MAUMEE, Ohio - Concern about members’ ability to cope with a declining economy has two Ohio credit unions taking financial counseling seriously enough to place counselors on-site.
Sun Federal FCU and Wright-Patt CU believe the move not only benefits members, but improves long-term relationships and drives growth.
Sun Federal here went in-house with financial counseling early this year to handle one-to-one coaching and run educational seminars. Interest in both has been high, explained Cathy Eldridge, Sun’s VP of organization development and learning.
“Our goal was to do 36 financial education seminars this year and we’ve completed 12 in the first two months,” she said. “I think we are going to blow past our success metric.”
Eldridge estimates that seminars and counseling sessions reached 150 members in the first 60 days. But that doesn’t include potential members, she points out.
“We also look at seminars as business development tools,” Eldridge said. “They are open to potential members as well.” Besides financial counseling being “core to a credit union’s mission,” Eldridge says Sun chose the approach because “we think it will benefit the volume and quality of our loans in the long term. Members come to us for loans and we are not always sure we can make them. But if they had a little help with budgeting and come back, they can buy that house or take out that car loan.”
Eldridge says an on-site counselor–called a coach to avoid members “thinking something is wrong with them”–does a better job than traditional call centers at providing education that sticks.
“It’s more lasting. Face-to-face interaction, the comfort level of knowing who you are talking to, personal follow-up, and the ability to build a relationship makes this best for members. It’s a very worthwhile investment for us.”
The cost for the counselor, who travels between the $296-million Sun’s Toledo and Philadelphia markets, is the same as a hiring a full-time staffer with benefits, Eldridge says. The CU contracts with GreenPath Debt Solutions out of Farmington Hills, Mich., which pays the counselor’s salary.
Another reason the credit union chose to contract rather than hire is GreenPath’s experience with financial counseling and the ability to start the program quickly.
“We considered bringing someone on last year when we introduced two new services–overdraft protection and a product to battle payday lending. We felt that if we introduced these products we should also provide counseling. And with the downturn in the economy, our credit scores declining, and more loan denials, we wanted to move. We didn’t want to get someone up to speed.”
Sun learned about the service through the $1.4-billion Wright-Patt CU, which brought a counselor from GreenPath on-site in January 2007.
“We are always ahead of the curve and we saw a need for this service five years ago,” explained Tracy Fors, Wright-Patt marketing division manager. The Fairborn-based CU first worked with Miami Valley Consumer Credit Counseling Services and switched to GreenPath last year because “their services are designed to meet the needs of CU members. In 2007 we served over 2,000 members through the program, and we offered 17 seminars and workshops. I think that speaks volumes.”
Wright-Patt also likes that GreenPath’s “main focus” is to counsel members in money management skills instead of setting up debt management programs.
“It reflects well on Wright-Patt to offer these services to our members,” Fors said. “Helping people through life is our mission. Determining an ROI on the direct benefits we are providing to our members with this service is hard. If we help 2,000-plus people every year, we are creating financially responsible members and producing long-term benefits for the credit union. Short term, we are building trust with our members when they may be facing vulnerable situations.”
Sun has a two-year contract with GreenPath and will evaluate the benefits in 2009. Wright-Patt is convinced of on-site counseling’s value. “The market conditions may be temporary, but our members’ best interests are always long-term,” Fors said. Both CUs take advantage of GreenPath’s call center to extend counseling hours. Luke Pelger, community relations and education specialist at GreenPath, says his company’s call center has been “talking to a lot of members that are having trouble paying down credit card debt due to high interest rates.”
No surprise, Pelger added that members are needing a great deal of help in the mortgage area, and are asking about credit reports. “Because credit reporting is affecting not only financing, but also job opportunities and insurance premiums, members want to learn how to improve their credit score.”
