beef 
    with Mr. McNeal is about has to do with his seeming inability to
    recognize that those of us who are very dissatisfied with the DCU
    and its "Relationship" baloney are NOT wrong.  We prefer that DCU
    satisfy us rather than itself.
    
    Steve
    

>    
>    I'm not the one twisting words here.  The banks claiming no fees are. 
>    Not paying interest unless you have a minimum balance is a hidden fee.
>

Maybe so, but lets look at this a minute ... typical savings interest
is around 3% per year ... which works out at a little under 1/4% per month
(Compound interest and all that ... but we'll call it 1/4% for the sake
of this example)

Now ... let's say for argument's sake that the minimum balance is $500
(that's likely a typical figure).

So the hidden fee is under $1.25 (remember when you hit the $500 you won't
lose it.)  For $1000 min balance, the hidden fee would be under $2.50).

This has at least a little more fairness to it in that if your min monthly
balance was say $4.00 your hidden fee would be 1 cent and NOT $4.00 and
moreover does not completely EMPTY the account!

If your minimum balance was $499.00, your fee would be $1.24  and NOT   $4.00
and in this case would definitely encourage those close to the minimum
balance to not fall below it.  For those not close to it, the penalty is
not a harsh one ... they do not LOSE what is in the account!

This is a much closer to the carrot than the stick.  DCU's approach is a
stick, not a carrot!

The only modification I would propose to such a scheme is to base the
application of interest on the average balance rather than a minimum
balance.  (EG if I have $499 on the 1st of March and deposit $10,000
on the 2nd, I should be paid interest for the month.

Stuart

    Hey!  I voted for Nixon!  You tryin' to picka fight or somethin'?
    
    Mark

    
    Re: .41
    
    > I agree that the wording may be a little strong Steve.  It's just
    > one opinion and worth .02 cents.  However, it seems like ...
    
    I agree with all the things you say.  I'm just saying that if we
    want our point of view to be taken as valid then we ourselves
    have to take as valid the points of view of those who are satisfied.
    
    Steve
    
    

While digging my "Right Choices" and "No Witches" badges out of moth balls
just recently, and returning to this conference after a long hiatus on my
part, I had to pause and wonder why it is that Mr. MacNeal is still appearing
to be the DEFCU shill. Just what is your agenda, Keith?

-Jack

    RE:.36

   > So what would you say about a certain credit union that does both?

    Steve I noticed you haven't received an answer on this yet.  Do you
    think you ever will?

    Joe

    
    Re: .44
    
    Likely not, Joe.  Frankly, I didn't expect one.  It isn't what he
    wants to hear.
    
    Steve
    

    Keep throwing around those non-sequiters and red herrings, guys.  I
    hope your knees aren't getting too tired from all that jerking, though.

    
    Re: .46
    
    So where is the non-sequitur?  You asked about what banks don't
    have fees.  You got several responses.  You contend that those
    don't count since their minimum balance to earn interest is just
    a hidden fee.  So I ask what do you have to say about the DCU
    then WHICH DOES BOTH.  You stay mum, because whatever response
    you could make wouldn't serve any of your arguments.
    
    Get a life.
    
    Steve
    

    Someone raised the point was that other banks are fee free, I was
    merely pointing out you have to look deeper to see if it's true.
    
    What this has to do with what I say about the current relationship
    philosophy I haven't a clue.  Besides, that subject has already been
    discussed at great length.

Unlike Keith, I view a fee as actually taking money
from someone, not withholding the giving of money.

The dictionary agrees with me as it defines fee as,
"a payment for professional services".  Where there
is no payment (of money), then there is no fee.

I understand the argument about "hidden fees", but this
is just poor terminology.  It is not a hidden fee, it
is instead the lack of a benefit (interest, in this
case) under certain circumstances.

So, is this enough semantic games for you, Keith?

Collis

    If this were pure semantics, Collis, it wouldn't have an impact on my
    wallett.

I will request once again, Keith -

  What is your agenda? What do you feel you'd like to see accomplished
  with respect to the continuing management of the DEFCU as opposed to
  what's being proposed (generally) here, to wit, more respect for
  members, less Bank-like performance, etc.?

Somehow, I get the sense that you have only a personal agenda _against_
certain folks who are vocal in this conference without necessarily
having any rational motive for same. These folks have very clearly
stated some opinions and positions that they stand for with respect
to our credit union. You seem to consistantly oppose them.

Why? What do you stand to gain? What is it that you'd prefer?

-Jack

Re:  .50

Fees are not the only thing that have an impact on your
wallet.

I've shown why I think the lack of a benefit is not a
fee.  If you choose to insist that it is, it seems to
me that we're simply haggling over semantics (which can
be very important at times).

Consider two examples of semantics (or positioning):

  "More choices!"

  "Relationship banking is NOT a fee structure."

Collis

    
    The logic that decides that not getting interest is the same
    as a fee is the same kind of logic that the Credit Union used
    to decide that the small accounts were costing a certain amount
    of money.
    
    You are saying that you deserve a certain return on you money,
    all else is a fee.  They are saying that they deserve a certain
    amount of profit from each member, anything less is a loss.
    
    The same logic can also say that $1,000 in a checking acount
    is being charged a fee.  You see, some financial advisor said that
    I should be able to earn %8 (lets say) on my money.  So, the %5 
    difference between what the checking acount is giving me and what 
    the financial advisor says I should get is a fee, right?  
    
    not quite... it just does not work.
    Amy

    
    Re: .48
    
    >Someone raised the point was that other banks are fee free, I was
    >merely pointing out you have to look deeper to see if it's true.
    >
    >What this has to do with what I say about the current relationship
    >philosophy I haven't a clue.  Besides, that subject has already been
    >discussed at great length.
    
    What is has to do with it is that you were finding fault with those
    banks because they have hidden fees.  I just wanted to know whether
    you'd find any fault with an institution that has both overt and
    hidden fees.  IMO, You're not being very consistent.
    
    Steve
    

    OK, let's talk semantics.
    
    Competitiveness:
    
    Dave says he wants DCU to be competitive but says that that merely
    being the equivalent of other institutions is not being competitive. 
    So what do we get?  DCU saying that they are competitive and citing
    examples that show they are and Dave saying they're not and citing
    examples where others are better.  Dave, why not just come right out
    and say you want DCU to be best in class?
    
    Co-operative
    
    DCU says that relationship banking is what a cooperative is all about
    -- people pulling their own weight to help each other.  How much people
    helping people is going on with approx. 7 thousand $5 accounts?  Is
    asking for direct deposit of a paycheck in exchange for free checking
    too much to ask?  Phil says a co-operative is people helping people,
    even if they can't help anyone right now, they will help someone in the
    future.  Does Phil really want a co-operative in the true sense of the
    word or does he want a civilized Robin Hood type system where the
    "rich" help the "poor" until they become "rich" enough to help more
    "poor"?  Phil, any idea how many "abusers" eventually became
    relationship members?
    
    Free Checking
    
    What started out as an innocent comment suggesting that people should
    read the fine print so they know what they are getting into has erupted
    into a flame war.  Chill out.

�    The logic that decides that not getting interest is the same
�    as a fee 
    
    I didn't say that.  Someone else interpreted me as saying that.  What I
    said was that an account that advertises itself as "Free Checking" but
    doesn't pay interest unless a certain balance is maintained is not
    free.

�    What is has to do with it is that you were finding fault with those
�    banks because they have hidden fees.  I just wanted to know whether
�    you'd find any fault with an institution that has both overt and
�    hidden fees.  IMO, You're not being very consistent.
    
    First of all, I have found faults with the DCU and have expressed them
    in here (e.g. no premium interest on Holiday Club, withholding income
    that was over budget, $1000 minimum on earning interest in checking). 
    Others were saying they were going down the street because they found
    something better, yet they neglected the part about minimum balances. 
    Now who's not being consistent?

    
.55>    Dave says he wants DCU to be competitive but says that that merely
.55>    being the equivalent of other institutions is not being competitive. 
.55>    So what do we get?  DCU saying that they are competitive and citing
.55>    examples that show they are and Dave saying they're not and citing
.55>    examples where others are better.  Dave, why not just come right out
.55>    and say you want DCU to be best in class?
    
    I went back 20 or so replies and couldn't find "Dave" -- about whom are
    we talking? Anyway, whoever he is, I like the guy already. Whether he's
    only implied it or said it directly, he seems to understand that given
    its many advantages, DCU *should* be best in class. If memory serves,
    that has been said many times by many people in this conference.
    
.55>    DCU says that relationship banking is what a cooperative is all about
.55>    -- people pulling their own weight to help each other.  How much people
.55>    helping people is going on with approx. 7 thousand $5 accounts?
    
    The DCU *president* and five *directors* have said that. It's fairly
    obvious from discussion in this conference that a number of other
    members see it differently -- that we banded together to help each
    other out, and that it was never implied that I would selfishly help
    you only to the extent that you help me.
    
    And, it is a darn good possibility, as noted elsewhere in this
    conference, that the 7000 alleged "abusers" were actually accounts that
    were *below* $5, accounts that should have been closed, gone and
    forgottten long ago, accounts that were left on the books by
    mismanagement, accounts that were closed quietly after their erroneous
    presence was used to push through a caste system of membership.
    

�    I went back 20 or so replies and couldn't find "Dave" -- about whom are
�    we talking? 
    
    Dave, one of the candidates for the BoD.  Surely you remember him.  It
    might not have been in this particular topic but he did say that he
    wants DCU to be competitive, but he doesn't consider matching the
    competition to be competitive.  That's fine.  All I asked was why
    doesn't he just come out and say that he wants DCU to be best in class? 
    It will save alot of "but we are competitive, no you're not, yes we
    are, no you're not".
    
�    obvious from discussion in this conference that a number of other
�    members see it differently 
    
    And isn't that what I said in the remainder of the paragraph?

    
    Re:
    
>That's fine.  All I asked was why
>    doesn't he just come out and say that he wants DCU to be best in class? 
>    It will save alot of "but we are competitive, no you're not, yes we
>    are, no you're not".
    
    Funny you should say that. I attach my personal statement that will
    appear in the election brochure. This was formulated months ago.
    Note the use of the term "best in class".
    

DAVID J. GARROD

I am seeking a position on DCU's Board of Directors because I am very
concerned with DCU's strategic direction. The DCU is
chartered to be a non-profit financial cooperative that exists to
benefit and serve its entire membership. Unfortunately, the recently
imposed policy of fees on basic services and the Relationship Banking
Program is driving many DCU members away.

I FAVOR:

    - A Pure Credit Union Philosophy. DCU must be best in class when compared
      to other credit unions. Today it is not. DCU compares itself with
      commercial banks and offers products and services that are barely
      competitive.

    - Membership Satisfaction. For long term viability DCU's top priority must
      be membership satisfaction and participation. Current policies
      focus on gaining short term profits. The failure to focus on developing
      competitive products and services, together with the imposition of a
      myriad of fees, has caused a record decrease in membership.

I OPPOSE:

    - Relationship Banking. The only criteria for a relationship should be
      membership in DCU. DCU must value members who don't always have a
      large loan outstanding or who are unable to maintain a
      multi-thousand dollar deposit balance.

    - Fees on Checking Accounts. At the Special Meeting in
      November 1991 the membership voted against the
      imposition of checking account fees. All incumbents
      seeking re-election, with the exception of Philip Gransewicz,
      subsequently voted to impose fees. I oppose these fees and will work
      for their rescission.

I have a BS Degree from the University of 
Southampton England and an MBA from Northeastern University (1991). For the past
six years I have managed a software development group in Digital's Networks
Engineering Organization.

I ask for your vote of support in this election.

    
    We *ALL* want DCU to be best in class!  Would anybody run for Director
    of an organization that *didn't* want to make it the best it could be? 
    It's ridiculous to even be discussing it.
    
    What Dave, Chris and I see as the problem is the definition of
    "class".  We feel DCU must strive to serve its members FIRST and
    compare itself to REAL CREDIT UNIONS, not BANKS, and not credit unions
    MASQUERADING AS BANKS.  We must compare ourselves to credit unions like
    the Los Angeles Firemen's Credit Union.  They have a very deep seated
    commitment to being a credit union that serves ALL its members.  Their
    members return that commitment in the form of LOYALTY to a credit union
    that they perceive to be on their side, not in their pockets.  Their
    success shows that what we stand for, and propose as a business model
    for DCU, is a not only possible, but TO EVERYBODY'S ADVANTAGE.
    

    
    I received some more information from Los Angeles Firemen's Credit
    Union.
    
    
    [excerpts from:]
    
    			Board of Directors
    			Chairman's Report
    			1993 Annual Meeting
    
    
    .
    .
    .
    
    "1993 will be remembered as the year of low interest rates.  Throughout
    the financial industry rates on savings dropped all year long.  Our
    Credit Union, due to its' loyal members and hard working Board and
    Staff, were able to control costs and lowered rates on savings only
    once in 1993.  From February to the end of the year we were able to
    pay a day-in day-out interest rate of 3.25%.  We also BONUSED all
    shares, share certificates, and IRA accounts at year end in an amount
    of over $815,000 giving a 10% bonus on interest earned through the
    year.
    
    Interest rates on loans was lowered in 1993.  Adjustable real estate
    loans, tied to two year treasury certificates, dropped to their lowest
    rates ever in February, then again in August.  With the interest refund
    the effective rate paid by first trust deed real estate borrowers was
    an industry low 5.2% in 1993.  The Board lowered rates on all loans
    during 1993 with the exception of Open End loans, which were lowered at
    the end of 1992, and double wide mobile home loans.  $1,304,060 dollars
    was returned to our borrowers in a 10% interest refund on all
    non-delinquent member loans.
    
    Our VISA program is an industry leader.  While offering all services
    that GOLD cards offer, we lowered our annual VISA rate to a low 10.8%
    while still charging no annual fee, giving a 25 day grace period, and
    cash-back on purchases made with our card.  Our members used VISA for
    purchases and cash advances in 1993 in excess of 8.3 million dollars."
    .
    .
    .
    "The Capital Ratio by which all financial institutions are measured
    continues to increase at the Los Angeles Firemen's Credit Union.  While
    we were able to return over $10,628,000 in dividends and interest
    refunds we also placed over $1,605,000 into reserves raising our
    Capital Ratio to 9.81%, one of the highest in the financial industry."
    .
    .
    .
    
    
    
    
    
    				"We're a TEN!"  (mailer)
    
    [backside]
    
    "We thank you for putting your trust in use...and we are proud to
    return something back to you.  Members who save and borrow at Los
    Angeles Firemen's Credit Union participate in the 'credit union
    difference'...where you receive higher rates on your savings and lower
    rates on loans...and where service to you - our financial family - is
    our primary goal.
    
    The Mission of Los Angelese Firemen's Credit Union
    
    To provide our members a safe and secure financial enviroment, thereby
    causing them to choose LAFCU as their primary financial institution.
    
    Our Employees will be empowered to meet the needs of our Members and be
    encouraged in their individual professional growth.
    
    By providing exceptional, competitive financial products and
    personalized, quality service we will commit to meeting or surpassing
    the financial needs and expectations of our Members."
    
    
    [inside]
    
    "Los Angeles Firemen's Credit Union is very pleased to announce the
    1993 share and loan interest refund of a full 10%!  In keeping with the
    credit union philosophy of people helping people, LAFCU has built a
    tradition of sharing the success of the credit union by returning bonus
    dividends and loan interest refunds to our members.
    
    10% Bonus Dividends on Regular Shares, IRAs and Certificates of Deposit!
    
    This year your credit union will pay you an additional bonus of 10% of
    the 1993 total dividends you earned on your Regular Share Account along
    with a first-time-ever bonus on Individual Retirement Accounts (IRAs)
    and Certificates of Deposit (CDs).  Throughout the year LAFCU has
    continued to pay a very competitive dividend on all investment
    accounts.  These rates are consistently higher than comparable accounts
    at any other financial institution.  And now we're going to increase
    your annual yield even more by paying you an extra 10% of the dividends
    you've already earned.
    
    WE'VE GOT MORE!
    10% Refund on Loan Interest!
    
    Los Angeles Firemen's Credit Union is returning 10% of the interets
    paid on your loans this year.  If you have a real estate or consumer
    loan (Auto, Line of Credit, RV, etc.) you will receive a 10% refund on
    the amount of interest you paid throughout this past year.  Your credit
    union is pleased to offer low, competitive loan rates throughout the
    year, and then refund to you a portion of the interest paid.
    
    Your Credit Union is Unique!
    In the history of your credit union, LAFCU has made an annual loan
    interest refund for 57 out of our 58 years.  In earlier times, this
    type of refund was more common in credit unions but it is rarely done
    today.  We are proud to be one of the very few credit unions that have
    continued this tradition.
    
    		This year Los Angeles Firemen's Credit Union will be
    			    refunding in excess of
    		      $2,000,000.00 to over 15,000 members
    
    Watch your December statement...if you have a real esate loan or a
    consumer loan your refund will be deposited , along with your Share and
    CD bonus dividend, into your Regular Share Account.  The Credit Union
    must wait until December 31st (or year-end) in order to calculate the
    refunds based on the entire year's activity.  Bonus dividends paid on
    IRAs will be deposited directly into your IRA in order to main the tax
    deferred status on these dividends.
    
    Because You are a Member/Owner of LAFCU You Have This Unique Opportunity.
    Because you have your savings and loans with LAFCU you are earning
    these great bonus dividends.  If you don't have your loans and savings
    here at LAFCU you may wish to renegotiate  your loans and transfer your
    savings to your credit union; you can then join your fellow members in
    receiving these bonus dividends and interest refunds in the future. 
    The member/owned, non-profit, cooperative spirit of your credit union
    means better rates all year...with the potential of additional annual
    interest refunds and bonus dividends!
    
    You'll Score Highest with LAFCU.
    No bank can offer the same quality service and products that you
    receive as a member/owner of LAFCU.  We can provide such low cost loans
    and high earnings because we loan only to our members and we operate as
    a not-for-profit financial cooperative owned by YOU.  We incur lower
    overhead costs than banks and savings & loans, and we never make 'risky'
    investments.  We don't have to charge the same type of fees and charges
    that other financial institutions do to generate profits, and we adhere
    to strict rules that provide for the safety and soundness of your
    accounts.  LAFCU is stronger than ever and we are proud to be in the
    top 1% of credit unions nationally.
    The 10% loan interest refund applies to all loans except: delinquent
    loans* and LAFCU VISA accounts.
    
    But wait, don't forget that our VISA has the new "cash-back" program!
    You can earn up to a 1% refund on your total yearly purchase amounts,
    and receive a once-a-year credit on your VISA statement each November.
    
    		A new low interest rate of 10.8% APR will be
    		effective January 1, 1994 on both your new and
    		current LAFCU VISA balances.  A full package of
    		special benefits are yours with a LAFCU VISA!
    
    
    *The loan interest refund will not apply to any member who had a
    delinquency condition on any loan during the period of January 1, 1993
    through December 31, 1993, regardless of the current status
    of the account."
    

.62 gives a new definition to "Best in Class".

    
    .62 details what a real credit union is and what it can mean to its
    members.  LAFCU is the model of a credit union that Chris, Dave and
    myself propose that DCU follow.  LAFCU has remained loyal to its credit
    union roots by giving BACK to its members and it has been rewarded with
    a LOYAL membership that brings its business to the credit union.  THIS
    IS A CARROT APPROACH!  It has lead to a successful and thriving credit
    union and it CAN BE DONE at DCU too.  It takes a commitment from the
    top (the Board) to make it happen.  Chris, Dave and myself (along with
    Paul K.) all share this commitment.
    
    Also, you'll notice no talk of "abuse" or people carrying their weight
    in their material.  They want EVERYBODY to participate in "people
    helping people", even those with less than $3500 in savings or loans.
    
    They also sent a copy of their latest newsletter (like Network) and
    most of what was in there was covered in the other material.  One thing
    I did notice was that the space they allotted to the "Meet Your Board
    Members" spot was TWICE the space we had in Network.  The Secretary of
    the Board was profiled and it was very refreshing to see NOT ONE
    mention of past banking experience.
    

    	Better watch it Phil your making it sound so good some of us on 
    the east coast just might start doing our banking by mail.  :^)

    Joe

    
    It's the little things, too...
    
    Go back to .62 and count the occurrences of the word "share". Now think
    back to the last time DCU refered to "share" and "share draft"
    accounts. I remember when they used to make a big deal out of the word,
    emphasizing it as a constant reminder that we area all in this
    together, that we are all owners of our financial institution. Another
    small indication that LAFCU has not forgotten its roots, while DCU has
    abandoned them.
    

   >What I said was that an account that advertises itself as 
   >"Free Checking" but doesn't pay interest unless a certain 
   >balance is maintained is not free.

Keith,

Maybe this makes sense to you, but it makes no sense to me.

I think the reason this makes no sense is obvious, but if
you don't see it, just ask and I'll explain it in detail.

Collis

>>Note 764.56                "Refund lights members up"                   56 of 68
>>PATE::MACNEAL "ruck `n' roll"                         7 lines   4-MAR-1994 15:58

>>    What I
>>    said was that an account that advertises itself as "Free Checking" but
>>    doesn't pay interest unless a certain balance is maintained is not
>>    free.
    
    What?!?!?!?  Just because you have a checking account doesn't equal
    you earn money...seems fine to me and many other people - If I want to
    have my money EARN more money then I use vehicles designed to do that.
    As far as I know a checking account is not a money making vehicle, or I
    should say, was not designed as a money making vehicle.
    
    Your logic and definitions seem to be uniquely yours.
    
    Jt

    What a credit union. I want my credit union (DCU) to be like the one on
    the west coast. I want it now. There isn't anymore excuses. Could
    someone please take out the information from the note that Mr. G. put
    into this file and make copies and mail them to all of the BOD of DCU
    and please make copies and put them in every DCU's branch managers
    hands. If I was on the east coast I would take vacation time to do just
    this.
    
    Thanks from St. Louis, Mo.
    
    Dave
    

    Re .62
    
    Perhaps this should be presented to the board as an example of what the
    members would want as a Credit Union ?
    
    Or are the other ears too deaf.

    
    Re .71
    
>                              -< Bring it to the Prez ? >-
>    Perhaps this should be presented to the board as an example of what the
>    members would want as a Credit Union ?
>    
>    Or are the other ears too deaf.
    
    
    I have tried, unsuccessfully, for two years.  I am now bringing it to
    their boss, the MEMBERSHIP.
    
    The choice is clear in my mind which business model DCU needs to
    follow.  I can only hope enough DCU members hear that there is another
    very valid alternative for DCU.  We need to explain to each and every
    DCU member that DCU *can* and *needs* to be a real credit union and
    that there are very real benefits for everybody involved when it
    happens.  Not only will DCU thrive, but the membership will thrive
    also.  Let's get DCU back on track towards "people helping people", not
    carry your weight or get lost.  New approach, new attitude, new CREDIT
    UNION!
    

    
    
    
    
    Keith,  This should help to make clear why you have so
    much opposition in this file:
    
    From .56 PATE::MACNEAL
    
    �    The logic that decides that not getting interest is the same
    �    as a fee 
    
    > I didn't say that.  Someone else interpreted me as saying that. 
    
    From .35 PATE::MACNEAL
    
    > Not paying interest unless you have a minimum balance is a hidden fee.
    
    
    So you most certainly did say that.  Trying to disavow it now doesn't
    encourage much listening to your point of view.
    
    Steve
    
    
    
    
    

    Phil, how many branch offices does this credit union operate?  What is
    their policy towards ATMs?  How far beyond greater LA does their
    memebership base extend?

    So the only loan rates that were tied to two year treasury certificates
    were adjustable real estate loans.  Earlier postings seemed to suggest
    that all of their loans were tied to this.  Is this what DCU uses to
    set their adjustable mortgage loans or are they (as some have
    suggested) simply setting the rate based on what the market will bear?

�    As far as I know a checking account is not a money making vehicle, or I
�    should say, was not designed as a money making vehicle.
    
    I guess you haven't heard of NOW accounts or weren't around when
    checking accounts did pay interest on balances above $0.
    
    re .73:
    
    Thanks, Steve, your post does indeed provide clarity.

    Don't start with your insulting remarks Mr. MACNEAL.  If this is what
    your arguements have resorted to then you should hang it up now.
    
    Once again your warped view of things is comparing no fees to your
    percieved notion that banks/CUs 'not paying' interest is the same 
    as charging a fee.
    
    
    Jt

�    Don't start with your insulting remarks Mr. MACNEAL.  
    
    Funny, nothing in my reply looks anywhere near as insulting as this:
    
�    Once again your warped view of things 
    
    Or the other attacks you have launched at me in this topic.  If you
    have a problem, feel free to take it up with me offline.  I see no
    purpose in hashing it out in here.

RE: Note 764.78 by PATE::MACNEAL

	What three boards have you served on?

	- mark

RE: .79

My guess is that he hasn't served on any boards.

-Glenn-

This baiting of MacNeal, re: "the boards he's served on" is really 
getting tiresome.  Aren't there more important things to discuss?
Please let it rest.

Brian

    re: .81
    
    He claims to have experience serving on 3 different BoDs.  We'd like to
    know which ones.  I'd hate for it to turn out to be the 1 meter, 3
    meter, and bulletin.
    
    I've served on a BoD, too, but it has very little bearing on the
    validity of any of my statements here.
    
    Bob

    RE:.82
    
    >He claims to have experience serving on 3 different BoDs.  We'd like to
    >know which ones.  I'd hate for it to turn out to be the 1 meter, 3
    >meter, and bulletin.
    
    I'm afraid you may have hit the nail on the head.
    
    Joe

    
    This information is from our last planning conference when bonus
    dividends and interest refunds were discussed.  These slides were
    prepared for us by DCU management.
    
    
    
    		    Interest Refunds and Bonus Dividends
    
    
    	o Advantages
    
    		> Goodwill to "good" members
    
    		> Operationally easy to do
    
    
    	o Disadvantages
    
    		> Depletion of Capital
    
    		> Bonus dividend unfair to borrowers
    
    		> Interest refund unfair to savers
    
    		> Inconsistent with strategies #1 and #2
    
    		   (My note: strategies referred to above are pricing
    		    strategies 1) Maintain competitive loan/savings
    		    products and rates  2) Implement balanced pricing
    		    structure so that users pay for services)
    
    		> Ineffective marketing strategy
    
    			- creates expectation for future
    			- less effective than paying/charging better rates
    			  initially
    
    		> Regulatory backlash
    
    		> Strategy of a regulated environment - rarely used today

    
>    		> Bonus dividend unfair to borrowers
>    		> Interest refund unfair to savers

    Yeah, so? I'm not impressed. DCU used to do both. Sometimes one thing
    sometimes the other. I don't remember complaints. Does Chuck?

>    		> Inconsistent with strategies #1 and #2
>    		   (My note: strategies referred to above are pricing
>    		    strategies 1) Maintain competitive loan/savings
>    		    products and rates  2) Implement balanced pricing
>    		    structure so that users pay for services)

    I'm not so sure that (2) should be a goal or that if it should that
    it's being done correctly. As for (1) doesn't one have to reach
    "competitive products" before one can maintain them? I think we've
    seen a lot of discussion that indicates that DCU isn't there yet.

    
>    		> Ineffective marketing strategy

    It's not a marketing strategy. It's a way of sharing profits.
    
>    			- creates expectation for future

    No it doesn't. It didn't in the past and I don't see why that would
    change.

>    			- less effective than paying/charging better rates
>    			  initially

    Is this managements way of announcing rate changes? :-)

>    		> Regulatory backlash

    Say what? Can you tell us more about this one?
    
>    		> Strategy of a regulated environment - rarely used today

    Just as "everyone is doing it" is not considered a serious argument
    by most adults neither is "no one is doing it."

    Frankly, my first impression, not having heard the discussion around
    this slide, is that DCU management doesn't understand bonuses and
    hasn't done their homework about previous history at DCU. I'm not 
    impressed.

    			Alfred

�>    			- creates expectation for future
�
�    No it doesn't. It didn't in the past and I don't see why that would
�    change.
    
    It doesn't and it didn't in the past?  Then what is all this talk about
    when DCU used to pay bonusses?

    .67:
    
    You have to pay to have your checks printed?  Well then, I guess you
    don't have truly free checking!
    
    Dick

    
>�>    			- creates expectation for future
>�
>�    No it doesn't. It didn't in the past and I don't see why that would
>�    change.
>    
>    It doesn't and it didn't in the past?  Then what is all this talk about
>    when DCU used to pay bonusses?

    Hey, no one expects a bonus do they? So it obviously didn't create an
    expectation. Even when bonuses were given we didn't see them every
    quarter. It pretty much always came as a surprise. A pleasant one 
    though. Talk about when DCU used to pay bonuses is all about knowing
    that they're possible and wondering why things are so much worse now
    then when they did happen.

    			Alfred

    
    Re: .84
    
    > > Goodwill to "good" members
    
    They STILL don't get it!!!!!  This insistence on editorializing
    by putting labels on people is really getting under my skin!  Just
    what is a "good" member?  I find this just as objectionable as
    calling other members "abusers".  Separating the membership into
    classes is OFFENSIVE.  Do you get that, Chuck?  What's it going to
    take to wake you up?
    
    	> > Bonus dividend unfair to borrowers
        > > Interest refund unfair to savers
    
    I love this one.  You discredit the idea by saying each one is unfair
    to the other as if you were only going to do one or the other but not
    both.  
    
    Clear evidence that the DCU management has its mind made up over this
    one and intends to ensure that NOTHING derails their strategy no
    matter what the members want.
    
    Steve
    

    I got a call from someone who *did* call LAFCU to get some information.

    This post includes most of the information that I got during that
    call.

    A few interesting data points.

    LAFCU has an average of $18,000 per member in savings accounts. This
    compares to about $4,400/member for DCU savings accounts. They have
    14,000 members and $23 million on deposit. So it's not surprising that
    their savings interest is a bit better then DCUs.

    Mortgages at LAFCU require 20% down and they only offer variable rate
    mortgages (6 months based on 2 year T bill rates). Home equity loans
    are similar. While I don't have exact figures it looks like loan rates
    are better at DCU but savings rates are better and LAFCU.

    Also note that LAFCU has been building capital for something like 59
    years and is at the high end of the capital ratio scale in the
    industry. Their loan to deposit ratio is good because they do not sell
    their mortgages. This is a higher risk proposition because of
    volatility in interest rates. My guess is that is why they don't offer
    fixed rate mortgages. I understand that they are looking into fixed
    rate but haven't committed to doing it.

    BTW, LAFCU has only one branch.

    OK, there's some data points. My summary is that LAFCU has some
    advantages that DCU doesn't. Mainly people who are interested in
    keeping large amounts in low risk low yield savings accounts, a
    long history of building capital, and low support costs (ie 1 branch).
    DCU has a geographically and demographical diverse membership and
    higher branch costs. DCU also offers more variety in loan options,
    generally better loan rates, but somewhat less in savings rates.

    		Alfred

    RE: .90
    
>    I got a call from someone who *did* call LAFCU to get some information.

    Alfred, based on information given in your reply is it safe to assume
    that you were called by either a Director or a DCU employee?
    
>    LAFCU has an average of $18,000 per member in savings accounts. This
>    compares to about $4,400/member for DCU savings accounts. They have
>    14,000 members and $23 million on deposit. So it's not surprising that
>    their savings interest is a bit better then DCUs.

    Why would any of the above information be a reason for LAFCU having better
    savings rates?  Did this caller give you the savings rates?  It sounds
    like they got them otherwise how would they know they are "a bit
    better"?  What might be driving their savings rates is their LARGE
    DEMAND FOR LOANS.  Their loan to share ratio is almost at 80% and that
    is what we were told would be an amazing ratio.  Right now we have
    EXCESS funds that we aren't loaning out so why would we want to attract
    more deposits with better rates?  If we did, it would lower the capital
    ratio.
    
    >Mortgages at LAFCU require 20% down and they only offer variable rate
    >mortgages (6 months based on 2 year T bill rates). Home equity loans
    >are similar. 
    
    This is probably because they are holding all their mortgages.  They
    mentioned that during my call.  They were investigating selling them
    which would then give them the fixed rate option.  This matches what
    DCU is doing in this area.  We are holding variable rate mortgages that
    we write, while we sell most of the fixed rate.
    
    >While I don't have exact figures it looks like loan rates
    >are better at DCU but savings rates are better and LAFCU.
    
    Somehow this whole thing has gotten turned into a rate comparison.
    Did this caller get actual rates?  Sounds like they didn't give them to
    you.  What are you basing your conclusion on?
    
    >Also note that LAFCU has been building capital for something like 59
    >years and is at the high end of the capital ratio scale in the
    >industry. 
    
    9.1% is the "high end"?  Funny, it's pretty close to what we have been
    told is our peer average.  So our current capital ratio is average? 
    
    >Their loan to deposit ratio is good because they do not sell
    >their mortgages. This is a higher risk proposition because of
    >volatility in interest rates. 
    
    Absolutely NOT!  They are holding all their VARIABLE RATE mortgages
    which is exactly what WE would be doing if we could sell enough of
    them.  But we offer fixed rate and sell them because rates are so low.
    LAFCU's portfolio is NOT HIGHER RISK because they are variable rate.
    Is this your statement or this callers?
    
    >My guess is that is why they don't offer
    >fixed rate mortgages. I understand that they are looking into fixed
    >rate but haven't committed to doing it.
    
    Exactly, this is what I was also told.  They seem to be maxed out by
    their loan demand and probably want to continue to offer mortgages to
    their members.

    >BTW, LAFCU has only one branch.

    Red herring alert.  DCU doesn't put a branch where it believes
    it will be UNPROFITABLE.  The DCU branches generate customers, that
    generate profit.  If DCU closed all its branches and just kept DCU HQ
    open, how many members do you think we'd have?  Would we be fulfilling
    our charter?  Do you think we could get 15,000 members and $280 million
    in assets?  
    
>    OK, there's some data points. My summary is that LAFCU has some
>    advantages that DCU doesn't. Mainly people who are interested in
>    keeping large amounts in low risk low yield savings accounts, a
 
    Alfred, could these be IRA's?
    
    >long history of building capital, 
    
    And an equally long history of sharing their success with the
    membership in the form of bonus dividends and/or interest rebates.
    They clearly illustrate that BOTH can be done while building capital. 
    They chose to do it gradually while cultivating their membership base. 
    We're determined to rocket to the top and without sharing our
    success with the membership.  Even worse, we're implementing policies
    that are driving some of that membership away.
    
    >and low support costs (ie 1 branch).
    
    To accurately determine this we'd need their expense to asset ratio. 
    DCU's has been increasing inspite of closing branches.  
    
>    DCU has a geographically and demographical diverse membership and
>    higher branch costs. DCU also offers more variety in loan options,
>    generally better loan rates, but somewhat less in savings rates.
    
    Yes, one branch costs less than 20.  Branches are a fact of life at
    DCU.  We need them to service the membership.  It has been stated that
    if it was done over again, there would probably only be 5-6 branches. 
    How many Digital Employees would that service?  On-site branches is the
    main reason people join DCU.  And again, it completely ignores the
    PROFIT these branches generate.
    
    Alfred, were any specifics given in the greater variety of "loan
    options"?  Not sure what this means.
    

    
>    Alfred, based on information given in your reply is it safe to assume
>    that you were called by either a Director or a DCU employee?

    You could just as easily assume that I was called by a Digital employee
    employee who doesn't feel comfortable in Notes.

>    Why would any of the above information be a reason for LAFCU having better
>    savings rates?  Did this caller give you the savings rates?  It sounds
>    like they got them otherwise how would they know they are "a bit
>    better"?  What might be driving their savings rates is their LARGE
>    DEMAND FOR LOANS.  Their loan to share ratio is almost at 80% and that
>    is what we were told would be an amazing ratio.  Right now we have

    When one has large deposits that appear very stable that would give you
    more options for investing the money. You wouldn't have to be as
    concerned with being quite as liquid. My assumption is this would lead
    to better rates. I didn't ask for the exact rates because I don't have
    a whole lot of free time on my hands. Their loan to share ratio is
    high because they don't sell their mortgages. I believe that if DCU
    held on to all our mortgages we'd have a pretty high ration as well.
    As a director you'd probably be in a better position to explain why
    we don't but I believe it's because most of ours are fixed rate.

>    Somehow this whole thing has gotten turned into a rate comparison.
>    Did this caller get actual rates?  Sounds like they didn't give them to
>    you.  What are you basing your conclusion on?

    Based my conclusion on the conversation. I didn't have time to ask
    for a variety of rates.

>    Absolutely NOT!  They are holding all their VARIABLE RATE mortgages
>    which is exactly what WE would be doing if we could sell enough of
>    them.  But we offer fixed rate and sell them because rates are so low.
>    LAFCU's portfolio is NOT HIGHER RISK because they are variable rate.
>    Is this your statement or this callers?

    My statement not the callers. I'm still learning all this stuff.
    BTW, since LAFCU manages to have so many people willing to take out 
    these high down payment variable rate mortgages that most DCU members 
    wouldn't want doesn't that indicate a significant difference in the 
    membership? They have a profitable package that they are selling but 
    that would, I suspect, be very unattractive to our members. That's an 
    important difference isn't it? Or would lots of DCU members flock to 
    these mortgages? Do we offer similar and if so how are they "selling?"

>    Red herring alert.  DCU doesn't put a branch where it believes
>    it will be UNPROFITABLE.  The DCU branches generate customers, that
>    generate profit.  If DCU closed all its branches and just kept DCU HQ
>    open, how many members do you think we'd have?  Would we be fulfilling
>    our charter?  Do you think we could get 15,000 members and $280 million
>    in assets?  

    Nah, but we could probably get 14,000 members and $23 Million in
    assets like LAFCU. Is that the model you want to pursue? I don't think
    so. Me either. I'm not so sure that one can pick and choice pieces of
    what a CU does and be sure of getting as good results. It's more then
    just one or two things that make a CU a success. It's a synergy of
    a lot of things. It's probably a delicate balance that one doesn't
    mess with lightly.

>    Alfred, were any specifics given in the greater variety of "loan
>    options"?  Not sure what this means.

    I'm not sure either. Yesterday was very hectic for me and I just wanted
    to get some data into the discussion. One thing that is clear to me BTW
    is that a comparison between credit unions is an involved process. One
    can't just take one or two data points and come to a conclusion. I
    think most of us know the story about the 5 blind men "looking" at
    an elephant. I do not have enough information to compare DCU and LAFCU
    to the point where *I* would feel comfortable making policy
    recommendations. That's what I know. I may have enough to determine
    where I want savings, or where I want my mortgage. But you know what?
    They could very well not be the came credit union. For the consumer
    what makes a CU the idea CU is what they want from it. For a board
    member to decide what sort of CU it should be requires a whole lot
    more information and a whole lot more involved set of criteria. But
    I doubt I'm telling you anything you don't already know. All that work
    is why my wife is so happy I lost the election two years ago. :-)

    		Alfred

    
    RE: .92
    
>    You could just as easily assume that I was called by a Digital employee
>    employee who doesn't feel comfortable in Notes.
    
    Anything is possible, but some of the calculations and statements made
    sound very much like bank-speak.

>    When one has large deposits that appear very stable that would give you
>    more options for investing the money. You wouldn't have to be as
>    concerned with being quite as liquid. My assumption is this would lead
>    to better rates. 
    
    Not necessarily.  Even money invested in CD or IRA can be moved at any
    time.  Sure there is a penalty, but money is never locked down.  Rates
    are MARKET driven, and strategy adjusted.  Because somebody is getting
    11% interest on credit card balances does not mean they will be a nice
    institution and give you 7% on your savings.  I think your assumption
    is incorrect for these reasons.
    
    >I didn't ask for the exact rates because I don't have
    >a whole lot of free time on my hands. 
    
    Too bad.  Because it sounds like this person did get them and then
    summarized and drew conclusions for us.  Since this topic seems to have
    become a rate comparison, just having the rates would have been better
    so that we can draw our own conclusions.
    
    >Their loan to share ratio is
    >high because they don't sell their mortgages. I believe that if DCU
    >held on to all our mortgages we'd have a pretty high ration as well.
    
    Yes, this is true.  But we don't know how much of their portfolio has
    been approved for the variable rate mortgages.  But since the interest
    rate risk is very low, I wouldn't be surprised if they filled out to
    80% with all they could sell.  Right now we would do essentially the same
    thing if we could sell enough of them.  Sure beats the 3-4% we're
    getting on investments.
    
    >As a director you'd probably be in a better position to explain why
>    we don't but I believe it's because most of ours are fixed rate.

    Yes, our mortgage portfolio has been steadily declining as people
    refinance and they haven't been replaced with a lot of lower interest
    fixed rate mortgages.  Variables are a different story as I've said. 
    It is just that with rates so low, most people go for the fixed rate.
    
>    My statement not the callers. I'm still learning all this stuff.
>    BTW, since LAFCU manages to have so many people willing to take out 
>    these high down payment variable rate mortgages that most DCU members 
>    wouldn't want doesn't that indicate a significant difference in the 
>    membership? 
    
    Not necessarily.  It sounds like they are pricing them aggressively
    and selling them.  Maybe they are hooked on LAFCU because of the
    interest rate rebate and bonus dividends?
    
    >They have a profitable package that they are selling but 
    >that would, I suspect, be very unattractive to our members. That's an 
    >important difference isn't it? Or would lots of DCU members flock to 
    >these mortgages? Do we offer similar and if so how are they "selling?"

    Yes, we do offer variable rate mortgages.  We sell VERY few compared to
    fixed rate.
    
>    Nah, but we could probably get 14,000 members and $23 Million in
>    assets like LAFCU. Is that the model you want to pursue? I don't think
>    so. Me either. 
    
    Wrong number above.  LAFCU has I believe $280 million (check reply .1 for
    the real number) in assets, not $23 million. They are HUGE for the number
    of members they have.  Or maybe we're SMALL for the number of members we
    have.  If so, I wonder why?  After all, we have TWICE the number of
    upscale types.  Maybe DCU members are more sophistated in managing
    their finances and have moved funds into mutual funds or something
    else?
    
    >I'm not so sure that one can pick and choice pieces of
>    what a CU does and be sure of getting as good results. It's more then
>    just one or two things that make a CU a success. It's a synergy of
>    a lot of things. It's probably a delicate balance that one doesn't
>    mess with lightly
    
    Exactly!!  And "relationship banking" messes with the synergy in a very
    fundamental way.  
    
>    I'm not sure either. Yesterday was very hectic for me and I just wanted
>    to get some data into the discussion. One thing that is clear to me BTW
>    is that a comparison between credit unions is an involved process. One
>    can't just take one or two data points and come to a conclusion. I
>    think most of us know the story about the 5 blind men "looking" at
>    an elephant. I do not have enough information to compare DCU and LAFCU
>    to the point where *I* would feel comfortable making policy
>    recommendations. That's what I know. I may have enough to determine
>    where I want savings, or where I want my mortgage. But you know what?
>    They could very well not be the came credit union. For the consumer
>    what makes a CU the idea CU is what they want from it. For a board
>    member to decide what sort of CU it should be requires a whole lot
>    more information and a whole lot more involved set of criteria. But
>    I doubt I'm telling you anything you don't already know. All that work
>    is why my wife is so happy I lost the election two years ago. :-)

    LAFCU illustrated a credit union that maintained their credit union
    philosophy.  We have been told it just isn't fair, it isn't done
    anymore, bad marketing, etc.  But the fact is that is still being done
    and it does work.  This was never meant to be a product by product 
    comparison shop.  
    
    I would encourage whoever did call and get the rate and option info and
    post it or send it to Alfred to post.  I haven't seen anything that
    would indicate they are soaking their members and then returning the
    money in bonus dividends.  They seem to have struck a very good
    compromise on the need for the credit union to grow equity and the need
    of the membership for a return on their investment.  This is all Dave,
    Chris and myself propose for DCU.  A FAIR and evenhanded approach to
    EVERYBODYS NEEDS, not just DCU's, not just DCU's employees, not just
    the NCUA or some rating agency.