Trusted News for Credit Union Leaders
Credit Union Times
APRIL 5, 2017 | VOL. 28 | NO. 11 | CUTIMES.COM
Y16
A DISRUPTION
Rule Breakers Set the Rules
JIM DUPLESSIS
jduplessis@cutimes.com
ome people seem to
love shopping for cars,
but for most, the process is more like a root
canal without the painkiller.
Selling cars has been confined
to businesses that own a lot and
hire sales personnel, usually on
commission.
That model is being disrupt-
ed by companies without a sales
force and with few, if any, physical
locations.
In the case of Uber, a company
that exists almost entirely online
has been able to make real money
by connecting people who want to
generate cash from the cars they
drive with people who want to arrange their own rides.
Credit unions don’t have to
care about how people buy cars
or meet friends on the week-
ends. Narrowly, they should only
care about loaning money to car
buyers.
And companies like Uber, Carvana and Lending Tree don’t have
to make loans to utterly disrupt
the lending business.
Michael Cochrum believes it
behooves credit unions to understand why.
“The people who are disrupting
their market segment are typically
tech companies that have figured
out a way to ease the customer’s
pain point,” said Cochrum, vice
president of analytics and
PETER STROZNIAK
pstrozniak@cutimes.com
he additional Fed rate
increases expected this
year hearkens a CEO
back to December
1996. Then former Federal Reserve Chair Alan Greenspan uttered the unforgettable words, “
irrational exuberance,” over the dot.
com expanding bubble. In 2000,
he raised interest rates several
times and many believe it led to
the dot.com bubble to burst over
a two-year $5 trillion stock market
crash.
Todd Harris, president/CEO of
the $2.1 billion Tech Credit Union
in San Jose, Calif., worries that
history is repeating itself with irrational exuberance part 2 over
Trump’s promises of expansive
economic growth coupled with
more Fed rate hikes that could
lower loan demand over the
long run and stall the industry’s
growth.
But other credit union executives argue the rate hikes in December and March, and the ones
expected to follow, signal the
Fed’s confidence of self-sustaining economic expansion, which
will boost consumer confidence
and more people will take out
loans, at least through 2017.
Nonetheless, both sides agree
that if the economy continues to
grow and higher interest Y18
‘Irrational
Exuberance’
Take 2
RATESFOCUS
MOBILE BANKING &
PAYMENTS
Mobile and payments:
Together, they’re the digital
banking power couple. To
keep their relationship
strong, credit unions must
provide members with a
harmonious, integrated
experience while staying on
top of trends. Learn more in
this Focus Report. Y6
HEALTH CARE
What’s Next?
House Speaker Paul Ryan and
his allies had what looked like
the big gorilla of efforts to change
the Affordable Care Act.
Now that the American Health
Care Act bill appears to be dead,
or, at least is doing a convincing
job of playing dead, other ACA-change proposals are getting
more attention.
Any would-be ACA changers
who want to make some kind of
health coverage available to consumers in the individual market
in 2018 need to act quickly, because health insurers are supposed to be developing filings for
2018 products now.
Even carriers willing to overlook the reality that making a
profit in the individual market has
been difficult since January 2014
are having a hard time knowing
how they can sell sustainable coverage in 2018 without knowing
what the support programs, or basic market rules, might look like.
Here’s a look at four possible
solutions that are now getting
more attention.
1. Ask Seema Verma
Tom Bulleit, a Washington-based
partner at Ropes & Gray LLP, said
in a written commentary about
the cancellation of the AHCA bill
vote that one obvious outcome
could big a bigger role for the
U.S. Department of Health and
Human Services, and the new
HHS secretary, Tom Price.
Price “may undertake larger administrative efforts Y14
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