Top-Level Takeaways

• To engage its select employee group, Publix Employees FCU’s marketing team serves as an extension of member experience, employing a relationships-based approach.
• Two key outcomes from this approach include the creation of the credit union’s Financially Fresh financial wellness program and a low-interest relocation loan program.

When George Jenkins opened his first grocery store in 1930, he stocked more than shelves — he stocked opportunity. That vision extended beyond aisles and into accounts when he helped establish Publix Employees Federal Credit Union ($1.5B, Lakeland, FL) in 1957. According to the credit union’s website, Jenkins and other leaders believed employees deserved better loan and savings options. That mission — and the credit union’s singular focus on its select employee group — is still important to today.

Six years ago, leaders at PEFCU realized they wanted to reconnect with the iconic supermarket’s roots. To do this, they enlisted the help of Shannon Patten, now the credit union’s chief marketing officer. Patten had spent more than two decades as a Publix associate, first as a cashier and then in subsequent leadership roles in communications. According to Patten, the move was a big step but not one she regrets.

“It’s been a fun and rewarding journey,” Patten says. “The shift that surprised me most wasn’t the industry. It was the size of the organization. Going from a company with more than 250,000 employees to one with fewer than 300 was a big change.”

Patten’s early priorities included building brand consistency and ensuring the organization understood its target audience, the Publix select employee group. That groundwork helped PEFCU’s marketing department widen its scope, which today includes digital strategy, internal and external communications, financial education, and business relationships.

“What I love most about this role is how purpose-driven it is,” Patten says. “Everything we do is centered on improving the financial lives of our members, and that makes the work both meaningful and motivating.”

Great Strategy Starts From Within

PEFCU’s marketing team comprises three functions: operations, integrated marketing, and business development. Each plays an essential role in the credit union’s overall strategic vision. Business development insights feed integrated marketing efforts while operations ensures tight, member-focused execution.

One of the more unconventional, and strategic, choices the credit union has made is to place business relationship specialists with marketing rather than retail. According to Patten, the logic is simple: marketing is where relationships are nurtured, expanded, and sustained. That’s especially important for a credit union that serves a single select employee group.

“These roles are outward-facing, connection-driven, and very much in line with marketing’s core strengths,” the marketing chief says. “Marketing isn’t just about promoting products, it’s about delivering meaningful, consistent experiences. We see this team as an extension of the branch experience.”

Like most marketing teams, Patten’s department relies on traditional KPIs and platform metrics, such as engagement rates, conversions, and campaign ROI. These give a clear view of performance that allows the team to adjust in real time. However, Patten says story-based wins are just as important.

“We use data to inform strategy,” she says. But we never let it replace the human connection behind the numbers.”

Reconnecting With Roots

When Jeremiah Kossen took the helm as PEFCU’s CEO three years ago, he challenged the credit union to re-anchor itself in the cooperative’s founding mission of providing “exceptional, convenient, and innovative financial solutions” throughout members’ lifetimes.

“This wasn’t about a flashy campaign or a one-time push,” Patten says. “It was about doing the work, rebuilding relationships, earning trust, showing up consistently, and delivering on what we promise.”

To do this, Patten’s team engages with associates to ask what they need and how the credit union can support them. The team treats every interaction with its select employee group as a chance to show employees the credit union has their backs.

“It’s about pride in our legacy and making sure every Publix associate, whether they’ve been around for decades or just started, sees PEFCU as a real, valuable partner,” Patten says.

In addition to building stronger trust, the one-on-one connection has helped PEFCU develop better products and encourage stronger SEG engagement.

Publix already offers generous employee benefits, but financial wellness also plays a major role in overall associate wellbeing. To help Publix associates make healthier financial decisions, PEFCU rolled out Financially Fresh, a free, simple program designed to meet associates where they are. It’s approachable, accessible, and relevant to employees’ real-life scenarios.

The credit union also created a relocation loan to meet the specific needs of Publix associates on the move. The loan helps associates who are transferred or take new roles that require them to pick up stakes, giving eligible employees affordable access to extra cash when they need it most.

“Whether it’s for moving expenses, deposits, or simply getting settled in a new space, this low-rate loan helps bridge the gap without creating financial strain,” Patten says. “It’s our way of saying, ‘We’ve got your back.’”

No Slowing Down

The team at PEFCU has had a busy year, and there’s always more to do.

“We just came off four grand openings,” Patten says. “Assisting with the design and decor of these new locations was a lot of fun. That’s something I am excited about that the marketing team just finished.”

Now, the focus shifts from grand openings to ongoing growth — in brand, in relationship, in products, and in the way PEFCU shows up for its members.

“Success is when we’re a little better each time,” Patten says.

After all, credit unions aren’t just in the money business; they’re in the business of helping people. This makes a relationship-based approach to marketing a fitting way to drive member engagement and loyalty, especially for institutions with legacy SEGs.

Don’t Stop Here. Publix Employees FCU turns everyday moments into lasting financial impact. Through on-site support and a vibrant wellness program, the credit union is building trust, offering guidance, and forging financial confidence one associate at a time. Hear Shannon Patten, chief experience officer at PEFCU, outline how the credit union is deepening its relationship with Publix associates. Watch now.

The post Smart Marketing Speaks To A Select Employee Group appeared first on CreditUnions.com.

Top-Level Takeaways

• Serving employees of a nationwide organization is one way to offer customized financial solutions on a grand scale.
• Collaborating with employers and organizations to enhance the member experience and focus on distinct member needs helps deepen relationships within niche fields.

As the financial landscape evolves, many credit unions face a pivotal decision: maintain a closed field of membership —  limited to a specific group like employees of a company or members in an organization — or adopt a community charter and open their doors to serve a broader population within a larger geographic area. Preserve the tight-knit, member-centric culture that has long defined credit unions? Or embrace growth opportunities to meet the diverse needs of entire communities?

The choice, however, isn’t so diametric.

In fact, there is a third path that blends the intimacy of limited fields of membership with the reach of community charters. A TIP (trade, industry, or profession) charter allows credit unions to serve a highly specific group of members across the country. Select employee groups (SEG) that operate throughout the United States offer a similar opportunity.

Firefighters First Federal Credit Union ($2.2B, Pasadena, CA), Justice Federal Credit Union ($1.0B, Chantilly, VA), and Publix Employees Federal Credit Union ($1.5B, Lakeland, FL) are three institutions that boast a national reach with narrow fields of membership. Despite the outsize pressure on credit unions to expand membership parameters to remain competitive, these three are doubling down on their respective common bonds — and they have insights on how other credit unions can do the same.

1. Serve All Members At All Levels

Publix is one of the 10 largest supermarket chains in the country by volume — it’s also the largest employee-owned company in the United States. Publix Employees FCU was founded in 1957 to help Publix associates achieve their financial goals. Serving employees in eight states across 10 distribution centers and 10 manufacturing facilities, PEFCU’s membership is a diverse mix of retail, corporate, and industrial operations associates along with their families and retirees.

“We serve all Publix associates regardless of where they work or live,” says Shannon Patten, senior vice president and chief marketing and communications officer for PEFCU. “Our role is to listen to their needs, create solutions to help them thrive, and provide financial tools to make their lives easier.”

Since PEFCU was founded, the cooperative has remained committed to that mission. It’s also mirrored some of Publix’ positive attributes, like calling its own employees “associates.” Patten herself has served as either a Publix or PEFCU associate for 30 years and is a long-term credit union member.

“Staying true to our goals and core mission is the foundation for everything we do,” she says.

2. Understand The Needs Of YOUR Members … Not The Members Next Door

One of the benefits of serving a narrow membership segment is that it allows cooperatives to dig deep into the distinct needs, challenges, and goals of their members.

“Firefighters don’t have ordinary jobs,” says Liz Rose, vice president of marketing for Firefighters First. “We build trust by speaking the language of firefighters and tailoring our solutions.”

One such solution is the credit union’s fire station loan, which offers financing for items not provided by the department. This can include exercise equipment, outdoor grills, recliners, and more — items that make the down time spent at the station more relaxing … or more productive.

Justice FCU likewise offers products that demonstrate it has a deep understanding of what its members want and need.

“One of the factors that makes Justice’s strategy of serving across state lines effective is that we have a clear and consistent focus on our target market,” says Mark Robnett, president and CEO of Justice FCU.

The credit union offers low-interest loans for law enforcement personnel and other DOJ and DHS employees facing financial hardship while performing their duties; the loan even allows borrowers to defer payments during active-duty deployments or emergencies. The credit union also offers professional training and equipment loans to ease the financial burden of career progression.

Beyond these one-off solutions, Justice FCU believes true financial wellness changes lives. To that end, it offers online educational resources — such as articles (like this one about building financial resiliency), webinars, financial literacy tests, and financial counseling — as well as nationwide workshops and an Annual Officer Safety and Wellness Symposium. Justice offers these services through the lens that financial stress only serves to compound the occupational stress inherent in a law enforcement career. Just as mental and physical wellness are essential for on-the-job success, so, too, is financial wellness.

And at PEFCU, an unconventional relocation loan helps members move across the chain’s eight-state footprint to pay for various moving costs or other expenses related to settling into their new home.

3. Work With Employers, Not Against Them

PEFCU couldn’t serve its members effectively without a strong partnership with the Publix corporation.

The grocer understands how important it is for associates to have access to banking accounts with better rates and lower fees and is testing new associate onboarding concepts designed to raise awareness about the benefits of credit union membership. Publix managers also share talking points provided by the credit union and include credit union marketing materials in the Publix onboarding kit.

“Financially healthy employees are more satisfied employees,” Patten says.

Beyond onboarding, the duo collaborate on communications, including poster displays, articles in internal company publications, and the opportunity for PEFCU representatives to attend Publix meetings. This comprehensive approach between the two organizations ensures all associates understand what’s available through their credit union. Patten credits this open dialogue, creative thinking, and teamwork for the success in tailoring PEFCU’s products and services.

“We’re collaborating with our sponsor now more than probably ever before,” Patten says. “Long-term, our goal is to be recognized as not only a valuable resource for new and existing associates but also an asset to our sponsor. We want to continue to be Publix’ partner throughout its growth journey.”

4. Be Strategic About Expansion

Although Justice FCU was founded in 1935 to serve Department of Justice employees, today the cooperative serves those who work in justice, law enforcement, and public safety communities across the nation. A merger in 2018 with Guardian First FCU expanded the credit union’s reach in Texas while a merger in 2024 with Law Enforcement & Technology FCU expanded its footprint in Florida.

“The merger supports our strategic plans to grow our membership through opportunistic M&A activity and continued organic growth,” Robnett said in a July press release. “Merging with LE&T FCU serves as a catalyst for future expansion to enhance our service to the justice and law enforcement community across the nation.”

In addition to expanding its reach through merger opportunities, the credit union also extends membership via select associations and to immediate family members who are U.S. citizens or permanent residents, including spouses, children, siblings, parents, grandparents, grandchildren, stepchildren, stepsiblings, stepparents, and adopted family as well as anyone living in the same residence under a single economic unit.

To effectively serve members, the credit union must think beyond the walls of the DOJ building — that’s why it has locations across eight states and the District of Columbia.

“We’re headquartered in Chantilly, Virginia, but we have branches across various cities, including Los Angeles, Miami, Atlanta, Chicago, New York City, Houston, Dallas-Ft. Worth, and more,” Robnett says.

5. Engage Members As Advocates

According to Rose at Firefighters First, members of the firefighting community frequently relocate to different neighborhoods, cities, and even states. That mobility drove the credit union to expand its footprint nationally. It also prompted the credit union to consider how to turn roving members into raving advocates.

It offers a comprehensive suite of personal products — including an easy-to-use cashback reward program for its credit card — as well as business products and planning resources to help members “do more” with their membership through investments, insurance, estate planning, and tax services.

The credit union also has created an advocate committee composed of members passionate about the credit union’s mission and eager to contribute to its strategic direction.

“They provide invaluable feedback on new products, services, and initiatives, ensuring our offerings remain relevant and responsive to the needs of our SEG,” Rose says.

At Justice FCU, it pays to belong. The credit union’s referral program pays $25 to members as well as $25 to eligible family members, friends, or colleagues. It offers the same incentive for those younger than 18 who open a young savers account — which requires no minimum account balance and charges no monthly service fees. Members can make referrals online via digital banking or in person.

“Word-of-mouth marketing, including referrals and testimonials, can be a powerful way to generate awareness and credibility in a new market,” Robnett says.

6. Mission Matters … But So Do Local Needs

According to Firefighters First, it is important to stay true to mission while adapting to local needs.

“There’s a delicate balance between maintaining a consistent brand and being responsive to regional differences,” Rose says. “We’ve found success by deeply understanding the universal needs of our members while also recognizing and addressing the nuances that come with serving them in different states.”

According to Justice FCU, even when serving a national market, it’s important to support local causes.

“Identifying and aligning with the specific needs and values of your target audience is a great way to introduce your credit union in a new market and build trust,” Robnett says.

Justice FCU has partnerships with national and regional associations and organizations, including the FBI National Academy Associates, the Concerns of Police Survivors, the National Sheriffs’ Association, and the Fraternal Order of Police. These relationships help the cooperative build credibility, visibility, and trust among potential and existing members.

The credit union also offers complimentary membership to Concerns of Police Survivors (C.O.P.S.) — an organization that supports survivors and co-workers affected by line-of-duty death — and gives back to the organization through purchases made with its official C.O.P.S. rewards credit card.

7. Consistent Communication Is Key

In recent years, PEFCU has reinforced its internal communications to create clearer alignment in its messaging. The credit union is here to serve Publix associates and their families — and that message begins on day one with an address by PEFCU’s CEO during the associate orientation process.

“Everyone is working to make PEFCU the preferred financial institution for Publix associates and their families,” Patten says. “We’re all focused on the same thing and understand the privilege of supporting a company like Publix.”

According to the senior leader, this singular focus drives PEFCU to uncover new ways to positively impact members’ lives.

For example, PEFCU’s Financially Fresh wellness program includes online learning as well as in-person workshops that give attendees the tools and knowledge they need to cultivate healthier finances. As members complete courses about budgeting, saving, investing, credit management, and more, they can earn incentives such as discounts on auto loans.

The credit union then encourages members to share their credit union experiences to help PEFCU celebrate the difference it’s making in the lives of its members and stay connected with the people it’s serving. It carries such messages about mission and benefits designed for Publix associates through external marketing materials from brochures to social posts to billboards.

“By constantly talking about our purpose, we’re creating a sense of pride and honoring our legacy,” Patten says. “Our aim is to show how our service is truly enhancing the financial wellbeing of our members.”

The post 7 Ways To Gain A Wider Reach With A Narrow Field Of Membership appeared first on CreditUnions.com.

CREDIT UNION INDUSTRY BY CHARTER TYPE
FOR U.S. CREDIT UNIONS
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Such flexibility has proven essential to the survival of the industry. Yet even institutions that serve narrowly defined communities have found ways to increase their accessibility and expand their rosters while staying true to their core base.

Today, regulatory scrutiny combined with member loyalty is pushing credit unions to reconsider the value of select employee groups and multiple common bonds. As credit unions look to the future, strategies that blend the best of different models and incorporate underserved communities — true to the roots of the movement — will be crucial to navigating economic challenges and shifts in consumer behavior.

Strategic Insights

• Single common bond fields of membership comprise a small number of total credit unions. For example, by number, military credit unions comprise 0.2% of the industry, education 1.9%, and associations 3.5%. However, many of the nation’s largest credit unions by asset size fall into those categories. Navy Federal Credit Union ($178.0B, Vienna, VA), State Employees’ Credit Union ($56.5B, Raleigh, NC), and SchoolsFirst Federal Credit Union ($30.9B, Tustin, CA) all offer specialized financial services tailored to the distinct needs of the members they serve, contributing to a loyal membership base.
• Community charters comprised one-fifth — 20.9% — of the industry. The digitization of products and services has allowed these institutions to expand beyond their physical communities and meet their members wherever they are. The challenge they face is in striking a balance between local relevance and wider reach.
• In response to regulatory changes in the 1990s, many credit unions moved away from multiple common bond charters based on occupation or association toward community charters. That trend, however, has started to shift, possibly because multiple common bond charters present an easier avenue for expansion and allow credit unions to serve an infinite number of membership groups. As of the second quarter of 2024, multiple common bond charters made up slightly more than one-quarter — 26.3% — of the industry.
• The “other” category comprises a full 38.8% of the industry. That refers to mostly state-chartered credit unions. They don’t report their field of membership to the NCUA, so it is difficult to categorize their data by what kind of field of membership they might be serving.

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The Illinois-based cooperative has built the bulk of its business around scaling to meet the needs of some of America’s most formidable companies, including Target, GEICO, UnitedHealth Group, Cardinal Health, and HCA Healthcare. The credit union serves nearly 350,000 members, and its top six company relationships alone translate to 1.2 million employees eligible for membership.

“Relationships are our secret sauce,” says president and CEO Mike Valentine, who has led the cooperative for nearly 30 years. “Relationships we built with people we knew in the ’80s and ’90s who went off and ran other companies. They had been a member of our credit union, they liked what the credit union was, and said, ‘Can you do this for my company?’ It’s kind of a fairy tale story.”

To be sure, BCU has faced the same challenges as other credit unions: the post-pandemic shift to remote work, the mortgage bust, inflation, and interest rate volatility. But the credit union continues to add company partners, and its seven community branches have collectively grown to $1 billion in assets. A newly launched CUSO focused on financial wellbeing has brought in 1,300 new members so far this year.

“We have the trifecta of charters,” says Jill Sammons, senior vice president of marketing, wellbeing, and wealth advisory. “We have our company partners, we have our community charter, and we have our new associational charter.”

Sales-Driven Culture, Strategic M&As

Founded in 1981 as Baxter Credit Union, BCU began by building deposits and eventually making loans. In 1984, founding CEO Rex Johnson hired a young Valentine — then a branch manager at Household Finance in Waukegan — to manage loan collections and two salespeople.

“Rex’s vision was to create a great lending culture and be really good at lending and really good at sales,” Valentine says. “At that time, sales was not a good word, but it was selling that we were doing.”

After 10 years, Johnson left the credit union and took Valentine with him to form the consultancy Lending Solutions. Valentine passed up a chance to be CEO by leaving, but six months later, he was invited back to compete for the job against three other candidates. Valentine quips that he was selected probably “because it’s the devil you know.” When he took the helm in 1994, Baxter Credit Union had approximately $225 million in assets and one large company partner, Baxter International.

“Our big thing in the late ’90s was to say, ‘how do we get to $1 billion? What does that look like?’” the CEO says. “One of the first things we did was open an office in Crystal Lake, IL, and said, ‘let’s try to be in the community.’”

Also in the 1990s, Caremark International, the forerunner of pharmacy sales giant CVS Caremark, was spun off from Baxter International as a publicly traded company. Leveraging existing relationships, BCU began offering financial services to Caremark employees. In the 2000s, BCU added even more large SEGs from the medical field, including CardinalHealth and Boston Scientific.

The credit union achieved a major milestone in 2011, when Target Credit Union, a $30 million-asset credit union based in nearby Minneapolis, MN, extended a request for proposal (RFP) looking for a buyer with the scale to expand services to some 400,000 employees working at nearly 2,000 stores, distribution centers, and corporate offices spread across all 50 states.

Target Corporation was also committed to supporting the physical, mental, and financial wellbeing of its employees, and BCU’s well-established financial wellness program — already integrated into many other client wellness programs — was a major bonus. BCU won the bid to acquire Target Credit Union and helped it grow to $1 billion in assets during the next decade while operating as a division of BCU.

Acquiring a credit union in the retail sector marked the first time BCU stepped outside the health care field, but it opened opportunities for new relationships with insurance and financial services firms.

“That was a pivotal moment for BCU and our board,” Valentine says. “We always justified our expansion because we went with many companies that had a relationship with Baxter. We were in a whole new relationship with a company, but we won on the merits of who we are, what we are, and what we promised to do.”

Leveraging Well-Known Brands

BCU’s next big opportunity came in 2017 with UnitedHealth Group, one of the world’s largest health insurers, with more than 300,000 employees in the United States. Headquartered in Minneapolis, UnitedHealth Group’s leadership had already heard how their colleagues at Target were benefitting from the merger with BCU — particularly through financial wellbeing offerings — and they wanted to learn more. BCU pitched a plan to the insurer and ultimately won an RFP to be its employee credit union.

Then came the 2020 acquisition of $146 million-asset GEICO Federal Credit Union. Like Target, GEICO wanted to expand nationwide, and the two parties completed the deal during the height of the pandemic, even closing the transaction virtually.

Two years later, HCA Healthcare, which operates 184 hospitals in the United States and United Kingdom, also signed a contract with BCU to extend financial services to more than 200,000 employees. Not surprisingly, HCA’s longstanding relationship with Baxter International once again helped BCU get its foot in the door.

Importantly, BCU allows these credit unions to retain their original names on website, signage, correspondence, and all other external indicators, incorporating an endorsed brand strategy that includes “A division of BCU” beneath each logo. That started when Target insisted on keeping its name — contrary to the rebranding that is usually inevitable in the wake of an acquisition — and become a major point of differentiation for BCU in negotiations with future large accounts.

“There’s a lot of brand value, as you can imagine, that comes with the Target name,” Valentine says.

Scaling To Meet Demand

Offering services for and recruiting new members from a SEG can take years of discussion and relationship building, with Valentine typically involved at the CEO level while team members work with HR, pay and benefits, finance, and other departments to communicate the credit union’s financial and wellbeing value to employees.

“For instance, we rolled out UnitedHealth Group in 2017,” says Dave Blum, the executive vice president responsible for corporate relationships, business development, branches, digital banking, and marketing. “They did not have a credit union, so we started from ground zero. But we had conversations with them for two years before we rolled them out.”

The launch at UnitedHealth Group was so successful that 17,000 members joined in the first three months.

The market, social, and workplace changes that have taken place since the Great Recession also influence SEG relationships. For example, in a post-COVID world, large corporations are starting to provide comprehensive employee benefits that include ways to improve physical, mental, and financial wellbeing. Blum says BCU looks for partners who rally around those principles.

“That’s what success looks like — if they’re committed to financial wellbeing for their employees,” says Blum, a self-described “recovering banker” who joined BCU 10 years ago.

As the credit union’s SEG base diversified, so did the financial needs of employees across these companies, from front-line associates and warehouse workers to medical professionals and C-level executives. BCU has found that while paycheck sizes differ widely among those groups, the need for sound money-management support and valuable financial products does not.

BCU divides its services to members across three major categories — known internally as Corporate America, Middle America, and Working America — with each segment classified with average credit scores, household incomes, key product offerings, and more. BCU maintains a large portfolio of loans for auto, personal, home, students, and more, plus multiple credit card products ranging from a credit-builder card to cash and travel rewards cards.

“Before we do anything with company partners, we listen,” Blum says. “We try to understand what the need is. We’ve learned a lot over the past 40 years, and we’ve increased our offerings to make sure we have relevant products for every single segment of our company partners’ employees.”

Last year, the credit union increased its support for members who lived paycheck to paycheck. That started by significantly reducing non-sufficient funds and overdraft protection fees and creating Life, Money. You., a CUSO focused on financial wellbeing. The latter effort builds upon a wellness program available to members for years and now available to non-members, as well, by visiting the CUSO’s website or downloading a separate mobile app.

BCU has trained and certified more than 130 financial counsellors across the organization, but in-person seminars and one-on-one counselling are hard to scale to a national level, Sammons says. The new CUSO is investing in technology with the ultimate goal of providing tools to leverage transactional intelligence to help users make better budgeting and spending decisions and ultimately change behaviors.

“That was the impetus for the CUSO — for us to keep a focus on this area and not let financial wellbeing get drowned out in the day-to-day minutia of the rest of the operations of the credit union,” Sammons says. “We wanted to give it its dedicated investment and resources.”

Changes Starting At The Top

Another ingredient in BCU’s “special sauce” for large deals is the credit union’s board of directors. In recent years, as BCU brought on large accounts, C-level executives from those companies have joined BCU’s 11-member board.

Today, only two Baxter International reps sit on the board: Christine Fleming, assistant treasurer, and former Baxter CIO Paul Martin, who serves as vice chairman. Other board members hail from SEG partners and the wider community.

Since 2017, the board has updated its governance policies, established term limits for members, and focused on increasing diversity. Four women now serve on the board, and members represent a range of disciplines, including IT, cybersecurity, HR, legal, risk, and accounting.

“Our board has done an amazing job reinventing itself over the past six years,” says Valentine, adding that a more diverse cohort there has helped BCU talk to new companies and evolve its culture with a greater focus on DEI.

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Navigating The Future

BCU set an ambitious goal of growing membership by 10% this year despite facing a variety of economic headwinds. The credit union operates 42 branches in company partner locations across the United States and in Puerto Rico. Those have historically been a major resource for enrolling new members, but the shift to remote work during the pandemic changed that.

“Pre-pandemic, when we had a branch location at a company partner site, we would probably get up to 50% penetration at that site,” Blum says. “If we didn’t have a branch, it dropped down to 10% or 15% penetration. With the hybrid workforce, there’s less traffic.”

To counter that trend, BCU is exploring ways to offer consultative services and increase financial wellbeing through cashless branches that can be run by a single employee and virtual relationship managers for the 65% of members who don’t work at a location with a branch. Meanwhile, BCU branch managers are reaching out to employees through webinars, direct mail, and employer-sponsored events.

“Our company partners are having the same challenges of how to get engagement at the company level,” Blum says. “We’re a trusted partner, so they are allowing us to use different channels post-pandemic.”

The credit union is using any communication channel its partners allow but also has been investing heavily in digital banking. Last year, the credit union updated its platform with a full line of services that rival those of Bank of America and Chase. Eighty-six percent of members use digital banking.

“We are embracing that digital experience that our members are looking for,” Blum says. “If they want to come into our branch, if they want to call us through the call center, or if they want to go to our app, we want to make sure every experience they have is what they expect at BCU.”

BCU tracks member experience with Net Promotor Score surveys of both members and employees. Member NPS scores have risen from 70.43 in 2011 to 79.16 in 2022, with individual branches scoring as high as an 85.

All 850 employees have gone through a 90-minute exercise to understand the member journey and how BCU can build member relationships, serve as a guide on that journey, and help members through life’s major milestones.

Earlier this year, BCU received the 2023 Gallup Exceptional Workplace Award, which recognizes the most engaged workplace cultures in the world based on a wide range of criteria. As part of its workplace efforts, BCU is focusing on diversity, equity, and inclusion through a DEI council, culture training, and a course for the entire enterprise on the power of leading inclusively.

“If you have happy employees and engaged employees, that equals happy members and engaged members,” says Lisa Baron, executive vice president and chief human resources officer. “We’ve put a lot of time and effort into developing our staff, making sure we have great benefits for them, and that they enjoy their work and their workplace.”

Valentine credits front-line employees — or financial first responders, as they’re known internally — for building relationships with members.

“It starts with employees and the right attitude,” he says. “We hire for attitude versus skill. You can teach skills, but it’s hard to teach the desire to help people, to serve.”

Like the rest of the financial services industry, BCU is navigating the current economy of high inflation and 22-year-record-high interest rates. The credit union’s mortgage business fell sharply when the Fed began raising interest rates in 2022. Delinquencies on credit cards and indirect loans are creeping up while share growth contracted by 1% in June 2023 as inflation ate away at member savings.

Despite those challenges, Valentine reminds cooperative leaders that, unlike the banks that failed earlier this year, credit unions aren’t governed by stock prices or investors. As a result, BCU can sustain losses and still serve members across middle America when the economy is down.

“We have strong capital, we feel we’re doing the right things, but we’re trying to position ourselves for the recovery,” Valentine says. “It’s been a really good, reflective time for us to say, ‘How are we doing? What are we doing? What have we said ‘no’ to? Are we investing in the right things?’ Two years ago, we could invest in a lot of different things. Now, we’ve got to be laser-focused, so we’ve got to be good at picking the bets.”

This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about BCU or dive into a decade of archives. Contact Callahan to learn about gaining access today.

The post BCU Builds National Reach One Relationship At A Time appeared first on CreditUnions.com.

Consumer spending is leading the U.S. economy, buoyed by continued strength in the labor market. The Federal Reserve has continued its tightening campaign but is now slowing the pace of interest rate increases. That is welcome news for many credit unions that are focused on managing liquidity and interest rate risk — both current priorities due to the Fed’s actions during the past 18 months.

Credit union loan originations were down 31% in the first half of 2023 versus the same period one year ago. On the balance sheet, loan and share growth rates were slower than they were a year ago. The Fed is achieving the outcomes it was looking for when it began raising rates in 2022 and has slowed the economy to get inflation in line with its 2% target.

Despite the headwinds caused by higher interest rates, there are some positives for credit unions. More than 5.1 million consumers joined a credit union during the past 12 months, and savers are enjoying the highest dividend rates in more than a decade. Total revenue at credit unions was up 33% versus the first half of 2022 thanks to a jump in interest income from loans and investments. The net interest margin was the highest it’s been since 2019. At 79 basis points, return on assets was lower than the 86 basis points posted one year ago, but the net worth ratio was up 48 basis points to 10.9% due to slower balance sheet growth. And although delinquency and charge-off rates moved higher, they are coming off historic lows and remained lower than pre-COVID levels.

As credit unions head into planning and budgeting season, uncertainty about how 2024 will play out is at the forefront. Although questions about the direction of the economy are relevant for near-term plans, credit unions’ cooperative structure allows them to put more weight on the long-term. Credit unions have successfully navigated numerous economic cycles. In most cases, the more challenging the times, the greater the opportunity for credit unions to differentiate their approach from that of for-profit competitors.

With credit unions’ ability to take a long-term view, an uncertain environment presents a good opportunity for every cooperative to recenter and refocus its work. A credit union’s understanding of the distinct role it serves in the market is essential to defining its value and differentiating its market position. Planning sessions allow the time for management and boards to discuss these critical issues. If a credit union already has clarity on this, an affirming conversation reminds everyone why their work matters. If there is uncertainty around some of the key questions, it allows the group to talk through these questions.

Although many approaches can guide these discussions, Callahan raises the following three questions when facilitating strategic planning sessions.

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1.How Do We Define Our Market?

A credit union’s field of membership makes this an easy discussion topic on one level. Leaders can answer this question by listing select employee groups; trade, industry, or professional groups; or geographic boundaries included in an organization’s field of membership.

But those responses are only the general definition of a market. A real discussion needs to define the institution’s primary target market. That generally means demographic or sociographic profiles, but there are other factors at play, as well. Is it low-income communities? Middle class? Affluent? Are there neighborhoods that are areas of focus? Are there personas that can describe the target member(s)?

Whatever the answer, a credit union must define its member service strategy around this target market. What are its greatest needs? What does that imply for the credit union’s product set? What does it mean for how it most effectively reaches and serves its target market?

Gaining clarity on this question is key to strategic planning, and often the most difficult part of the process. Credit unions want to positively impact as many people as they can, but they cannot effectively serve everyone. A target market focuses an organization’s efforts on where it has the best insights into market needs. It is not intended to exclude market segments, but it recognizes the institution has finite resources and needs to prioritize how it uses those resources.

The good news is a credit union can often identify its target market by looking at the profile of its current members. So, start by asking, “What are the primary segments that comprise our membership today?”

“Credit unions want to positively impact as many people as they can, but they cannot effectively serve everyone. A target market focuses an organization’s efforts on where it has the best insights into market needs.”

2. What Is Our Value Proposition?

The answer to this question is tied to the target market discussion. A strong understanding of the credit union’s target market supports a discussion about the market’s greatest needs. Once a credit union understands its target market and its target market’s greatest needs, it can focus its efforts on delivering value that resonates with that market.

This step also brings to light trade-offs. For example, if a credit union focuses on a high-touch service strategy, delivering the lowest rates and fees might be a challenge given the costs associated with a high level of service. Organizations focused on serving an affluent membership might find it difficult to operate with a wide net interest margin. Those members can shop for attractive loan and deposit rates, so the credit union must be very competitive with its pricing.

Understanding trade-offs is another way of recognizing the credit union cannot be all things to all people. Although there are levels of service and pricing a credit union must meet to be a competitive option for members and consumers, a primary value proposition will result in some aspects of the business not being top-level.

3. What Investments Do We Need To Make?

Whatever the value proposition, credit unions can’t deliver on it without the right investments in people and resources. It is likely the credit union already has capabilities that support the value proposition based on its success to date. Given today’s competitive environment though, credit unions must make ongoing investments to stay ahead of — or even match — the competition.

People and technology are typically the primary areas of investment. Where and when to make investments in these areas are the key decisions. When planning for the next three years, there could be certain milestones or benchmarks a credit union is looking to reach during that time. Working backward from those can help inform the timing and scale of the necessary investments.

Members Provide Certainty

Despite the uncertain economy, there is one constant for credit unions — their members. Credit unions have sustained their success for more than 100 years because, in every environment, they have determined the best choice they can make is to listen to their members. Credit unions serve their members best when they understand those members and can meet their needs better than the competition. When members recognize this, they reciprocate by sticking with their credit union.

Ed Callahan once said, “Follow the member!” During times of uncertainty, it is important for credit union leadership to follow Ed’s guidance and maintain their focus on what they know best.

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The post 3 Key Questions For Strategic Planning appeared first on CreditUnions.com.

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School Branches Earn High Grades For This Ohio Cooperative

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Summit Credit Union Focuses On Women

The Wisconsin-based institution sets itself apart by focusing on the needs of women, helping them gain financial independence, and, most recently, helping people take steps to close the gender pay gap.

Wescom Gains International Reach With A New UCLA Partnership

A relationship with the university’s Dashew Center will help the California credit union reach incoming international students, some of whom have already joined the cooperative.

Supporting The Military Is More Than A Job At AmeriCU

The New York credit union addresses financial readiness for military members via basic budgeting guidance as well as more in-depth financial planning for soldiers heading down the wrong path.

The post CreditUnions.com 2022: Best Of Marketing appeared first on CreditUnions.com.

Top-Level Takeaways

• AmeriCU assists soldiers with resumes and other job seeking skills.
• Four years ago, AmeriCU launched a 90-day internship program for military members re-entering civilian life. To date, two veterans have taken full-time positions with the credit union.

According to the U.S. Department of Veterans Affairs, nearly 200,000 service members transition from the military back to their civilian communities annually. To aid transitioning soldiers locally and recruit for its own open positions, AmeriCU ($2.6B, Rome, NY) created a 90-day internship program to give soldiers a sample of what a career in banking might look like.

Recruitment Challenges And Soldier Service

The genesis of AmeriCU’s internship program was simple. According to Alissa Sykes Tulloch, executive vice president and chief operating officer, and Tina Thornton, assistant vice president of financial services, the credit union is growing and continuously seeking new talent but is faced with the same challenges many employers are with respect to recruitment.

AmeriCU has strong roots in the military and is dedicated to supporting the military community. The cooperative was a long-time participant in Onward to Opportunity, a program with Syracuse University that prepares soldiers to transition from the military to civilian world. This program aligns with the credit union’s mission to give back to the communities it serves and found the program to be a perfect opportunity to partner together.

“We were already helping transitioning soldiers with resumes and mock interviews,” Thornton says. “An internship program gave us an opportunity to not only give on-the-job career experience to soldiers leaving the military but also to recruit them into full-time positions and transition them into the local community.”

Now, AmeriCU works closely with the Army Career Alumni Program (ACAP) at Fort Drum to publicize the credit union’s 90-day internship program for transitioning soldiers. ACAP is a formal part of the transition process, providing briefings and tools to assist with civilian life during pre-separation training.

The credit union gives those soldiers who participate in the internship the background they need for a successful career transition.

“Although there is a higher success rate of converting college interns to continued employment at the end of the program, we are happy to give the military community the experience they need to be successful, regardless of where they land,” Tulloch says.

Start With The Basics, Then Customize

AmeriCU kicks off the internship with basic onboarding. After learning about the credit union’s background and leadership, each intern goes through a standardized teller services training. Next, they rotate through different departments.

“No matter which department they’ll be supporting, learning those basic teller skills is vital,” Thornton says.

There is also a fast track for soldiers who already have a strong financial background. When soldiers have an interest in a specific area, the credit union does its best to pair them with that department.

For example, AmeriCU’s most recent intern was interested in lending, so he spent time with several experienced lenders during his three-month program. The internship is paid, and the credit union compensates transitioning soldiers the same as any other entry-level employee.

“The purpose is to give them an overall look at what a financial institution is,” Thornton says. “Some of our interns don’t know the depth of what we do and think we just cash checks.”

AmeriCU addresses financial readiness for military members via basic budgeting guidance as well as more in-depth financial planning for soldiers heading down the wrong path. Read more in “Supporting The Military Is More Than A Job At AmeriCU.”

To date, two military interns transitioned into full-time employees. One stayed with AmeriCU for approximately one year before taking a finance job within the Department of Defense. The other moved back home after a year and took a position at another credit union.

Regardless of whether they stay with AmeriCU, the credit union views keeping a former soldier in the industry as a success.

“Being in the military takes physical fitness but also requires other traits like discipline, confidence, leadership skills, teamwork, and intellect,” Thornton says. “That makes it easy to bring soldiers into the financial world.”

Achieving Goals, Measuring Impact

Credit unions were built on the belief of people helping people and AmeriCU is committed to supporting the local community, the heart of the credit union mission. With the internship program, however, the cooperative believes both parties are benefiting whether the relationship is short or long-term.

Although the internship program on its own does not generate a positive ROA from a purely financial perspective, it is an investment in the military community that AmeriCU serves. For example, the credit union is testing the viability of allowing military spouses to continue as employees after moving on to other posts. So far, a hybrid virtual assistant and a call center representative are successfully working for AmeriCU from their new Virginia and Tennessee homes.

Beginning in December, AmeriCU will deploy its first virtual branch, which contains a full set of branch staff positions including tellers, member service reps, and a branch manager. All roles are able to serve members from anywhere by virtual appointment.

“This is another opportunity for those who relocate, especially transitioning soldiers and military spouses, to continue working with us,” Tulloch says.

Looking Ahead And Advice For Others

As for the future of the program, Tulloch says it’s bright.

“We’re going to expand it,” the EP says. “We want to ensure all the strategic decisions we make fit into the military lifestyle. The new virtual branch is a great example of how we’re trying to find ways to deepen relationships as military members and employees deploy elsewhere.”

Thornton advises other credit unions to look for partners with missions to serve a niche membership within the wider community.

“Our partnerships with Syracuse University and others create a greater benefit for those we serve,” she says. “They help us get in front of soldiers when they need us.”

The post Soldiers Sample A Credit Union Career At AmeriCU appeared first on CreditUnions.com.

Over the past 20 years, credit unions have generally moved away from multiple common bond charters (the traditional Select Employee Group (SEG) charter) to community charters. The trend has now reversed. Credit unions are increasingly reclaiming their old SEG charter because the federal multiple common bond charter is generally simply better.

Most credit union executives know the federal multiple common bond charter allows credit unions to serve an infinite number of employers and associations. Some are aware that under a multiple common bond charter a credit union can have associational groups that can serve as a path to membership for prospective members willing to join the association to make themselves eligible.

Few, however, are aware that they can also serve communities. Even fewer, probably only our clients, know that a SEG charter can counterintuitively serve larger communities than those available under a federal community charter and many state charters.

Despite benefitting from a dual chartering system, most state charters are going to struggle to offer what the federal multiple common bond charter provides for the foreseeable future. After all, federal chartered credit unions only answer to one regulator and have broader tax exemptions and federal pre-emption. All of which generally means they pay lower taxes, aren’t subject to certain state regulations that conflict with federal regulations and have an easier time engaging in multistate branching and FOMs.

Historically, the perception has been that state charters have benefited from having more liberal field of membership rules. However, that has changed since the NCUA’s most recent modernization efforts due to the increase to maximum allowable population of a rural district from 250,000 to 1,000,000 residents.

Underserved areas, underserved rural districts in particular, are what make the federal multiple common bond charter so attractive. The definition of an underserved area is complex but the key facts are:

• Underserved areas are community affinities meaning that anyone who lives, works, worships, attends school, or businesses within them are eligible to join the credit union.
• Currently, underserved areas are only available to multiple common bond charters.
• Multiple common bond-chartered credit unions can have an infinite number of underserved areas in their FOM.

Additionally, an area of any geographic size qualifies as a rural district if:

• The total population of the proposed district does not exceed 1,000,000;
• More than 50% of the proposed district’s population resides in census blocks or other geographic units designated as rural by either the Consumer Financial Protection Bureau or the United States Census Bureau, OR the district has a population density of 100 persons or fewer per square mile; and
• The boundaries of the well-defined rural district do not exceed the outer boundaries of the states immediately contiguous to the state in which the credit union maintains its headquarters (i.e., not to exceed the outer perimeter of the layer of states immediately surrounding the headquarters’ state).

The fact that multiple common bond credit unions can have an infinite number of underserved areas in their field of membership and that rural districts can consist of any unit within the state a credit union is headquartered in, and its surrounding states, allows for a lot of flexibility in defining the communities a credit union serves.

While it would take someone thousands, if not millions, of hours, it is possible to identify ways to draw multiple qualifying underserved rural districts that work together to cover entire statistical areas or even states (CUCollaborate has developed software that does this, but it still takes a day or two). Take, for example, the case of Gulf Coast Federal Credit Union (TX), previously chartered to serve the following community of 422,561 residents:

Persons who live, worship, work (or regularly conduct business in), or attend school in Nueces, San Patricio, or Jim Wells Counties, Texas.

The most they could serve through a community charter defined by their statistical area was the following community of 526,866 residents:

Persons who live, worship, work (or regularly conduct business in), or attend school in a portion of the Corpus Christi-Kingsville-Alice, TX Combined Statistical Area consisting of Aransas, Duval, Kenedy, Kleberg, Jim Wells, Nueces, and San Patricio Counties, Texas.

The credit union could have expanded to a rural district that would have covered their entire statistical area but ultimately be capped at 1,000,000. However, they instead converted to a federal multiple common bond charter and added several groups and the following three underserved areas:

By adding the three underserved areas, Gulf Coast Federal Credit Union was able to serve a community of 2,379,247 residents, consisting of their entire statistical area and many more counties and census tracts.

Credit unions should be aware of this strategy as it offers the most flexibility when it comes to organic and inorganic growth. Gulf Coast Federal Credit Union can now partner with any indirect acquisition partner nationally, expand into new communities organically, and has a path to voluntarily merge with any credit union in the country.

For a free charter and field of membership expansion evaluation, please request a demo below.

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CUCollaborate specializes in field of membership expansion, among other things, and has helped numerous credit unions through the process with a 100% success record. On average, credit unions that work with CUCollaborate add underserved areas with more than double the number of new potential members.

The post The Case for the Federal Multiple Common Bond Charter (Over Community Charters and Most State Charters) appeared first on CreditUnions.com.

Top-Level Takeaways

• Nusenda began making microloans in 2010. In 2018, it formalized a program and started working with community partners to identify borrowers.

• The small entrepreneurs are posting a solid payback record while creating jobs and opportunity in their communities.

For more than a decade, Nusenda Credit Union ($3.4B, Albuquerque, NM) has provided financing to small entrepreneurs and created a community impact that extends well beyond the cooperative’s bottom line.

“We’ve funded restaurants and food services, childcare, jewelry and other artisan production, a barbershop, and much more,” says Amy Nigrelli, Nusenda’s chief marketing officer.

It All Started With A SEG

Nusenda kicked off its microlending effort in 2010 with a five-year loan pilot program created to support La Montaita Co-op, New Mexico’s largest community-owned natural foods market and one of Nusenda’s select employee groups.

According to Nigrelli, many growers in La Montaita’s network didn’t meet traditional loan collateral or credit requirements and couldn’t access the funding to increase production and grow their businesses. The microloan pilot program was Nusenda’s solution to this growing problem and it worked. In fact, the pilot was so successful, the credit union started working with other community organizations to expand the model and reach additional underserved borrowers.

“We have some fantastic organizations in New Mexico that serve underserved and marginalized groups,” Nigrelli says. ‘Their daily focus is supporting and building mutual trust with their constituents. We partner with such organizations to identify and qualify potential borrowers.

Nusenda dubbed its expanded program Co-op Capital and issued the first loans from it in 2018.

Character Fills The Credit Gap

Typical underwriting rules including credit scores create a gap that the Co-op Capital program is built to address.

“There are many people often women, people of color, Native Americans, and immigrant communities who have never had access to financial institutions,” Nigrelli says. “Co-op Capital provides a path to capital for borrowers in our community who would not traditionally have access. The microloans administered under this program use a character-based lending model, rather than the traditional five Cs of credit, to qualify a borrower.”

According to Nigrelli, the program initially relied on support from Program Related Investments (PRI) from the Kellogg Foundation, the Albuquerque Community Foundation, and the Dakota Foundation. Under that model, 70% of the loans were collateralized through PRI, 20% from the credit union, and 10% from the partner organization.

But that changed as Co-op Capital expanded and Nusenda demonstrated its ability to serve the micro market.

In 2020, Nusenda began collateralizing 90% of the loans with the remaining 10% from the partner organization, Nigrelli says.

Currently the program relies on a revolving collateral fund that contains $1 million in PRI money and $3 million from the credit union.

The Multiplier Effect

Since 2010, Nusenda has made 630 microloans totaling $1.8 million. According to the credit union, those funds have helped those small businesses create 324 jobs.

The Co-op Capital program alone, which formally launched in 2018, has accounted for 218 loans that have averaged $5,050 each and have helped establish 41 new businesses and 129 new jobs. Of those 218 loans, Nusenda has charged-off only two.

The credit union has made loans through 15 different partners representing a diverse group of tribal organizations, local economic development organizations, and more. Borrowers are located across New Mexico, primarily in Bernalillo, Sandoval, Santa Fe, and Taos counties, as well as the Navajo Nation, and their pursuits range from traditional businesses to startups like a coding school and a commercial test kitchen.

Most recently, the credit union partnered with Albuquerque’s International District Economic Development (IDED) to support small businesses and entrepreneurs in the capital city’s southeast neighborhoods, which the credit union and IDED describe as one of the city’s most culturally diverse and underserved areas.

Assistance often extends beyond loans, too. For example, the IDED partnership includes funding, office space, workshops, and training to help support the budding businesses.

But that’s not all.

“Access to capital even in small amounts has a multiplier effect,” Nigrelli says. “It helps the borrower on their personal journey and as an investment can help whole communities improve and thrive.”

The Broader Product Picture

Co-op Capital deepens the connections among the credit union, the programs it works with, and the communities they all serve.

“Nusenda is deeply involved in communities across the state,” Nigrelli says. “What’s special about our Co-op Capital program is that it fosters a deep understanding of the communities we serve and their needs especially traditionally marginalized groups. It’s powerful to see what we do come to life at a very human level.”

Nigrelli calls Co-op Capital an extension of the cooperatives efforts to ensure its products benefit the community and serve low-income members.

“We’re always looking for ways to help our members and support the communities in which they live,” she says.

Other examples of the credit union’s help include first-time homebuyer programs, checking accounts targeted to students and people working to fix their finances, and a debit card that allows members to round up purchase charges to pay down loans, save, or donate. Its efforts during the pandemic have included donating 4,200 masks and supporting first responders as well as neighbors-in-need with more than 15,000 meals from local restaurants and 1,500 boxes of Girl Scout cookies.

Community Connections. Lasting Impact.

According to Nigrelli, one of her goals when she joined Nusenda in December 2020 was to help expand microlending and connect more New Mexicans to safe, affordable banking.

“We’ve learned so much from our Co-op Capital work and the positive power of collaborating with community partners,” the CMO says. “I’m looking forward to even more.”

Although some borrowers have moved into more traditional banking products, the bottom line isn’t Nusenda’s ultimate goal.

“Nusenda is here to empower our members and the communities we serve,” Nigrelli says. “We have a responsibility to understand our field of membership and connect them to affordable, responsible, modern products and services they can trust. This program is a great example of how we can leverage our community connections and our people-first focus to do things together that make a great impact.”

The post Small Loans Make A Big Impact In New Mexico appeared first on CreditUnions.com.

• ISU Credit Union has sharply increased mortgage lending with the help of two loan programs aimed at educators, including one that has an unusual 12.5-year term.

• The credit union has added a third loan to help COVID-19 first responders afford new homes.

Ron Rippee, Lending Manager, Idaho State University Credit Union

The math is simple: 10 plus 15 divided by 2 equals 12.5. And that’s how Idaho State University Credit Union($262.2M, Pocatello, ID) came upwith its Velocity Home Loan.

It’s a 12.5-year, fixed-rate note that fits neatly between the 10-year note that made for a payment just out of reach for many members and the 15-year loan that was longer than some members wanted.

We live in a rural area, and many of our members prefer shorter-term loans, says lending manager Ron Rippee. Our mortgage staff was looking for an out-of-the-box product for them. We hoped this product would give them a payment theycould comfortably handle.

Velocity Home Loan is one of three home mortgage products created specifically for the credit union’s Idaho field of membership which comprises ISU students and alumni, along with many southeastern Idaho school districts and businesses.Another loan is aimed at thanking first responders to the pandemic crisis.

Forever Home. Half The Loan.

That’s a marketing motto for the Velocity Home Loan, which Rippee says has been more popular than the credit union expected.

We’ve closed 165 Velocity mortgages since May 2019, the lending manager says. That’s increased our portfolio by 26.1% in 13 months.

The Velocity name was a creation of marketing manager BJ Fillingame, and the terms are designed to make the credit union stand out in a marketplace where its major competitors are other credit unions.

1ST MORTGAGE GROWTH

FOR ISU Credit Union | DATA AS OF 03.31.20

Callahan & Associates | CreditUnions.com

ISU Credit Union’s first mortgage growth grew after the cooperative introduced its Educator Home Loan in late 2016. Growth surged dramatically after the credit union introduced the Velocity Mortgage in May 2019.

The loans have primarily been for refinancing, and the credit union keeps them in the portfolio. The interest rate is 0.125% below the published Freddie Mac rate for 15-year notes with a minimum cap of 2.75%.

Rippee says the credit union waives all fees except for the drive-by appraisal for refinances, and members pay normal fees for purchase loans. The credit union will approve loan-to-values up to 95%, and the property must be an owner-occupied, primaryresidence. No manufactured or modular houses, condos, or townhouses.

The Educator Home Loan

The Velocity Home Loan follows on the success of the Educator Home Loan, which Rippee says he created in October 2016 to offer an attractive refinance or purchase loan to the cooperative’s SEG while thanking them for their service.

The Educator Home Loan is a conventional loan for anyone who works at an educational institution and is based on Freddie Mac’s published rate. Waived fees include everything except the appraisal, which means approximately $1,500 in savings on a$100,000 loan, Rippee says. Plus, ISU Credit Union makes a $250 donation to the school program of the member’s choice after each closing.

The cooperative has closed 125 of the Educator Home Loans so far, growing its portfolio by 21.7% as a result, according to Rippee.

We’ve also donated $31,250 to various local school programs in our members’ names, the lending manager says. The Education Loan program has been a great success.

ISU Credit Union highlights loan terms and the donation component on its marketing collateral for the Educator Home Loan. To view a larger version, click here.

ISU Credit Union used member feedback to design a loan for educators. The Velocity Home Loan offers a 12.5-year term plus other enticements. To view a larger version, click here.

The credit union took out ad spots in the Boise Weekly to promote the 12.5-year Velocity Home Loan. To view a larger version, clickhere

A Home Loan For Heroes

The Hero Loan is our new product for 2020, Rippee says. With all that’s happening, we wanted to offer a program that would help us say thank you’ to those who serve our communities.

5 Loan Lessons For Serving Educators

Ron Rippee, lending manager at Idaho State University Credit Union, shared five best practices the credit union has discovered while creating and offering mortgage products targeted toward school-heavy SEGs.

• Know your market. This include trends, community needs, and the overall economic stability of your footprint.
• Know your membership. The more you know about who your members are, what their needs are, and their general financial situations, the better you can design mortgage products that directly meet those needs.
• Think outside the box. Everyone offers conventional mortgage loans. What separates your credit union from any other lender?
• Hire the right staff. Lenders must take ownership in their jobs and understand the importance of what they do and the importance of the membership. You can teach the technical part of mortgage lending; it’s harder toteach drive and pride.
• Work with marketing and executives. Marketing has a lot of say in how even great ideas are received. So, work together to be successful. An engaged executive team willing to step outside the box also is vital. The executiveteam at ISU Credit Union was involved in every aspect of the credit union’s new products. That support was imperative.

The Hero Loan goes up to 97% LTV for a purchase note and 95% for a refinance. It is open to anyone in law enforcement, fire departments, EMT personnel, paramedics, nurses, and active military.

This loan has a normal published rate, Rippee says. Once we close this loan, we gift back to the member one-half of their original loan origination fee to thank them for their service to our communities.

ISU Credit Union has closed four Hero Loans and has given back more than $5,000 to those members, Rippee says. And, it’s got many more of the loans in the pipeline.

Giving Back And Becoming A Player

Giving back to its communities and members through innovative loan products has helped ISU Credit Union gain ground in a market that, like many, has been ramped up by record-low rates. Rippee says his shop has grown its portfolio by 36.8% during the past13 months of record volume.

All these new loans coming in have made it a challenge to keep up, he says. In response, the cooperative has added mortgage loan officer and a processor, plus a document closer position.

Rippee himself is a certified underwriter and has taken on some of those duties, further helping loans move through the process more efficiently.

When I started at the credit union in 2014, our mortgage footprint was limited in our FOM, he says. But over the past six years, we’ve grown our footprint and have become a player in our mortgage market.

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The post There’s No Place Like Home With A 12.5-Year Loan appeared first on CreditUnions.com.