How Southern Chautauqua FCU Builds Savings And Futures In Local Schools

High-interest savings programs, financial education, and in-school branches form the backbone of the western New York cooperative’s strategy.


Southern Chautauqua FCU
Data as of 03.31.17

HQ: Lakewood, NY
ASSETS: $78.5M
MEMBERS: 14,566
12-MO LOAN GROWTH: 18.1%
ROA: 0.34%

John Felton knew it was a good thing when his credit union’s youth savings program helped a girl get a new bike, but that wasn’t enough.

We changed her summer, but not her life, says the president/CEO at Southern Chautauqua Federal Credit Union ($78.5M, Lakewood, NY).

The youngster had saved $42 through a credit union program at school, her parents matched it, and they were off to the store for the big purchase, the girl told the credit union.

She was elated that summer of 2003, Felton says. But him? Not so much.

I try to be a big-picture guy, he says. I knew we could do better.

So SCFCU took a year off and, with the assistance of an NCUA grant, came back in 2005 with a more robust strategy that emphasizes long-term savings, financial education, and, now, in-school branches.

John Felton, President/CEO, Southern Chautauqua FCU

The Savings Plan

The credit union’s savings plan ? Kids’ Credit Union ? pays 10% interest to students who save up to $200 in second grade, $300 in third grade, and so on through high school. They can deposit as much as they want, however the aggressive dividend rates are only paid on the goal for each grade.

SCFCU stashes students’ cash in share certificates that mature and roll over each November. Stick with it, and the money doubles by the time they graduate.

So far two students have made it all the way through. One of them is Felton’s son, who is heading off to college this fall with a little more than $10,000 from the program.

Students who retrieve their cash early don’t lose principal, but they also don’t get the benefit of several years of above-market interest. Felton says there now is approximately $550,000 from that program on deposit from roughly 1,500 Kids’ Credit Union members.

We’ve focused our savings and financial education programs on getting a jump-start in life, not about going to college.

John Felton, President/CEO, Southern Chautauqua FCU

Financial Education

SCFCU serves Chautauqua County in western New York, a rural area considered low income by the Census Bureau that has a lot of $13-an-hour retail jobs and no mass transportation, according to Felton.

Kids’ Credit Union requires a working relationship between SCFCU and its area schools. A credit union staffer goes to the participating schools once a week to collect the deposits and once a month to present grade-appropriate financial education classes.

Rising ninth-grader Ellie Felton was in seventh grade when her dad’s credit union brought in $10,000 in small bills to show the kids how cash stacks up. Charlene Austin is at the head of the class as she leads a session on financial education in her role as Southern Chautauqua FCU’s director of financial education.

We’ve focused our savings and financial education programs on getting a jump-start in life, not about going to college, Felton says.

SCFCU educators get 500 hours or so every year with the county’s classrooms. One popular session involves taking $10,000 in bundled small bills, dumping them on a desk, and then peeling bills off one at a time to illustrate a lesson about savings happening one step at a time.

The kids go crazy when they see all that money, Felton says. Then we talk about how life is made up of a bunch of little goals, and that if you put them together in harmony, you can reach your big goals.

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In-School Credit Union

This spring, SCFCU opened its first in-school credit union at Southwestern High School in West Ellicott, NY.

Regular staff and student interns man the branch during the school day, and the credit union’s core processor provides employee profiles that allow the interns to make transactions without seeing sensitive information such as balances or Social Security numbers.

Adult credit union members can access any of the fully transactional branch’s services, whereas students gain access by grade level 10th-graders, for example, can get a checking account.

Debit cards are available to those who take a little coursework, Felton says. Those are test-based products.

Financial wellness is a Big Idea for 2017 at Callahan & Associates. Read how credit unions Turn Financial Wellness Talk Into Action to learn more.

The credit union plans to open its second in-school branch in the fall, at Jamestown High School in Jamestown, NY. SCFCU will operate that one with the same philosophy as its predecessor.

A lot of student branches run on paper, Felton says. Our goal is to provide the opportunity to learn real-life skills. Those are good jobs in this area. That’s another springboard we try to provide.

June 26, 2017

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