Boomers are now staying put! As the poet Dylan Thomas wrote, “Do not go gentle into that good night.”

Older executives who were set to retire are putting it off because their nest eggs have been decimated by the plummeting stock market, which doesn’t bode well for the generations waiting in the wings.

But to stay in their jobs, CEOs need to get up-to-date with technology, which has become more important over the years because of the need to compete on economies of scale with larger financial institutions and the credit crisis.

In the face of the harsh reality concerning Credit Union Boomer employability and retirement possibilities, the feeling is that the best game plan to staying relevant in today’s credit union industry is to keep up with the youngsters.

Boomers need to recognize the reality for being indispensable in any work environment.  They must make their work as unique and useful as possible by bringing their best ideas to work. This is vital to staying ahead of the curve.

The dilemma of the Baby Boomer is that they are living with one foot in the old industrial job-for-life world while the other is in the changing-every-minute information age. They were complacent in a job market forged by the prior generation. They are finding now that complacency no longer works. The warning to Baby Boomer executives who are trying to understand their place in the new economy: if they do not change with the economy’s needs, they will not succeed, regardless of their skills.

AARP has recently released a study that says that nearly one in five Baby Boomers aged 55 to 64 planned to delay retirement because of the economic downturn and even though some credit union executives are saying ‘goodbye,’ for the most part, they are staying put.
This study tells us two things that impact credit unions.

1. Credit unions will need to increase their understanding of Generational differences in the workplace and provide training to HR departments and all levels of management.  It’s becoming increasing likely that if you are a 55 yr old manager with 30 years experience that you will report to a Gen X or Gen Y senior manager twenty years younger than you at some point. Generations have different values and work orientations that they bring to the workforce. To effectively manage a profitable operation, managers and employees need to understand these differences and the similarities.

2. Even if 20 percent of eligible Baby Boomers decide to stay in the workforce for a few years to ride out the economic downturn, the remaining 80 percent of Baby Boomers who elect to retire or seek nontraditional employment will cause a devastating chasm in the ability of employers to fill their critical jobs that require experience and advanced skills.

CU Employers: What Must You Do

Acknowledge that a multi-generational workforce is desirable and here to stay. Seek out professionals to help your management team understand generational differences and how you can leverage the experience and skills of your Baby Boomer generation workers.

Acknowledge that you must become a Boomer Friendly employer. Do this by realizing the bottom-line significance of retaining your best workers and being able to attract the best talent.

Embrace a culture and policies that are flexible to the needs of experienced workers who want to work at something satisfying and rewarding. The new workplace is diverse. It is multicultural and multigenerational and Baby Boomer executives can learn to adapt to and stay on the job because it’s part of who they are.

So don’t count boomers out just yet. They are here to stay until they say it’s time to retire.

I actually saw a commercial from my own credit union recently and even though it was a little weird…its star is a penguin hand puppet…. It’s good to see they are trying to get the word out.

But where is everyone else?

I mean, I get it that unlike large banks, credit unions make loans primarily using deposited funds from their members. And that the averaging loan growth this year has risen significantly due mostly to the shrinking ranks of housing finance based financial institutions.

I mean, credit unions loan growth for the first six months of 2008 was fueled by 90% of total loan growth coming from mortgage lending according to the NCUA…. which is pretty cool if you ask me!

In a press release ACUMA Chairman John Reed, President/CEO of Maine Savings FCU said, “Most credit unions have plenty of liquidity and have for years made prudent loans at very competitive rates and terms and we’re not about to stop now. The fallout from delinquent home loans and subprime lending has caused many banks to hold onto their cash and lend much more conservatively than they had been. More people are turning to credit unions for loans they might have gone to a bank for a year ago.”

So there’s that!

But no one knows about his mother lode of mortgage money to be had! I mean, I was talking to a realtor friend and she was moaning that not only is she not selling any homes, but when she does, her clients can’t find the money.

So I let her in on the biggest secret that shouldn’t be a secret. So now she’s telling her realtor friends and hopefully they’re telling their friends. On the average, more real estate agents are referring their clients to credit unions, since there is a mutual responsibility to take good care of the prospective homeowner.

But where’s the national press? Where are the commercials?

I live in a big city with about 20 different credit unions and I see maybe two commercials on TV. Granted I don’t watch television 24/7, but shouldn’t credit unions be shouting this news from the rooftops? Shouldn’t they have lines out the door—the good kind—- with people looking for home loans?

They most certainly should! Bob Dorsa, the CEO of ACUMA recently said,

“The message from America’s Credit Unions is the fact that most consumers have no idea that they may qualify to join a credit union, which still has the ability and willingness to make loans to its members. “

So let’s tell them!

The fact remains that Credit Unions did not participate in the subprime lending crisis, and will not receive any bail out funds from the federal government. For credit unions, it’s business as usual, just as they have done for decades. The challenge is not to provide funds for housing finance, it is to tell the credit union story and educate realtors and American homeowners about the value that America’s Credit Unions bring to this situation.

So let’s tell the Mr. and Ms prospective homeowners that they most likely are qualified to join a credit union AND if they have decent credit they hand obtain a mortgage.  Let’s tell everyone, come on, what are you waiting for?

But you can’t use a penguin sock-puppet, that idea is taken.

Washington’s largest credit union began offering members the state’s first “paperless” mortgage about a year ago and the program has been a remarkable success.

Last month Joe Brancucci, executive vice president and chief lending officer at $8.5 billion Boeing Employees Credit Union filled an ACUMA (American Credit Union Mortgage Association) audience in on details about how BECU pioneered an entirely paperless mortgage experience.

“Members electronically receive their closing documents as least 24 hours before closing. Escrow companies receive them as much as seven days in advance,” Brancucci said.  ”Our members sign their closing documents electronically, doing so with two signatures instead of the usual 15 to 20 required using the traditional process. In the end, they go home with their closing docs on a USB drive. This appeals to everyone involved in the process.”

Paperless mortgage lending is showing to be significantly less stressful for members on closing day and is more efficient for the credit union as well. No more 4-pound stack of papers that borrowers have to provide, receive and sign to qualify for a home loan: good-faith estimates, truth in lending statements, lead-paint disclosures, bank account statements and multiple years of tax returns.

In 2001 the paperless mortgages became possible after the federal government decided that electronic signatures are acceptable and legally binding for a variety of business transactions, including mortgages.

Brancucci said that since BECU began the process of introducing technology into the mortgage process, the cost to originate a loan has plummeted by as much as 62 basis points and BECU now processes 1,200 mortgage applications per month earning the Washington credit union a $1 billion portfolio, with practically no paper involved. The mortgage lending department employs 35 full-time staff, including five supporting positions.

“BECU isn’t entirely paperless,” Brancucci said. ” There are only a handful of the nation’s county recorders that will accept electronic files, but paper copies for county recorders are the only remnants of the old system.”

Anyone who has bought a home in the last decade knows that the process is stressful, considering the amount of negotiating, anticipation and paperwork that is involved. But closing a deal is much easier at BECU.

The efficiency of paperless mortgages and the elimination of the reams of paper that plague the process of financing the purchase of a new home is what sold Kelly and Jeff Maltin of Everett, WA to procure a mortgage at BECU on a three-bedroom townhouse.

“I was freaked about buying the house but when I heard we didn’t have to sign a million pieces of paper it made everything a lot less stressful,” said Kelly. ” I also loved that the whole process is environmentally friendly.”

Brancucci said that it’s not a question of ‘if’  other credit unions are going to make the transition to image-based lending, but a question of ‘when.’”

“It’s become clear that those who survive and thrive are going to be the credit unions that embrace efficiency,” he said. ” Embracing efficiency in the 21st century means moving toward a paperless business model– and doing so in the best possible manner.”

The folks at my CU genuinely care and don’t judge me by my dwindling savings account because they get it. The economy is in the tank and their members are hurting, but they know what they stand for.

In 1935, when credit unions were helping Americans through the Great Depression, the treasurer of a Midwestern Credit Union said that credit unions were “not for profit, not for charity, but for service,” and that philosophy holds true today.

A budget impasse in late June prompted California Gov. Arnold Schwarzenegger to threaten to cut state workers’ pay to the federal minimum of $6.55 per hour – not nearly enough to get by in the hi-rent Golden State. Around that time, though, a notice appeared on the door of my credit union, which serves state workers as a primary SEG. The notice offered help in the form of low-interest loans in case Schwarzenegger came through with his threat.  He didn’t, but how many state workers with accounts at banks had that peace of mind?

Up in Sacramento, The Golden 1 Credit Union the nation’s sixth-largest credit union with nearly $7 billion in assets, has offered short-term, no-interest loans to state workers for years, as long as the state legislature has argued over budgets. A California governor has only made good on his wage dropping threat once, which is a good thing, because the state employees nearly half a million people.
However, the legislature rarely agrees on a budget by the state’s June 30 deadline, which automatically stops paychecks for the 1,500 legislative employees. This not only includes the legislators themselves, but their congressional staff, and even the capitol building workers, like janitors and security guards. This year, The Golden 1 extended no-interest loans to 1,100 of those employees, resulting in a net loss of $52,000.

Wow, losing money to help people in trouble. What a concept. My credit union and The Golden 1 weren’t the only ones offering to help state workers; several credit unions throughout the state, and even a couple of banks had special deals.

Those programs sure made an impression on my friends who work for the state, offering them solace and reassurance that their credit union not only cared about them, but had a back-up plan in place.
Back-up plan… another interesting concept for a financial institution.

But that’s not the only way CU’s are tossing their members a life-raft.

Outreach programs aimed at people hurt by subprime mortgages have enabled nearly 500 homeowners across the state to refinance about $69 million in home loans.

The programs benefit homeowners who had struggled with the monthly payments on their adjustable rate loans. This came after critics said the federal government and big lenders had not done enough to help homeowners fight their way out of the mortgage mess.
Maybe Congress should call up some CU board members and ask them for some advice on the Wall Street debacle. It couldn’t hurt, and let’s be frank: credit unions are the only solid, liquid institutions these days.

Other credit unions are offering products specifically designed to combat payday loans, or cash advances, which burst onto the scene in the 1990s, even as the nation experienced record economic growth.

A typical payday lender provides immediate cash in return for a postdated check for the loan plus a fee, often with no background credit analysis. Sounds good to the average consumer— and especially good to desperate ones.

But you folks in credit unions know the bad news: that high-priced loan center, conveniently located in almost every strip-mall in America, often charges between $15 to $50 for every $90 borrowed. If you extend or “roll-over” the loan, you must pay the fees for each extension. This could force the Annual Percentage Rate (APR) up over 400%. Thirty bucks doesn’t sound like much to uneducated consumers, but when it’s taken from a $200 loan, that translates into an effective annual percentage rate of 390%.

Silver State Schools Credit Union in Las Vegas offers a payday lending alternative called CashNow Loan, which has a one-time annual fee (10% of the amount borrowed) and a $10 Annual Fee. The term can be extended up to 12 months.

Credit unions thrive when the economy is down. Many credit unions were chartered during the Great Depression or shortly thereafter; this new recession, depression, or whatever they’re calling it these days, presents an opportunity the industry probably won’t see for another 75 years (what a double-edged sword!). Credit unions don’t have the scramble to meet the needs of a credit- crunched America, because they’ve been doing it forever.

Keep doing what you’re doing, credit unions. Your good deeds, which is just business as usual in your world, are about to come back to you in the form of a major market share gain.

Specifically, average CEO salary plus bonus increased 8.59 percent, according to the 2007 CUES Executive Compensation Survey.

So what?  Based on performance, I say it’s well deserved.

The International Monetary Fund estimates that the financial turmoil set off by the collapse of the mortgage market could total nearly $1 trillion. Yet, CEOs of the firms most responsible for causing the crisis collected hundreds of millions of dollars in pay last year. Further reform is needed to protect companies and their investors, or the villagers are going to storm the castle.

Compare that scene to credit unions. Sure, we’ve seen some losses — industry attorney Joe Melchione called those responsible for credit unions liquidated in the past year “drunk behind the wheel”, and that’s a good description. A few of us got caught up in the lure of easy money and quick loan portfolio gains.

But only a few.

Credit union executives, by and large, refrained from get-rich-quick temptations, sticking with what they know: safe and strong, prudent and thrifty. Forget the debate of profit vs. non-profit, this is about performance. Credit unions approached the mortgage boom with restraint and wisdom, and now they, and their more than 87 million members, are glad they did.

Bravo! Credit union executives deserve that raise in my book.

NCUA Vice Chairman Rodney Hood agrees. He told NAFCU conference goers he thinks credit union executives deserve another zero on the end of their salaries. Before chuckling and rolling your eyes, consider $2 million wouldn’t put them on par with S&P 500 execs, who rake in an average of $14.2 million each.

Credit union executives aren’t running quaint mom and pop shops out of shoeboxes anymore. They’re running complex institutions and deserve to be compensated thusly, Hood said.

The CUES survey compares credit union compensation practices with data from four independent banking surveys. As usual, banking salaries are higher, especially when bonus pay is compared, with the exception of the under $250 million category, which is tough to compare apples to apples.

But the gap is shrinking. In this year’s survey, the median base salaries of CEOs at credit unions of $250 million or more in assets actually outpaced their banker peers; but, when bonus pay is factored in, bankers are more highly paid.

Likewise, in the $250 to $499 million range, credit union CEOs earned $225,000 in base plus bonus pay, compared to $240,600 for banking executives. That disparity is even higher in the $1 billion and up range: $420,056 compared to $570,600.

Here’s where the difference lies: CEOs of banks in the survey’s highest asset range receive 73.1 percent bonuses, as a percentage of their base pay, while credit union executives receive only 23.2 percent.

Clearly, credit unions understand the need to be more competitive when it comes to attracting and retaining talented management teams. And, CU leaders have their work cut out for them when it comes to achieving the necessary results in today’s tough marketplace.

Susan Mitchell of O’Rourke, Mitchell and Associates said recently that boards are experiencing ’sticker shock’ when it comes time to negotiate compensation for a new CEO. “It’s not that they aren’t willing, it’s just current tenure of retiring execs has naturally resulted in lower pay than what competitive market conditions require today,” she said.

Mitchell cautioned further that, “Resentment can happen when the retiring CEO learns of the new package. This happens when the retiring CEO is worried about their own lifestyle after retirement, or feels concern for the organization they have built. There also can be a sense of disappointment that their efforts were not recognized or rewarded.”

Could credit unions learn a thing or two from their banker brethren about bonus compensation, which is typically performance based? It would certainly help the cooperative defend compensation to inquiring members, as well as grumbling retired CEOs. And, your Gen X and younger leaders probably won’t blink an eye at the concept of performance based pay—just make sure you’re willing to make good if your new exec achieves or exceed goals.

Effective long-and short- term incentives are an effective means of retaining senior executives who are in their peak years of performance, allowing credit unions to “bridge top executives to retirement”.

“It’s a relatively new word and concept,” said Mark Elliott, founder and CEO of PowerStart Onboarding. “You’re not teaching them how to do the job, but research shows that new leaders, even those with years of experience, face many challenges that can slow or derail their progress. Those first few months on the job have a disproportionate impact on the new leader’s success or failure.”

Everyone knows how costly new hires are. Onboarding ensures new hires bond quickly and experience immediate success, providing a return on that investment right away.

“This is the best program,” said Doug Nahas of NASA FCU who was recently promoted as VP of branch operations and who completed the course in June. “The great content, the custom tools, the reinforced relationship with my boss are all great.  The reading is quick and easy.  I often read it twice or three times.  The course To-Dos are really valuable to approach my onboarding in a structured way.  Plus, it facilitates discussions with my boss that are substantive and focused on real work situations and things we need to accomplish. It was a great help to get us started on the right foot.”

As Nahas point out, rather than cramming hour after hour of mind-numbing information into the first week, Elliott provides a comprehensive process that offers tools, resources, advice and counsel to the newly placed leader. The process is delivered to senior executives as an online application, supported by expert executive coaching. “Truly, onboarding is a steal,” Elliott said. “If a board has paid a recruiter top dollar to find the right candidate, this is an insurance policy – risk management, if you will.”

Elliott identifies the first 90-100 days as the critical timeframe for a newly hired leader, when boards and staff develop key impressions about the new hire.

“Those first few months are when you can figure out if the new hire is a winner, someone to commit to, support and follow,” he said. “Or, a death spiral begins in which the board decides the new CEO was a mistake, and they should cut their losses before the credit union is impacted by low staff morale, missed opportunities and lost momentum.”

The bottom line for recent hires and their employers is that time and money are more valuable than ever, making this an important issue. Credit unions are more comprehensive organizations than they were in the past. Competition is growing, the economy is tough and members are demanding new products and services. Credit union boards are also experiencing turnover and new volunteers are ready to hire the next generation of credit union CEOs.

Elliott cites research from the Harvard Business School and points to one study that discovered new leaders were prone to make serious misjudgments, missteps and mistakes during that crucial 90-100 day onboarding period. In fact, more than half of new leaders were gone in 18 months-some much sooner.

“I’ve been an executive search consultant for 25 years and never had a failed executive,” Elliott said. “There shouldn’t be any stigma connected to having a career coach and going through the onboarding process. It’s lonely at the top and to succeed in this ever-changing world you need a sounding board and an expert to help you navigate the new waters.”

If you’re Judy McCartney, you hire a financial planner, relocate to a new city and purchase tickets to exotic destinations.

During her tenure, McCartney helped others grow and contribute to the credit union industry. She was a pioneer in her field, serving a Hispanic membership long before it was the ‘cool thing to do’; and, under her guidance, OCCU paid a monthly bonus to Spanish-speaking associates for a decade. Another accomplishment of McCartney’s was being a textbook editor for a finance course, used at a local college. She convinced the editors to replace the word “bank” with “financial institution.”

“I always played Monopoly when I was a kid and I was the banker, so I guess I was destined for a career in the credit union industry,” she said from her new home in Sedona, Arizona. “I’m very proud of my career and my accomplishments, but I’m retired now and I have a whole new life ahead of me.”

But like so much in life, McCartney said being able to retire is a numbers game.

“I saved, sure I did, but the prospect of retiring as a single woman was a little daunting,” she said. “It’s tough to honestly plan for it. You can either face it or try to pretend it’s no big deal. I decided to face it and I’m pretty happy I did.”

Two years ago, McCartney hired a financial planner to go over everything from investments to insurance while putting her retirement plan into motion.

“Things weren’t as bad as I thought,” McCartney said, laughing. “You worry about it all the way up to the day you say ‘goodbye,’ sure, but if you have a plan, it turns out it’s pretty easy.”

McCartney isn’t the only one retiring in 2008.  This year, the oldest of the 79 million Baby Boomers, born from 1946 to 1964, turn 62. Many of them are joining her and the reality is this: those who retire early will accept reduced Social Security benefits, and in doing so, risk coming up short of their financial needs.

Over time, taking benefits early could mean a smaller payout and bigger taxes on retirement savings, not to mention a heightened risk of outliving the money.

Analysts generally urge retirees to delay withdrawing money from their 401(k), IRA and other retirement savings accounts as long as possible. That way, the thinking goes, the tax-deferred investments can grow and compound.

“I took advantage of some of the plans my credit union offered, and over the years I sought advice from people who knew more about investing than I did,” she said. “Retirement is something to look forward to. I loved my job, but people keep asking me if I miss it. Honestly, I miss the people, but I love retirement.”

Since January, when she walked out of OCCU for the final time as an employee, McCartney has been busy traveling to Europe and Mexico, and mapping out her retirement.

“I call this the last third of my life,” she said. “And you can’t play golf everyday. You need a plan and it’s never too early to start preparing for the future. Or the end. Whatever you want to call it, I’m enjoying the heck out of it.”