Conference 7.286::dcu

    
    Re: .0
    
    Well, it is CRYSTAL clear to me where my votes will go.  The
    basenote here is completely in line with my thinking:  Profit
    is important, but not before people.
    
    Thank you!
    Steve
    

    Re .1
    
    Your note is appreciated.
    
    For myself I decided I really had to run this year. Too many people
    were saying to me things like:
    
    "You know Dave this DCU is a joke. My wife is in xxx credit union.
     We compared the rates for loans with the DCU. DCU's were mostly
    higher. I no longer keep much money in the DCU either."
    
    I've heard several variations on this. I believe that the above is
    true because the credit union is being taken in totally the wrong
    direction. The DCU management under the direction of the current board
    seem to be steering the credit union towards a fee based institution
    where you have to have a complex relationship with it.
    
    It is my belief that most people don't want the above. What they want
    is the ability to get loans at better rates than they can get elsewhere
    and get a bit more on savings than they could get at a local bank.
    This should be possible. The credit union, unlike a bank, does not pay
    taxes. It is also fairly heavily indirectly subsidized by Digital
    through the use of Digital real estate. With that sort of advantage,
    and a membership that has an EXTREMELY low level of loan defaults the
    credit union should be able to be very competitive. But it is not.
    The focus is all on gaining short term profits and using the
    "Relationship BANKING" (note the name) concept to artifically decide who
    should and should not be members.
    
    I'd like to see a direction change.
    
    	- Basic Services for Free
    	- Encouragement to use the credit union through offering rates and
    	  services that are better than those obtainable elsewhere
    	- Listen to the membership. No complicated fee structure.
    
    In this election there will be a choice.
    
    Dave

    Yes, this will be a no-brainer for me too.  I just hope I can get the
    word out to enough people to make a difference.
    
    Bob

to the authors of .0.  Please post permission for this statement to be forwarded
to DCU membership.

Thanks.

Elaine

    
    Re: .5
    
    > I want that too and am willing to put my money behind it.  It seems to
    > me there are some people out there that want all the benefits yet who
    > only want to keep enough in the credit union to cash a check.  This is
    > a co-operative.  You have to put something in to get something out.  In
    > my mind, $5 just doesn't cut it.
    
    I would bet if we got our hands on the data we'd find that the number of
    persons who do this is very small.  
    
    My suspicion is that for the most part the low balances are cases
    where persons have only a few hundred or so in there, *because* they
    don't have the income to support building up substantial savings. It is
    just *because* this is a co-operative that I don't want to see them
    hurt.  The last thing people on the lower end of the income spectrum
    need is another nickel or dime yanked out of their pocket.  I trust
    that as they get experience and skills and their income grows that
    they'll be saving and contributing as well.
    
    Steve
    

    
    Re:
    
>to the authors of .0.  Please post permission for this statement to be forwarded
>to DCU membership.
    
    Actually you don't need permission to extract notes and forward them.
    But that said. We give full permission to anybody to extract and
    forward .0. Please do so if you know of people who may be interested in
    it.
    
    Regarding people with $5 savings accounts and nothing else. It is my
    contention that the reason these people don't have more savings or a
    loan is because DCU isn't currently offering competitive services.
    Instead it is more interested in driving members and their savings away
    to decrease the asset line and hence improve the capital ratio. I think
    this is plain wrong. If DCU offered services these $5 members wanted
    they'd begin to use the credit union again. It is DCU's fault these
    people have reduced their accounts to minimum, not the members fault.
    
    Just maybe these $5 members are hanging on in the hope that they can
    have an impact in the next election and help steer the credit union in
    a direction that they'd like to see.
    
    Dave

    
    RE: $5 accounts
    
    From where I sit, I see NO REASON that DCU should not be the FIRST and the
    BEST choice for ALL current and eligible DCU members.  The advantages
    that DCU has are HUGE: no taxes, free facilities (branches = no rent,
    HQ is owned), excellent sponsor support and a membership base that most
    CUs dream of.  With all these advantages, I must ask why do so many
    members, and potential members, choose not to do their business with
    DCU.  I must come to the conclusion that the main problem does NOT lie with
    the members, but with DCU itself.  After all, people generally do what
    is in their own financial best interest.
    
    A major flaw is that we are comparing ourselves to banks, and thus
    pricing ourselves like a bank.  When members hear or shop around and
    see that their credit union is roughly the same, they ask themselves
    "Where is all the benefit of membership?".  DCU is a credit union and
    must act as a credit union, otherwise we loose a VERY important
    differentiating factor.
    
    I have watched being implemented (and tried to fight against) what I
    consider a very dangerous approach to doing business: namely that you
    can pick and choose your customers and treat some better than others.
    This is not only an approach, but an attitude.  I believe it is the
    beginning of the road to an "upscale" credit union where the some
    members are more equal than others.  It leads to what I consider absurd
    pricing decisions based on how much money you have, not whether the
    credit union can offer a service or product to a member and they can
    BOTH be better off in the end.  
    
    A prime example is this is our credit card offering.  The profits to be
    made in this area are huge.  I would venture a guess and say that most
    DCU members either have cards or qualify for them.  Now, shouldn't the
    credit union be working to make sure that EVERY DCU has a DCU card and
    uses it?  Breakeven for people who don't carry a balance is
    around $2000 in charges a year.  But with so many free cards out there,
    as well as many cards now offering rebates, etc., our card is being
    given free to those that are "relationship members" whether they use
    them or not.  So a potential gain for both the member and DCU is
    treated as a giveaway goodie.  The amount the credit union takes in in
    annual fees is not that much.  Is it worth all the lost business and
    potential income (from balances and interchange income) to maintain it
    as a goodie for those members that meet DCU's marketing profile???  The
    result is that many DCU members take their credit card business
    elsewhere, DCU loses, and every other member loses also, because lost
    income hurts the entire cooperative.
    
    I think Steve said it best, DCU must be about PEOPLE, not profits. 
    Offer the membership (the ENTIRE membership!) services like a credit
    union and DCU won't have time to worry about petty checking account
    fees.  If I had to choose, I would choose a larger credit union that
    served all of its members but made slightly less than we knew we could
    over a credit union that tries to cull out the membership until only
    "profitable" members remain who are squeezed for as much as can be gotten.
    We need EVERYBODY to make this whole thing work as it was designed.
    

    
    Re: .11
    
    > Offer the membership (the ENTIRE membership!) services like a credit
    > union and DCU won't have time to worry about petty checking account
    > fees.  If I had to choose, I would choose a larger credit union that
    > served all of its members but made slightly less than we knew we
    > could...
    
    Amen!  With the advantages DCU has and a membership base of over 
    80,000 there is no reason why it shouldn't be doing so much business
    that checking account balances are a nit.  It's the old market share
    issue.  DCUs "market" is employees and family members of employees.
    If the DCU went after the goal of being the primary financial
    institution servings its members *instead of* measuring how much profit
    they make per member they'd be so busy they wouldn't have time to...
    
    Steve
    

Re: .12

I wonder if we are still over 80,000 members.  I asked several months ago, but
no one seems to know exactly how many members we currently have.

    Other than "protest accounts", I doubt there are that many $5 account
    members.  I also doubt that they cost the DCU very much.  Note that the
    Board has *never* stated any kind of breakeven point for members with
    low amounts on deposit -- all they've ever said is how much less we're
    making than we would if they had higher deposits.  
    
    The "protest accounts" will all be taken care of by the next election
    (either they'll increase their deposits or leave entirely), but what
    should we do about the remaining $5 account members?  There are two
    directions we can go:
    
    1)  Use fees as a stick to punish them into leaving, so that they no
    longer burden the DCU.  Don't expect many people (especially DECcies)
    to respond to the fee stick by increasing their accounts -- expect
    them to respond by leaving.  
    
    2)  Use incentives to encourage them to use the DCU for more of their
    financial business.  All of the evidence that's been cited indicates
    that the vast majority of low balances are due to people using other
    institutions, rather than because they simply don't have any money.
    
    That's the choice we've got to make in this election.  Three of the
    candidates line up firmly behind choice 2 and two of them have voted
    for choice 1.  
    
    I believe that choice 2 is not just better for the DCU -- I believe
    that it is better for ME as a (relationship) member.  I'm also willing
    to help my fellow DECcies, but I believe that I will lose NOTHING if
    the DCU changes over to choice 2.  On the contrary, I think the DCU
    will be stronger and better able (and willing) to serve my needs.  
    
    So whether one is altruistic or self-directed, I think the smart choice
    is for the DCU to pursue choice 2.  Voting records show that that isn't
    likely to happen unless Phil, Dave, and Chris are all elected to the 
    Board, joining Paul Kinzelman to make a true "Real Choices" majority.
    
    		Enjoy,
    		Larry

    
    RE: .13
    
    I'll get the exact figures but I believe are below 80,000.  One of the
    reasons is that last Sept. we had a drop of 7400 members.  I also had a
    stroke when I saw it.  I was told that the number was mostly members
    that had been hit with inactivity fees until there balance dropped
    below the $5 min. as well as totally inactive accounts.  A LOT of potential
    right out the window.  It is one of the primary reasons I feel DCU must
    change its attitude and approach.  
    

    RE: .11
    
    "Why do so many members choose not to do business with DCU?"
    
    Case in point.  Current new vehicle loan rate for 48 mos. is 6.9%.
    Another Credit Union we belong to here in Colorado Springs just gave us
    a 48 mos vehicle loan for 5.5% and we had the cash in hand the very
    same day we approached them for a loan (although I don't know if the
    DCU operates this way, didn't ask about it).  Nowadays you have to go
    where it hits your pocketbook the least.
    
    Asked about interest rates on savings, etc., and received a better
    picture there too.
    
    Also, about the comment awhile back about the DCU becoming
    "upper-class" (not sure if that's the exact wording).  Look at the
    attitude of some of the board members, specifically the chair"person".
    
    No wonder we're getting disenchanted.
    
    
    jw
    (a member in "good standing", who thinks that type of distinction is
    ridiculous)

I am a little confused, and concerned, about DCU's approach about fees.

It seems that if you are not a large saver, and you don't currently
have a loan, you get fees.  These people then leave DCU and DCU 
management cheers.  Note this means they don't apply here for the
next loan they need.

Now, the people who are large savers frequently do not need to get
a loan (besides mortgages, I guess) because they have the cash to
buy what they want (or the financial knowledge to go elsewhere for
good rates).  So we end up with large savers and no loans ... which
means our interest rates can't be very high, which means the large
savers leave DCU and DCU management cheers because now their ratios
look better, since they aren't getting enough loans and have too
much in savings.

We must encourage the people needing loans to get them with DCU, with
the best interest rates (not just competitive) and with NO FEE savings
and checking accounts to keep them "hooked" into DCU.  I approve of 
the $5 savings members, I want them to stay, I want them to get loans
with DCU.  We need both people who save and people who need loans to
keep this a viable credit union.  Somebody has to pay the interest on
those deposits.

I will be voting for the three NO FEES candidates.  I applaud them for 
taking the time and effort to try to make this a better credit union.

I wonder how much of our "record profits" is due to people refinancing
mortgages, and what happens when rates go back up and we no longer
get much profit from this activity?

> I am a little confused, and concerned, about DCU's approach about fees.
>
> It seems that if you are not a large saver, and you don't currently
> have a loan, you get fees.  These people then leave DCU and DCU 
> management cheers.  Note this means they don't apply here for the
> next loan they need.

This is precisely what DCU is doing, and you have every right to be
confused, and angry about this practice.

The bottom line here is the capital ratio.   In a perverse way,
driving away members (ie, decreasing the asset base) helps the
capital ratio.   DCU seems nearly fascinated with the prospect
of bringing this number up as quickly and dramatically as possible,
without regard for what falls by the way.  

> We must encourage the people needing loans to get them with DCU, with
> the best interest rates (not just competitive) and with NO FEE savings
> and checking accounts to keep them "hooked" into DCU.  I approve of 
> the $5 savings members, I want them to stay, I want them to get loans
> with DCU.  We need both people who save and people who need loans to
> keep this a viable credit union.  Somebody has to pay the interest on
> those deposits.

Every member that we drive away with "upscale banking," "relationship
banking," or whatever name for it is in vogue is a lost opportunity
for future business.  The individual or family that can't save a lot
or borrow a lot right now may very well be able to do so in the
future.   And besides, who cares how much you save or borrow?  That's
none of DCU's business.  Their business is to help with financial
services without regard to levels of income.

Something that DCU has seemed to completely miss is something
that others have touched on here, and that's attitude.   The 
whole "relationship banking" program is just a means by which
DCU can dictate the type of member it wants.   What DCU calls
credit union "abusers" I call small savers; what they call "waste"
I call the cost of doing business.   The only "relationship" a
member should be required to have is eligibility in the field 
of membership.  This isn't a country club where some higher
power should pass judgement on our fitness for membership, it's
a financial cooperative who's primary concern should be service
to Digital employees and their families.

> I will be voting for the three NO FEES candidates.  I applaud them for 
> taking the time and effort to try to make this a better credit union.

Thanks for the support!

Chris

    
    Re: .14 and .17
    
    > That's because there are very few people taking out loans
    > with DCU due to their uncompetitive rates.  
    
    What is the "cost of ownership" of one loan vs. another?  Rates
    don't tell the whole story.   Gasp, you're going to see me say
    something good about DCU!  
    
    I bought a new Saturn SL2 in November and financed with DCU.  In .17,
    the DCU rate of 6.9% is compared to a local rate in Colorado of 5.5%.
    My loan was $7965 for 42 months at 6.9 is $213.98 a month.  At the 5.5%
    rate the same loan would be $208.89 so I would have saved $5.09 a month
    on the payment, BUT ...
    
    At the DCU they do it payroll deduction ($53.50 weekly) AND apply
    the weekly deduction to the balance weekly.  On paper it's a monthly
    installment.  I get a double benefit: 1) for the same money paid out
    as on a normal monthly installment loan, to get a 13th payment made
    each year AND since the money is applied weekly, the principal is being
    reduced more quickly.  The loan will cost me less this way at 6.9%
    than with someone else at 5.5% where I'd have to mail in a monthly
    payment.
    
    The DCU should be selling the h*** out of this, but they don't.
    You have to be astute enough to figure it out for yourself.
    
    Steve
    

    RE: .18
    
    Exactly!  Short term "success", long term failure IMO.  Precisely why I
    have decided to break with "tradition" and run for the Board with two
    other people who feel DCU must look beyond today's bottom to the bottom
    line 3-5 years down the road.  As somebody else put it to me, "Cut
    your way back to profitability".  Wonder where we've seen this before?
    
>I wonder how much of our "record profits" is due to people refinancing
>mortgages, and what happens when rates go back up and we no longer
>get much profit from this activity?

    Funny you should ask because I asked this precise question at the last
    Finance & Investment Comm. meeting.  It was estimated that roughly $1
    million profit was due to the refinancing binge.  We are estimating far
    less in the coming year.  But we were wrong last year and could be
    wrong again.  Guessing where interest rates will go and how people will
    react (if they go start going up it might spur people who have been
    fence sitting to refinance) is such a shot in the dark.  Also, DCU has
    begun servicing all mortgages it sells.  This will provide a steady,
    and growing, income to DCU, as well as maintain membership
    satisfaction.
    

    RE:  .20
    
    No, actually, the DCU isn't the only institution who will deduct weekly
    from your paycheck.  It's more common than you think.
    
    jw 
    
    (A finance person who is "astute" enough to figure that out)

    
    Re: .23
    
    > It's more common than you think.
    
    I realize that payroll deduction is common, but that isn't what
    reduces the cost of the loan.  That's just a convenience issue.
    What about weekly reduction of the loan balance?  Do the others
    do that as well?
    
    Steve
    

Actually, it works the other way around in terms of savings.  DCU MUST FEEL
ABLE TO LOAN OUT YOUR SAVINGS to make money.  They cannot make money on
having your money sit in the DCU vaults ... even if loaned ona day to day
basis with the Federal Reserve.

The only way they can loan out your savings is if they get "quality savings",
which are high value long term savings.  Small value accounts, or highly
dynamic accounts cannot be loaned out, except on a daily basis to the
Reserve, which earns DCU less than we get.

With quality savings, these funds are available to make loans to members,
at rates sufficient to pay operating costs and interest.

So, to improve the status of the credit union, they need more quality
savings.  (This is why the assorted "club" accounts which allowed withdrawals
at any old time were actually "costly".  DCU could not rely on the money
there to be able to loan it out.  A closed withdrawal account is much easier
to loan out.)

This is also why the almighty Capital Ratio is so important.  Essentially
it is a measure of how well DCU can cope with withdrawals of members
savings.  (Eg Say you have invested $1000 with DCU, and they have loaned it
to me.  If you came in today and withdrew that money, rather than calling
my loan, DCU draws on its capital ratio to pay your money back.)  The higher
the Capital Ratio, the more of DCU's "lesser quality" savings can be loaned
out, and thus allow more loans.  By allowing more loans, you should be able
to reduce the interest rates on those loans.

In implementing fees, DCU wants to discourage the small, dynamic saver
who puts $50 a month into savings, then draws it out next month.  That
$50 cannot be loaned out unless DCU's capital ratio is excellent.  They
want the saver into savings for the longer haul, because that can be loaned
out.  Fees will also have the effect of improving the Capital ratio.

In essence the capital ratio is a measure of the money that DCU 'owns'
versus the money members have on deposit.  The money DCU owns comes from
its profits.  It gives DCU the ability to cover losses, like the Mangone
scandal in big time, and Joe Borrower's default in small time, while main-
taining DCU's member liabilities = DCU's member assets on deposit.

To say that the equation is complex is an understatement. 

Yes, a good capital ratio is an admirable goal, but given that we should not
be subject to major fraud again (if the board and Sup. COmmittee are doing
their job), and that the member defaults are extremely lower than average,
DCU should not be aiming for an ever increasing Capital Ratio in such an
almighty hurry.

DCU could achieve quality savings by biting the bullet and offering better
than competetive rates, and if short term quality savings are such a problem,
then modify some of the terms of the accounts.  The fees, especially as
written, are not a real reflection of recouping the cost of "non-profitable"
accounts, but rather a stick to get rid of non "quality" accounts.

As I have said many times, if fees were really to make accounts profitable,
then they would be based on a per-transaction basis ... after all, the
chequing account which has 50 cheques per month on it is far more expensive
to operate than the one with 5 cheques written on it.

Stuart

    RE:  .24
    
    Yep, reduction of the loan balance as well. (wouldn't let them have my
    money weekly if that wasn't the case).
    
    jw

    
    Re: .26
    
    Well in that case all else being equal, the rate tells the story.
    
    Steve
    

>          <<< Note 739.13 by CADSYS::RITCHIE "Gotta love log homes" >>>
>
>I wonder if we are still over 80,000 members.  I asked several months ago, but
>no one seems to know exactly how many members we currently have.
    
    
    Current membership is  74,053 as of 12/31/93.  
            membership was 84,684 as of 12/31/92.  
    
    
    -- 1993 --		Members		Change
    April		 83,975
    May			 83,856		- 119
    June		 83,858		+   2
    July		 83,789		-  69 
    August		 83,671		- 118
    September		 76,011		-7660
    October		 75,626		- 385
    November		 75,223		- 403
    December		 74,053		-1170

    
    
    Note the tremendous change Aug-Oct...  About the time fees were 
    "reintroduced"
    
    August		 83,671		- 118
    September		 76,011		-7660
    October		 75,626		- 385
    
    It doesn't take a genious to figure it out...  It'd be an intersting
    exercise to determine after what day the bulk of those accounts left in
    September...   Looking back at the minutes shows 22-sep-1993 was the
    date Phil posted the Unredacted BOD minutes from April 27, 1993 when
    the fees were first introduced to the board... THings that make you go
    hmmmmm.... 
    
    Phil, gotta ask.. you're not gonna get in any kind of "hot water" or
    get some kind of "censorship thing" from the BOD are you?   I'm sure we
    all appreciate the cold hard facts you are bringing to light.. I just
    hope that the other not so sharing and caring members of the board will
    be "offended"...
    
    
    
    John
    

    
    I'm fairly certain that Phil is well past the "hot water" stage, and
    I'd like to personally thank him for taking the heat.
    

    
    Interesting.  The DCU loses 10631 members during 1993 and 72%
    of those leave in September.  It doesn't take a genius to figure
    out that something happened around that time which precipitated
    the exodus.  It might also be interesting to know whether there's
    data about those accounts.  Where they active?  Did they borrow
    money?  Did they have long term CDs? etc.
    
    Steve
    

    re: .28
    
    	This question really needs to be asked of the entire BoD
    
    Why was this 10% drop in membership in Sep (-7660) to not mentioned in the 
    October or November BoD Minutes?  Membership #'s are (or of right ought
    to be) easily tracked, and such a radical change in the status of the
    CU should have been brought out in a board meeting and brought to the
    attention of the BoD and the membership.
    
    
    	Peter McA'Nulty
    	Concerned, but quiet notes reader

    If the candidates are really concerned about the ENTIRE membership,
    let's hear some talk about the class distinction that currently
    exists between remote members and GMA members! 

    What about the FEE remote members have been paying all this time
    because we don't have access to DCU ATMs and branches?!?!?! AND we have 
    to make deposits through the U.S. Mail for heavens sake!

    Eliminating fees on basic services is good, but I'll vote for ANY 
    candidate that commits to making life easier for remote members.

    Paul

Thanks for digging up that info, Phil.  All I can say is

W O W !

followed by

*Sigh*

It sounds like the Prez and those that listen to him on the BOD have this loss
of membership all justified in their minds.  They think it is inevitable, or
something they have had no control over, or a good thing (lose the abusers).

I wish I had the time to explore the other credit unions in my area, one of
which I am a member.  I know there is a lot of growth taking place in credit
unions besides DCU, despite economic downturns and low interest rates.  The
lines at ICFCU at Searstown in Leominster are out the doors on Saturday morning.

Thanks again, Phil.  This credit union management never ceases to amaze me.

Elaine

    I think Mr. Badger completely missed the point.  He also missed the
    point that children are exempt from fees on their savings accounts.
    
    I think some people are jumping to conclusions regarding the drop in
    membership.  Wasn't Digital laying off around the same time?  I
    wouldn't be surprised to learn that membership dropped because of the
    new fee structure, but I'd be very surprised if it was the only reason.
    
    To whoever said it is very easy to find higher interest bearing
    accounts outside of DCU, I'd like some more info on that.  My scans
    through the local paper don't bare that out.  Maybe there are some CUs
    which are outside of my membership ability that I've overlooked as
    well.

    re: .34
    
    I agree but I also realize that at any point in time, one group of
    members will be 'subsidizing' another.  That's part of what a credit
    union is all about.  I know that because my nearest DCU branch is about
    1000 miles away, I will never get the same services and service that
    those in the GMA do.  I do expect them to make dealing with them as
    easy as possible for those of us not near a branch.
    
    Bob

Just because Digital has transitioned people doesn't remove their eligibility
for continued membership in DCU, nor from joining again.  From what I read,
membership was for employees and ex-employees.

It may make doing business a little less convenient, but no more difficult
than Bob Ainsley's is for example.

If transitioned people were closing their accounts because they thought they
must, then that is something DCU should actually address.

Stuart

    
	RE .29 & .25    
    
>	SCUM SMALL SAVER
    
	Since not everybody in this world is born into money, wins the
    	lottery or has a large inheritence, we were all "scum small savers"
    	at one point.  (And don't forget scum small borrower).
    
	RE: .30
        
>    Phil, gotta ask.. you're not gonna get in any kind of "hot water" or
>    get some kind of "censorship thing" from the BOD are you?   I'm sure we
>    all appreciate the cold hard facts you are bringing to light.. I just
>    hope that the other not so sharing and caring members of the board will
>    be "offended"...
    
    "hot water"?  Sometimes hot water is required, depending on the task at
    hand.  But why would anybody care about a posting of declining
    membership numbers?
    
    "censorship thing"?  There is nothing confidential about how many
    members we have and how many we did have.  It would even be valid to
    request this information from DCU via formal request.
    
	RE: .31
        
>    I'm fairly certain that Phil is well past the "hot water" stage, and
>    I'd like to personally thank him for taking the heat.
    
	I really don't see the "hot water" issue here.  Simply stating my
    	opinion, backed up with some concrete fact, and willing to offer
    	the membership a clear choice in the direction of their credit union.
    	Guess it does go a tad against against "tradition".  Oh well, add
    	that to the list of charges... ;-)
    
	RE: .28
    
    >    	This question really needs to be asked of the entire BoD
>    
>    Why was this 10% drop in membership in Sep (-7660) to not mentioned in the 
>    October or November BoD Minutes?  Membership #'s are (or of right ought
>    to be) easily tracked, and such a radical change in the status of the
>    CU should have been brought out in a board meeting and brought to the
>    attention of the BoD and the membership.
    	
    Don't know.  We get detail monthly, on number of members (I requested it
    when I first got on the Board) and accounts.  Until recently, the
    changes have not been all that large and it wasn't usually noted in the
    minutes.  But you're probably correct in that it should have been.
    
    RE: .36
    
>    I think some people are jumping to conclusions regarding the drop in
>    membership.  Wasn't Digital laying off around the same time?  
    
    Digital has been laying people off regularly for the last 2 years
    haven't they?  Also, getting layed off from Digital does not mean
    people close out accounts and leave.  We have over 20,000 family
    members and ex-employees to bear this out.
    
    RE: .38
    
>Just because Digital has transitioned people doesn't remove their eligibility
>for continued membership in DCU, 
    
    Correct.
    
    >nor from joining again.  From what I read,
>membership was for employees and ex-employees.

    Incorrect.  Once you leave DCU, if you aren't an employee or the family
    member of an employee, then you can NOT rejoin.  You have left the
    field of membership.
    

    re: .39  I guess I left off the :-)  It makes no sense for DCU to offer
    mortgages somewhere that they don't have an office.  I don't think the
    volume would be great enough to justify them paying a broker to try and
    peddle them in Texas.  I was just trying to show that there never will
    be a time when all members are equally equal.  After all, DCU couldn't
    offer a home equity line of credit in Texas if it wanted to, since 2nd
    mortgages for something other than taxes and home improvements are
    prohibited by the Texas Constitution.
    
    Bob

    re .41 and membership ...
    
    Phil,
    
    Do you not believe that DCU should make it clear to existing members
    that if they are transitioned, or otherwise leave the employ of the
    company, that they are entitled to maintain their membership in DCU ?
    Through a comment on the statement, or an entry in Network etc ?
    I don't recall seeing anything.
    
    Stuart

    
    RE: .42
    
    Bob, actually it may make sense for DCU to offer mortgages in Texas, or
    anywhere else, if there is enough demand for it and it would offer a
    reasonable return on the effort involved in setting up and maintaining
    the program.
    
    RE: .43
    
    Stuart, nobody is telling people that are transitioned that they have
    to leave DCU.  I've never heard anybody even wonder about this.  DCU
    has run promos in the Network brochures which state "Once a member,
    always a member".  I certainly don't think people are leaving DCU under 
    a mistaken impression that they must since they no longer work for
    Digital.
    

    If someone leaves Digital and takes a job outside of the GMA area, does
    it make sense to keep an account with DCU?  Even if they stay within
    GMA, what if their new employer offers a CU with a branch in the place
    of work?  Why should a person maintain ties with DCU?  I've gotten out
    of CUs when it was no longer convenient to be a member.

>    Stuart, nobody is telling people that are transitioned that they have
>    has run promos in the Network brochures which state "Once a member,
>    always a member".  I certainly don't think people are leaving DCU under 
>    a mistaken impression that they must since they no longer work for
>    Digital.

Well, I think it would be a good idea just to affirm it  ...

>    If someone leaves Digital and takes a job outside of the GMA area, does
>    it make sense to keep an account with DCU?  Even if they stay within
>    GMA, what if their new employer offers a CU with a branch in the place
>    of work?  Why should a person maintain ties with DCU?  I've gotten out
>    of CUs when it was no longer convenient to be a member.

No argument there ...  but I'm just saying that for people who haven't
moved, and it wouldn't be inconvenient to do their banking at DCU, they
should be encouraged to stay!

Stuart

    Neither do I buy that argument ... but I am still saying that it would
    be a good idea to remind members that TFSO does not mean saying goodbye
    to DCU if it is still convenient for them.
    
    Stuart

    
    RE: reasons for membership decline
    
    The factor you point to has been present for the last years, yet
    DCU experienced no huge loss of membership, until...
    
    Also, it was requested that DCU determine the reasons for people leaving,
    including people who had left in this group.  It was opposed.  Instead,
    we'll be surveying people who leave starting in Feb. (I believe).
    

    
    Re: .51
    
    > Most people in here are assuming that the drop in membership is due
    > to the fee structure simply based on the fact that fees were
    > introduced ...
    
    While it is reasonable for you to ask the question and it may well
    be that TFSO has been part of the reason, the facts don't point to
    TFSO as a primary or even significant reason.  TFSO may be the
    reason for some who left each month during 1993 since TFSO has been
    going on right along, but of all members of the DCU who left during
    1993, 72% left in September.  The fees were announced in September.
    You can't be sure without data, but it is very unlikely that was a
    coincidence.
    
    Steve
    

                    <<< Note 739.52 by ASE003::GRANSEWICZ >>>

    
>    Also, it was requested that DCU determine the reasons for people leaving,
>    including people who had left in this group.  It was opposed.  Instead,
>    we'll be surveying people who leave starting in Feb. (I believe).


Not really a survey, but when I closed my share draft account last week I 
was not asked why.  I may or may not have answered, but I found it interesting
that no one cared about the why they were losing a customer.

al
    

    
    Re: .54
    
    My wife is nurse/supervisor at a hospital where late last spring they
    had a 10% layoff of hospital personnel because of declining admissions. 
    Some of the nurses working under her regularly MOAN and COMPLAIN when
    they get admissions onto their unit. She can't seem to get them to
    understand that those admissions are the CUSTOMERS WHO ARE PAYING THEIR
    WAGES.  Go figure.
    
    Steve
     

    re: many notes passim about scummy members..
    
    By the DCU's own rules, I am presently a "relationship member".
    
    I have a car loan with a balance of around $9000.  It's the third one
    I've had with them in 10 years.
    
    I have a $5 savings account.
    
    I have no other accounts at DCU.
    
    
    I guess I'll be a scummy member for a long time, considering what I
    presently do for banking services...
    
    
    My checking account is with BayBank (the largest retail consumer bank
    in Mass.), not because they are better than DCU on fees, but because
    they are ubiquitous in Massachusetts. With the account I have, I
    have a fixed fee no matter how many checks/ATM transactions I do. 
    (Like Bill Parke, my checking account has too high a velocity to keep
    it consistently over any "minimum checking balance".)
    
    I have a no-fee AT&T Universal Visa.
    
    I use SAVE for long-term savings.
    
    
    What would it take to move all of this activity into the DCU?
    
    
    1. A better ATM fee structure than the present one.  I live inside
    Route 128. If I had a DCU account, I'd be using non-DCU ATMs almost
    100% of the time. $1/transaction is waaay too steep.  There's at least
    one _commercial_ bank (in NH, sadly for me, not Mass.) that offers 100%
    free ATM access for any ATM in the U.S., plus at least one credit union
    was mentioned recently elsewhere in this file that had free foreign ATM
    access.  While "free" might be considered giving the store away, a
    better compromise might be called for.
    
    2. No checking fees. It's a bloody credit union, not a bank.
    
    3. Return my checks to me or use the electronic check imaging scheme
    mentioned elsewhere.  [BTW: BayBank _does_ offer this, but there's an
    extra fee, while returning physical checks costs $0.00 - choice here is
    obvious.]
    
    4. No-annual-fee credit card with competitive rates. [I tend to
    maintain a substantial balance on the card, so the rate is important,
    but the fee (or lack thereof) is (to me) a barometer of how much the
    issuer wants my business.
    
    5. Some sort of mutual fund scheme that gives rates comparable to the
    stock funds in SAVE.
    
    
    
    Until much of this changes, I'll continue to have a $5 savings account
    and get car loans.  [I use the DCU because of the utterly convenient
    payment plan, mostly, and the effective interest rate cut caused by the
    weekly payments.]  Another reason I'll keep it is to follow the
    goings-on and vote in people who will steer the DCU away from its
    present sham goals and towards its original purpose - giving Digital
    employees a place to put their savings and make loans, at fair rates
    all around - NOT to make a profit.  [Actually, since all depositors are
    technically the owners of the credit union, mustn't all profits be
    returned to the membership? Does this happen?]
    
    On the one hand, I'm scummy 'coz I cost the DCU some piddling change to
    maintain that $5 savings account. On the other hand, I'm a
    "relationship" member because I pay them many, many times more that
    cost in interest on the car loan.  Doesn't figure.
    
    
    back to lurking...
    
    John Francini
    

	I have been accused of posting "misinformation" in this notes
	conference by other Directors.  That "misinformation" consisted of
	EXACT membership numbers, which was the question that Elaine
	Ritchie requested (739.13).  Earlier that day, I posted what I
    	had been told was the reason for the large drop in membership (739.16).

	Since many of the other Directors read this conference and have
	yet to post any clarification of this "misinformation", I will
	post what the Board was given in our January Board package.  When
	we asked for this information back in September (when the large drop
	in membership occurred) it wasn't felt it was necessary to collect it
	since we knew the large drop was from "cleanup".  I will venture
	a guess and say that all the discussion in here around this topic
	spurred some movement on the collection of this information.

	So here it is:



				1993 Membership
				---------------

	New Memberships		2,670
	Closed Memberships     13,301
			       ------
	Net Change	       10,631


	Closed Memberships:

	o  Inactive < $5.00 and no other accounts		7,465
	o  Branch Closure					  483
	o  Escheat (inactive for 3 years)			  662
	o  Loss Policy - Member Closed				   50
	o  Checking Account Abuse - Member Closed		   93
	o  Dormant						  519
	o  Prior Year Clean Up					  788
	o  Layoffs & Other					3,241

	Total						       13,301



				Memberships 1993

         Net Digital  Net Family       DCU Closed         Possible Causes for
Month     Employees    Members         Memberships        Additional Closings
-------  -----------  ----------  --------------------  -----------------------
January     <231>         0                             Westminster/Springfield
                                                        branch closings late 92

February    <198>        41

March       <225>        21                             Burlington, VT branch
                                                        closing

April       <152>        35                             Northboro branch closing
                                                        DCU closed 138
                                                        checking accts (abuse)

May         <150>        31                             DCU closed 117
                                                        checking accts (abuse)

June        < 83>        85

July        <120>        51                             June NETWORK received.
                                                        Article addressing
                                                        "relationship banking",
                                                        "cooperative" philosophy
                                                        & possibility of future
                                                        changes.

August      <162>        44                             1st escheat mailing
                                                        (3 years inactive)
                                                        to 1,538 members

September   <7646>      <14>    7,465 $0 & inactive     2nd escheat mailing
                                                        First TIS Account
                                                        Pricing/Structure
                                                        Mailing

October     <270>      <115>                            1st dormant mailing
                                                        (2 years inactive)
                                                        to 3,440 members.
                                                        Continued TIS Account
                                                        Pricing/Structure
                                                        reaction

November    <319>      <84>                             Westminster, MA branch
                                                        closing.
                                                        Continued TIS Account
                                                        Pricing/Structure
                                                        reaction.
                                                        Letter sent late Nov. to
                                                        760 members notifying
                                                        them of the closing of
                                                        all shares, excluding
	                                                Primary, due to previous
                                                        loan charge-off.

December    <1132>    <38>    662 escheat (Comm of MA)  DCU closed 117 checking
                                                        accounts (abuse).
                                                        TIS Reminder -
                                                        effective 1/1/94.
                                                        Letter sent late Nov. to
                                                        760 members notifying
                                                        them of the closing of
                                                        all shares, excluding
	                                                Primary, due to previous
                                                        loan charge-off.
           --------  ------
           <10,688>    57
           ========  ======


    <> = closed memberships

    RE:.60

    	I notice that DCU closed a number of checking accounts for abuse.
    Can you tell me what's the criteria for abuse and where these accounts
    closed with the permission of their owners or without?

    Joe 

    I see a couple of things. One is that we had a lot of inactive
    accounts. Questions that that suggests are: Why did we hold them
    on the books so long and how do other CUs handle them? Also why
    were there so many inactive accounts? Does this mean that we attract
    people who will never be active? For example, employees who join
    just because there is a DCU form in their new employee orientation
    packet. What can we do to entice these casual joiners to become active
    in the future.

    What's the difference between dormant, inactive, and escheat?

    Why did prior year clean up not show up until now? And why was this
    years cleanup almost 10 times as large?

    How much of layoffs and other is layoffs? I'm not surprised at the
    number charged to layoffs BTW. Nor to branch closings. Convenience
    is after all one of the most commonly used reasons for DCU membership.
    That, as an aside, strikes me as a clue to the kind of thing DCU needs
    to being to other services to get people to be more active members.

    			Alfred

    
>    One way would be to offer better rates on savings and loans.  But the
>    system ain't broke, so why fix it?
    
    Gee Keith, taking a statement from a discussion on a different topic
    and inserting it into this topic?  And just when I thought you had
    changed...  Oh well, I continue to hope.
    

    Sorry if I can think about 2 things at once and see their relationship,
    Phil.  I'm not a very good at looking at things totally in black and
    white.

    
    That's fine Keith, but please don't make it sound like it was said by
    somebody else.  Nobody in here has ever said, as far as I can recall,
    that "if it ain't broke don't fix it" applied to DCU's rates.  But that
    is the way your statement comes across.  But of course, I must be
    mistaken, or not reading it, or reading into it, etc.
    
    Like I said, I remain hopeful...

    "If it ain't broke, don't fix it" seems to be applied to the entire
    DCU.  Anytime a policy change has been announced or implemented we hear
    screams of agony.
    
    Improving capital ratio and cutting costs should mean better rates. 
    What really bugs me about the policies being announced and
    implemented is the goals of these are not being communicated.  I know
    the popular feeling in here is that some of the members of the BoD and
    the current management are doing this all for their own egos and their
    own hidden agendas.  Sorry, but I don't buy that.  
    
    IMO, the anti-fee folks aren't doing a very good job of communicating
    their goals either (I'm sorry but "being a CU not a bank" just doesn't do
    it for me).

re: .70, anti-fee folks aren't communicating goals well...

What part aren't we communicating well about?  I thought we had
spelled things out very clearly:

1.  Fees are unnecessary.  DCU's revenue picture is in fine shape,
    the credit union has experienced record earnings in the most
    recently completed 2 years.  Capital ratio growth is on track
    without a fee structure. 

2.  The Relationship Banking model is one of many possible business
    models that could be used by DCU or any other credit union. 
    The goals of Relationship Banking, however, are incongruous with
    the goals of a credit union.  Relationship Banking seeks to put 
    up a class structure, in which fees are levied against those
    with little debt and/or savings.  The net effect of this is to
    drive away small savers/borrowers who might very well become
    large savers/borrowers in the future.  In short, it drives
    away business.

3.  An integral part of my plan for continued success for DCU is emphasize 
    the importance of the membership.  What this equates to is striving
    to bring in more business for DCU by (a) Providing a competitive
    rate structure which encourages existing members to think of DCU
    first, rather than second or third;  (b)  Emphasizing making it
    more convenient and easy to access DCU services;  (c)  Working to 
    increase the membership of DCU:  there are literally thousands of
    people in the field of membership who are not members.  

4.  DCU insists on comparing itself to commercial banks rather than to
    it's real competition.  DCU must understand where the competition
    truly is, and then make appropriate changes to meet this competition.

5.  The primary, overriding concern of all management should not be
    simply "make all the money you can."  DCU must make money, and
    must retain income.  But a goal for a member-owned financial 
    cooperative should be to generate necessary revenue, and return
    some part of proft above target levels to the membership in the
    form of bonus dividends or loan interest rebates.   This is different
    from a commercial bank, where the overriding concern of management
    is to keep its shareholders and Wall Street followers happy.

6.  Management should learn to evaluate themselves not just in terms
    of profit, or in terms of the capital ratio, but also in terms
    of levels of member satisfaction, and growth of the membership
    base.


These points above are the crux of the matter, as far as I'm concerned.
I'm curious as to which of these points haven't been clearly articulated
in the past, or which aren't crystal clear right now.

Chris

    
    Re: .70
    
    > IMO, the anti-fee folks aren't doing a very good job of communicating
    > their goals either (I'm sorry but "being a CU not a bank" just doesn't do
    > it for me).
    
    Keith, There have been numerous reasons given as to why folks are
    opposed to fees and what their goals are around it.  You may disagree
    with the reasons or goals, but they *have* been stated and it seems 
    they are clear enough to everyone but you.  So if you want to say that
    they aren't clear to YOU then I have no issue with you over it.  If,
    however, you simply don't want to accept them please own that and stop
    saying what isn't so.  
    
    
    Steve
    

    RE .-1
    
    DCU is hardly competitive with commercial banks on rates. I assert that
    the marketing literature compares DCU against banks because
    banks tend to have worse rates/services than credit unions. DCU as a
    subsidsized non profit cooperative that doesn't pay taxes should be
    able to blow any bank way. It doesn't. And as pointed out in many notes
    other credit unions:
    
    	a) Treat their members much better (no "I can close your account
           right now") rather ("How can we serve you better")
    
        b) Have better rates than DCU.
    
    	c) Don't have a myriad of petty fees.
    
    DCU COULD be better than banks and comparable to other CUs. Today its
    service is comparable to banks and its rate structure worse than other
    CUs. Added to that it treats its members with the attitude of.
    "If you'd like to do business with us fine, if not go away". A
    successful institution should be much more in tune with customer
    satisfaction.
    
    In .71 Chris sums up very well what the 3 "anti-fee" candidates
    (Phil Gransewicz, Chris Gillett and myself) stand for. People that I've
    talked to have had no difficulty comprehending our position. I honestly
    believe that you don't either. You just seem to love playing devil's
    advocate.
    
    Dave

    Do commercial banks pay taxes?  Do commercial banks pay for facilities? 
    If so, that is a considerable expense that DCU does NOT have to bear. 
    
    Without those considerable expenses, we are only "competitive" with
    a commercial bank?  Where is all that money that we don't have to spend
    going?
    
    Bottom line is that you BECOME who you benchmark against.  DCU compares
    itself to large banks, thus it should be no surprise to find DCU looking
    and feeling like a large bank.  Now some members may WANT a large bank. 
    They will choose DCU since we should always be better than a large
    bank.  But others joined a CREDIT UNION and expect DCU to look and feel
    like a credit union.  That means we must compare ourselves to credit
    unions.  After all, isn't that what we are?
    

    
	RE: .73
    
>    For me, commercial banks are a valid comparison since I cannot meet the
>    membership requirements of various CUs.  

    	Keith, where do you live?  Most only require residence.  I could
    join Leominster Credit Union (branch 1/4 mile from my house) even
    though I live in Holden.
    

    I guessed you missed the '?' at the end of that.  In case you have
    forgotten, '?' at the end of a sentence indicates a question, not a
    statement.  If the answer to my question is 'Yes', it would explain
    some of the relationship-banking decisions.
    
    Phil, as a board member you have access to Financial information,
    including (if I read the meeting minutes correctly), monthly updates. 
    Do you have an answer to your question?  Or perhaps, tell us where you
    think all this money is going.  From what I've seen of the financials,
    the profits don't seem to be going anywhere.  They seem to be just
    piling up.
    
    One answer I'm surprised I haven't seen yet is "Employee bonuses".

RE: Note 739.78 by PATE::MACNEAL

>    Subsidizing non-relationship members?

More than likely increasing the salaries of DCU management...

	- mark

    Please define/list "basic services" (i.e. the services that fees should
    not be levied on, no matter what).