The stories we tell ourselves frame how we view the world, our place in it and how we respond to it. I call this internal viewpoint our myths, our prisms that interpret the world. The myths we create for ourselves have a profound impact on our ability to recognize and respond to change. The prism through which we see the world is formed for each of us, not surprisingly, during our formative years. For example, the children of the depression in the 30’s were adults in the boom years of the 50’s but they never took prosperity for granted and made decisions based on that view. The children of the depression could never have been the free spenders of the 80’s and 90’s.

The myths of credit unions developed in the formative years of credit unions. Credit unions were a movement then, not an industry. Members were drawn to credit unions because credit unions met the financial needs of members who were underserved and overcharged by the banks. Credit unions had better rates and intimate, customized service levels. Member ownership and self-government gave members a sense of empowerment and independence from the factory owners and bankers who otherwise ruled their worlds. The “goodness” of credit unions was self-evident and did not have to be marketed. From those myths we tell ourselves that only credit unions really care about the members and know how to serve them. Only we know what is best for our members. These myths comfort credit unions with a false sense of security that the natural order of things will always contain credit unions and people will know through their DNA about the “goodness” of credit unions.

These myths will kill us. If credit unions are so obviously better than banks, why do we not grow market share? Why are we losing the battle for the youth market? Why do our members also use banks and other financial providers? It is time we see credit unions not through our traditional prism but through the prism the world sees us.

Myth 1: Credit union’s fees for services are lower than the competition and at greater service levels. Does anyone really believe this anymore? In today’s world, members can choose financial service providers that have scale and market power to deliver financial services at fees much more favorable than credit unions can offer and at greater convenience, such as ING Direct and Lending Tree.

Myth 2: Credit unions go out of their way to give people a hand when they need it. There is no doubt that credit unions do this and I hope they continue to do this. Having said this, credit unions cannot stay in business by having a portfolio of “character” loans. In today’s world, credit unions must use objective safe and sound underwriting criteria or they will go out of business.

Myth 3: Credit unions are better because they member owned. Sounds good but what is the tangible benefit? Dividend returns are a powerful means to drive home the membership difference. At DFCU Financial Credit Union in Michigan, a patronage dividend of 50 basis points is paid on loan and deposit balances. The more a member uses the Credit Union, the more value the member perceives and receives. This is a game changer. In the four years that the program has been in place in a state where the population is declining, membership has grown 5% and the average deposit balance per member has grown over 23%. If you give members a tangible benefit for doing business with you over your competition, they will come…and bring their money.

Myth 4: Only credit union people know how to best serve their members. This is paternalistic nonsense. Members want to be empowered to interact with the credit union on their terms. The world outside of credit union is full of very innovative and effective people. There are credit unions that are open to new ideas and innovation. They are open to finding the best service solution whether that is delivered by their employees or in collaboration with CUSOs and third party service providers. The credit unions that use an open sourced business model to deliver best of breed services to their members will be the surviving credit unions.

Myth 5: It is insulting and manipulative to sell to members and credit unions are above that. There is a reason that a large portion of the media and the public is ignorant about credit unions and credit union growth is stuck in a rut. Credit unions need to sell themselves to be heard in the very competitive financial marketplace. The world sees credit unions as just another box of cereal on the supermarket shelf. Why would the consumer select the credit union cereal over the bank cereal? If a credit union is proud of its product offerings, promote and sell them. Find the competitive advantages for your credit union and promote them aggressively.

The mission of credit unions is a noble one. People helping people. But we will not survive as an industry unless we see credit unions as a business, a business that needs to use all the tools of business to survive. We will survive if we embrace our structure and provide best of breed services wherever those services can be sourced and if we provide tangible member benefits. It is not enough to provide great service and benefits, we need to effectively communicate the credit union difference and use proven sales techniques in order to be heard by our members and potential members. It is time to shed the myths that are holding us back and embrace the world as it is not as a nostalgic fiction. Members will be better served and credit unions will survive to serve them.