The difference between involvement and commitment is like ham and eggs. The chicken is involved; the pig is committed. The old business fable of The Chicken and the Pig is obviously about commitment to a project or cause. When you are faced with transforming lending solutions, tackling a core system review, or dealing with compliance regulations, such as the recent CFPB warning, is your CU just involved or truly committed?
Last week, the CFPB (Consumer Financial Protection Bureau) issued a bulletin to banks and credit unions to warn that they must have systems in place to ensure accuracy when they pass on information, such as negative account histories, to checking account reporting or other credit reporting companies.
As summarized by CFPB to Credit Unions: Checking Reporting on Our Radar, “Consumer reporting companies that focus on checking accounts typically generate reports on charge-off amounts, past non-sufficient funds activity, unpaid or outstanding bounced checks, overdrafts, involuntary account closures and fraud."
The CFPB added that it's concerned about inaccuracies and inconsistent information that financial institutions provide to reporting companies. Banks and credit unions should expect accurate information from checking account reporting companies in order to make fair assessments of deposit account applicants, and if the system is tainted with incomplete, inconsistent and inaccurate information, they cannot make informed decisions, the bureau noted.
The CFPB’s concerns run deep as they feel that consumers should have access to accounts that fit their needs, and shouldn’t be limited to only a few options because of flawed reporting data used in decision making.
The bureau further feels that this inflexibility is pushing a huge market (young millennials) away when banks and credit unions should be working on ways to include those consumer groups to help develop their economic and financial potential.
Is your credit union going to be the chicken (basic involvement) or the pig (all-in commitment) when it comes to building loyalty and trust in the banking system? This bulletin serves as an opportunity to rethink your level of commitment on many fronts.
Your members will appreciate your real desire for commitment as you work to be inclusive of all market segments with accurate reporting and decision-making processes.
The commitment you make to be at the forefront of technology may not be as extreme as that of the pig, but your members will value your credit union when they see that you are keeping pace with technology and are interested in improving their experience. Havig a core processing partner that helps you manage compliance and even guarantees it will help with that commitment.
