9 Rate-Setting Rules That Have Changed New Considerations for Managing Credit Union Pricing Decisions

Introduction

Pricing decisions are made in group settings. We encourage you to discuss this information among your entire rate-setting team. Simply click on the buttons above or links below to find the information you need.

Have you ever asked yourself?

• “Do we ever lose market share because of our pricing decisions?”
• “Would we be better off being less competitive on some products and more competitive on others?”
• “How do we remain competitive and control interest expense in a market with shrinking margins?”
• “How can we grow without hurting our CAMEL rating?”
• “What effect do our pricing decisions have on member loyalty?”
• “Are we changing rates when we should be?”
• “How do we differentiate our credit union?”

This Webpaper will…

• …teach you which former rate-setting rules are now obsolete,
• …calculate the potential costs of pricing mistakes,
• …provide your credit union’s Rate IQ score and recommendations,
• …share study results from a survey of nearly 1,000 credit unions, and
• …help you improve your pricing decisions.

Plus, you will hear best-practice advice from the leaders of five competitive and growing credit unions.

One rule of rate-setting will never change: At its core, rate-setting is the art of successfully navigating a course among the interests of three groups: members, owners and competitors. For credit unions members are the owners; however, the objectives of pricing decisions vary between the two groups, and short-term benefits must be weighed together with the longer term financial future of the cooperative.

Although the most basic premise of setting rates remains the same, credit unions now operate in a more competitive environment. The complexity of pricing decisions has changed dramatically, and it may be time to reconsider some “rules” that have outlived their usefulness.