Conference 7.286::dcu

    I would like to congratulate the DCU employees and management for their
    excellent audit report from the NCUA.
    
    Bob

    I noticed that the BoD approved membership for other company's
    employees into the DCU(last issue Networking welcomed 12 companys).
    This may get the membership number up but what are the downsides of
    this ? Did this new membership surprise you as it did me ?
    
    Regards,
    Ernie
    

    Ernie,
    
    the idea of other companies has been around for a while.
    
    the stand alone branch is new.  conversations about it in the bod
    minutes is non-existant.  The lack of discussion could mean that the
    BOD doesn't aid in these types of decisions.  I don't know what the
    bod is doing.
    things are going great why should we worry?
    ed
    

re:  serving other companies

DCU does in fact provide service to other companies.  We do this using
a technique called "SEG Expansion."  SEG stands for "Select Employee Group."

Under guidelines set by the NCUA, DCU can serve employee groups who meet
certain criteria (geographic proximity to DCU, no overlap with other credit
unions, direct request by their management, etc).  This was discussed in
the board minutes for several months.  See 2.50, 2.58, 2.59, 2.60, 2.61,
2.62, and 2.63 for additional details.  SEG Expansion is commonly practiced
in the credit union industry.  Direct Federal Credit Union and Worker's
Credit Union are two credit unions in GMA who are trying to expand 
aggressively using SEG expansion. Direct FCU has a rather extensive and
fairly sophisticated radio advertising campaign among other things.

DCU's Board and management see SEG expansion as one of several paths to growth.
An additional path to growth is to continue to develop business among our
current members and to promote membership to people already in the field 
of membership.  We are having very good success with this plan as well.
Given that there is a fairly finite amount that members can afford to save 
and borrow, it makes sense to add additional members in a careful fashion.

As a Director I do not see a lot of downside to adding new members.  The
biggest challenge to DCU continues to be to maintain member service at
as high a level as possible to keep our member/owners happy.  Adding new
members presents challenges in that regard, but also provides us with 
opportunities to make new loans, and take new deposits.  This type of
controlled growth allows us to keep loan rates low, deposit rates as 
high as practical, and allows DCU to continue to develop and mature 
delivery systems and improve member services.  

DCU benefits from an excellent membership.  We have very low loan delinquency
and charge-off rates.  I think even with additional members this trend
will continue because the credit union uses credit scoring and other
support systems to insure that we make good loans to creditworthy members.
Additionally, the new members that we serve are either co-located in 
facilities where we already have branches, or are in geographic proximity
to DCU's headquarters in Maynard.  Therefore, I don't think serving these
extra members represents any significant strain on our cost structure.

I disagree with Ed Badger's statements in 1006.3 about the Board being 
uninformed and not involved in decision making.  The Board is fully informed
about delivery systems and services.  In the specific case of opening an
outside branch, the Board discussed this at length with management at our
most recent strategic planning conference.  In addition, the Directors 
receive continual updates about plans and work in progress from management.
All directors receive a weekly information package from DCU which contains
many items, including financial information and memoranda from management
concerning business plans.  Many of the Directors, myself included, also
meet informally with members of management frequently between Board meetings
as we work on various projects and strategic plans, or hold committee meetings.

Hope this helps,
  Chris

[Posted by WWW Notes gateway]

    
    
    
    
    
    
    
    
    .3>the stand alone branch is new.  conversations about it in the bod
      > minutes is non-existant.  The lack of discussion could mean that
      >the BOD doesn't aid in these types of decisions.  I don't know what the
      > bod is doing.
.4>I disagree with Ed Badger's statements in 1006.3 about the Board being 
>uninformed and not involved in decision making.  The Board is fully informed
>about delivery systems and services.  In the specific case of opening an
>outside branch, the Board discussed this at length with management at our
>most recent strategic planning conference.  
    
    
    I don't know how Chris could disagree with my statment.  Perhaps there
    are minutes that I didn't see?  what I said is that I haven't seen any
    discussion.  Perhaps it would aid us if we had some vision into the
    planning sessions if they replace what would have been expected to see
    in BOD meetings, and that is where decisions are being made?
    just what is done in the planning meetings?
    Is there any way the bod could communicate goals, etc.
    
    a stand alone branch represents significant expense over a branch that
    is located inside a Digital facility.
    I didn't see discussion.  That didn't mean that I thought the bod was
    uninformed, but I can see where one could draw that idea.
    ed