Loans and deposits are two cornerstones for a thriving credit union, but there’s more behind the success of the cooperative movement.
Things like trying out new marketing and branding strategies, rethinking the supplier-selection process, and even just investing wisely are areas of real opportunity to improve operations and the bottom line.
Credit unions share their best practices with CreditUnions.com all year. Here, Callahan’s staff writers share their selections for a handful of lesser-known pieces that are worth revisiting. ContentMiddleAd
Erik Payne, Associate Editor
How Yelp Can Help
Financial Partners Federal Credit Union ($1.3B, Downey, CA) encourages feedback on its Yelp pages to move up the search results ladder. It responds quickly to all reviews and advises other credit unions to do so, too.
Why You Care: Review sites are a major marketing channel, and unaddressed negative reviews confirm the perceived misdeeds and deprives the credit union of an opportunity to shine.
Blank Checks Are Better Than Middle Men
In 2016, Maryland-based Johns Hopkins Federal Credit Union ($431.5M, Baltimore, MD) started offering a blank check pre-approval program for auto loans as an alternative to an indirect program. To date, the credit union has issued approximately 737 blank checks totaling nearly $18 million. The average check amount is approximately $24,000.
Why You Care: For credit unions with limited fields of membership, the unlimited reach of indirect lending can be less than appealing. Auto draft pre-approvals can shift the power back to the credit union, and put money back in members’ pockets.
Check out the blogs on CreditUnions.com for Callahan commentary, more industry insights, emerging perspectivces, and more.
How 4 Credit Unions Tie Faith To Finances
There are more than 200 primarily religious- and faith-based credit unions in the United States, all of which serve the financial needs of their membership. But the relationship doesn’t stop with money. These credit unions have the ability and willingness to meet the spiritual needs of members, too.
Why You Care: The U.S. credit union movement was born out of a sense of shared community, whether based on occupation, association, or geography. These bonds still hold tight and can be the basis for what sets a credit union apart from competitors.
Friday Night Naming Rights
In June 2016, Cy-Fair Federal Credit Union ($238.0M, Houston, TX) signed a 10-year, $1.5 million naming rights agreement with the Cypress Fairbanks Independent School District to sponsor an 11,000-seat high school football stadium. That’s right: a high school football stadium. This is Texas.
Why You Care: Although many credit unions have secured naming-rights partnerships, quantifying a return on the investment can prove challenging. Cy-Fair says its deal has paid off after one year and shares why.
Rebuilding Community One Mortgage At A Time
A Wisconsin-based loan consortium of 11 banks and credit unions aims to transform its city’s downtown and keep college students in state by offering low-cost loans and scholarship money to local borrowers.
Why You Care: Like many American towns, La Crosse, WI is an aging city in need of an economic and structural facelift. Strategies like this show how credit unions can work with local non-profits for community benefit.
Marc Rapport, Senior Writer
High-Risk Lending Reaps Rewards
Azalea City Credit Union ($27.5M, Mobile, AL) and Southern Chautauqua Federal Credit Union ($79.8M, Lakewood, NY) don’t share much geography, but they lend from the same playbook. Both work extensively with the types of borrowers who often turn to pay-here lots or payday lenders; they both charge higher-than-market rates for loans; and they both end up with more bad loans than most credit unions their size.
Why You Care:
These two credit unions are a template for how to lend, and collect, in ways that benefit the community, the credit union, and most of all, the member who needs them most.
No Need For An RFP
Desert Financial Credit Union ($4.3B, Phoenix, AZ) no longer uses formal Requests for Proposals in its vendor selection process. Instead, it opts for meaningful conversations rather than mountains of paperwork.
Why You Care: RFPs can consume hundreds of pages and countless hours when a simple, strategic conversation or two might fill the bill.
A Better Way To Do Member Data?
A data lake at OneAZ Credit Union ($2.0B, Phoenix, AZ) provides a single, comprehensive view of member relationships. The credit union expects the approach to power a $2.5 million boost in net income per year and bump in member growth rates of approximately 10% to 15% a year.
Why You Care:
This innovative approach to integrating software and consumer data is bringing into reach the long-promised benefits of a 360-degree view of the member.
A Strategy To Think Creatively About Efficiency
The Imagination Lab at TwinStar Credit Union ($1.3B, Olympia, WA) empowers a rotating group of 10 employees to identify pain points and propose solutions. The lab has helped TwinStar consider more than two dozen process improvements and product proposals in the past four years.
Why You Care: Motivated staffers with a zeal for pragmatic innovation are great resources for resolving pain points. Find these staffers within your own institution.
2 Ways An Indiana Credit Union Builds Revenue
Purdue Federal Credit Union ($1.1B, West Lafayette, IN) uses rate swaps and hedging to dampen interest rate risk, generate revenue, and boost ROA. These strategies are considered vanilla in trading circles, but they are not for amateurs.
Why You Care: Strategies like this help credit unions generate extra income in novel places. What’s more, managers can build the bottom line while managing risk in a market facing roil by rising rates.