I just heard about a disturbing occurrence in credit union land. It gets to the heart of the cooperation/competition dilemma facing the industry, and helps to explain why formerly useful and popular credit union round tables are now populated by tight-lipped, unwilling participants. Here is the deal. A credit union took a novel idea to a larger group of affiliated credit unions. The reason for taking this idea to the group was to expand the pool of resources that could be used to launch the project. NDA's were signed, etc. For whatever reason, a deal was not consummated.
Fast forward a few months, and the formerly uninterested large group of credit unions now has in development a strikingly similar (down to the minutest of details) offering. They are diligently working for a late-spring launch of this unique new idea that "they created."
I firmly believe in capitalism, competition, and the philosophy that to the victor go the spoils. But I also believe in adding fairness to the mix. Stealing, which this is, is wrong. Credit unions stealing ideas from other credit unions is even worse.
I do wish I could divulge the name of the group, and not doing so in some ways undermines our "unfiltered thoughts and opinions" objective for the blog, but I also want to avoid a legal entanglement - at least for now. The facts will emerge, and the organization that has the very real expertise in managing the type of product in question will undoubtedly run circles around this inexperienced collection of thieves. That may be payback enough. It will certainly be enjoyable to watch.
The real tragedy here, however, is that once again credit unions are splitting resources in launching a volume-driven product. We've been down this road before, particularly in the mortgage market. Suppose that these two groups both attract 50 new clients in 2008. Rather than bargain on price reductions based on 100 relationships, each will be stuck at a bargaining position half as much as what "could have been." Members are the ones hurt here, which in turn lessens the competitive standing of credit unions in general.
When will we as an industry come to our senses and stop certain bully's from taking credit unions off the table as a competitive option for members nationwide.
