WEST PALM BEACH, Fla.–Implementing ideas that are proven to work–that’s what Credit Union Journal readers have told us they want.
That’s why Credit Union Journal created the Best Practices Awards, bringing you some of the best ideas being implemented at credit unions today.
And not just pie-in-the-sky, “wouldn’t-it-be-great-if we could” ideas, but ideas that have been test-driven by your peers with impressive, proven results.
And not just “we’re-happy-with-how-it-worked” results, but tangible, measurable results, such as giant ROI, big boosts to membership, huge increases in revenue and lots of time, money an effort saved.
How did we come up with them? We didn’t. We called for nominations, and this year we were bowled over by the largest outpouring of candidates in the history of our Best Practices Awards.
The editors of the Journal culled through all of those submissions and chose the Best Practices you will find below.
As always, we invite your feedback and suggestions to
Click on a link below to be taken directly to each profile.
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Red Rocks CU
Category: Home Equity Loans
By Michael Bartlett, Reporter
HIGHLANDS RANCH, Colo.–Many financial institutions offer interest rate discounts on loans, but Red Rocks Credit Union developed a program that keeps the credit union fresh in its members’ minds via an annual rebate check.
The $138-milion CU rebates 5% of home-equity interest paid at the end of every year to the member, which, depending on the loan balance and interest rate, can amount to several hundred dollars.
Red Rocks CU’s core-processing system, XP2, computes the rebate and pays the member on the last business day of the year, so the 1098 IRS reporting reflects the correct amount of interest paid. The credit union accrues this amount on a monthly basis so its December financial statement does not have to take the “hit.”
Steve VanSickler, senior vice president and chief lending officer for Red Rocks, said the credit union was looking for something to differentiate itself from other rebate efforts.
While some rebates give back a percentage of purchases, he said Red Rocks’ “Home Equity Interest-Paid Rebate Program” is completely different.
“It effectively gives them a lower rate, but when you have a relationship-based pricing rate, people forget,” he said. “They just think that’s the rate and forget it came from having multiple products with their credit union.”
The idea is not new–VanSickler said it was done 50 years ago–but Red Rocks used several Internet search engines and could not find any institution that presently was doing such a rebate.
The results have been excellent, VanSickler said. The rebate program was implemented April 1. In comparing the Second and Third Quarters of 2007 to the same period in 2006, Red Rocks CU has seen a 32.5% increase in standalone home equity product fundings, which he attributed to the program.
Response from members has been so positive, Red Rocks is in the process of implementing an interest-paid rebate program for all consumer loan products in 2008 to additionally differentiate itself in the marketplace and increase return to its borrowers, VanSickler said. The credit union needs every differentiator it can get, he added, as it is one of 29 financial institutions in this Denver suburb.
“We want to do it with overdraft lines of credit, auto loans, signature loans and other loans. We won’t do it with mortgage loans, because that gets into significant dollar amounts. Rebating mortgages is not practical for a credit union of our size. For home equity lending and consumer lending, though, it works very well. It definitely is a tool for marketing in a local area that differentiates from other institutions,” VanSickler said.
The only caution VanSickler offered to other credit unions interested in establishing a similar program is a technical one: he said the rebate works for Red Rocks because the credit union’s core processing system handles calculations electronically. If a credit union’s system involves manual processes, he warned, it would have to examine how much extra workload would be involved at the end of the year.
Other than that, he said: “There were no negatives other credit unions would need to avoid. Most credit unions do relationship-based pricing, usually around 50 BP.
“This 5% rebate ends up being about 43 basis points, but the credit union gets more mileage out of it without giving up the extra 7 basis points.”
Lockheed FCU
Category: Bill Pay
By Michael Bartlett, Reporter
BURBANK, Calif.–Lockheed Federal Credit Union faced a problem familiar to many CUs: members signed up for “free” online bill payment, but were not using the service.
The solution: a focused e-mail campaign designed to encourage members to take the next step, thereby saving Lockheed FCU the expense of paying for non-use.
Andrea Carpenter, the $2.5-billion CU’s senior vice president of marketing, told the Credit Union Journal the first wave of e-mails was sent to members in November 2006. Members were offered an incentive–a $15 retail store gift card–for making three online payments. Of the 507 inactive users targeted, 99, or 19.5%, responded by making an online payment.
A second e-mail in May of this year resulted in online payments from 179 of the 1,680 recipients, for an 11% activation rate. Carpenter said CheckFree has found the average activation rate for e-mail campaigns is 2% to 11%. “The whole thing was fairly simple,” Carpenter said. “We pay for folks who are signed up, and since we don’t pass on fees to members, as most institutions do these days, it adds up.”
Carpenter said each month a group of members sign up for bill pay with the best intentions, but then do not get around to registering their payees, much less making actual payments. “Over time, the population of inactive folks grows, so we thought it was a good idea to let them know they need to use it or lose it. When we say ‘lose it,’ they could re-enroll later, but we code it on the system so the credit union is not charged,” Carpenter said.
Stephanee Maxwell, Lockheed FCU’s marketing director said she was pleased with the results of both campaigns, and added the e-mail effort has become an ongoing project. “We receive a list of members each month who have not used the service within 60 days of signing up, and we send them an e-mail,” she explained. “We no longer offer the $15 gift card. We’ve already been paying for them to have the privilege of using the service, so why should we reward or incent them for not using it? Eleven percent is still good, and there is a lot of extra effort to go back through the system to confirm which members have made three payments and then send them a gift card.”
Added Carpenter: “We started out thinking we needed an enticement, a carrot, rather than a use-it-or-lose-it message. The first one was great, but adding the card added a cost. So we tried sending a message reminding them to use it. The 11% activation rate wasn’t as good as 19.5%, but it still was pretty respectable.”
According to Carpenter, bill pay is a tough service to grow materially. She said Lockheed FCU has seen incremental growth, especially by members who also use online banking. “But like a lot of credit unions, we’re still looking for answers.”
The credit union has encouraged its frontline staff to explain to members how to use the bill payment service. In addition, it sends members a monthly e-mail with educational tips. “To give it more urgency, we offer a prize each month,” Carpenter, said. “The e-mail points out the benefits of bill pay, including knowing a guaranteed payment date, rather than guessing when the Post Office is going to deliver the check.”
To qualify for prizes, members must make three payments. Carpenter said the requirement was designed to create a habit, or at least get members invested in the service. “Saying ‘sign me up’ is one thing, but setting up payees and registering a payment is a whole other activity,” she said.
Lockheed FCU brands the service as Web BillPay and uses PSCU Financial Services’ PayLynx online bill payment platform. To grow the bill pay subscriber base beyond its current total of 11,000 members, the CU is in the process of adding a “how to” video from PSCU Financial Services to its website and now uses the cooperative’s communications package to get subscribers to take the next step once they are enrolled.
Leslie Reistrup, director of e-services for St. Petersburg, Fla.-based PSCU FS, said Lockheed FCU has been an excellent partner in the effort to boost bill pay usage. “They look out for their members at all times, and they look for ways to increase usability of their products, which helps members in the end,” said Reistrup. “They have a dedicated team that is very experienced. They are passionate about e-commerce in general, especially products that will help their members in the long run.”
Central Keystone FCU
Category: Technology
By Joyce Moed, Reporter
SUNBURY, Penn.–Like many other credit union leaders, Kris Kauffman, CEO of Central Keystone Federal Credit Union, was forced each quarter to devote a significant amount of his time and energy to the 5300 Call Report for the NCUA.
Preparing the 5300 Call Report was always a tedious process, Kauffman said, as everything, including its expenses, loans and investments, had to be entered manually. In all, there are almost 600 line items included in the report and with all those details to locate, input, and double check, so it was very time-consuming.
Central Keystone FCU looked to its technology partner, IntegraSys, for support and found that it was developing a timesaving solution called the 5300 Call Report Assistant. When Kauffman learned of this solution designed to make the 5300 Call Report easier, he quickly volunteered to become one of the first to use the new solution.
Once he got the system set up, the solution was able to automatically gather almost everything he needed to complete the quarterly report–from general ledger to AlM to host data.
Each quarter, the 5300 Call Report Assistant saves Kauffman time by automatically pulling data from seven different sources including the $29-million CU’s core-processing system and other areas necessary to compile the report.
By leveraging the 5300 Call Report Assistant to streamline its quarterly report process, Central Keystone FCU has been able to devote more time to the business of serving its members. With its so many pieces and parts, the quarterly report used to take Kauffman a full two days to complete.
But today, Kauffman says he can usually complete the report “in less than half an hour.”
The 5300 Call Report Assistant performs cross-checks and balancing similar to those included in the NCUA 5300 Call Report software, and offers unlimited capacity to add notes for easy documentation. The solution interfaces offers convenient access to critical data including G/L account numbers, host share and loan types.
So now, Kauffman only inputs about 10 items manually each quarter, as opposed to all 584 items. By using the 5300 Call Report Assistant to automatically pull data from so many disparate sources and organize the information into a comprehensive, NCUA-compliant report, the credit union has reduced report preparation by more than 80%.
“I’m honored to be chosen for the Credit Union Journal’s Best Practice issue,” Kauffman said. “The 5300 Call Report Assistant is a great tool for streamlining accounting processes. It’s wonderful when technology can be applied in such a way that reduces a task that used to take days to requiring mere hours to complete. By implementing this automated report preparation solution, credit unions of all sizes can experience the same kind of tremendous time savings we have seen at Central Keystone Federal Credit Union.”
Community First CU
Category: Credit Cards
By Joyce Moed, Reporter
APPLETON, Wis.–Just one year after Community First Credit Union began promoting and actively managing its new credit card program, outstanding balances were up by 43%, as the CU achieved a 32% increase in purchases, and interest income gain of 23%.
From March 2006 to March 2007, the CU boosted credit balances from $9.91 million to $14.16 million, and saw purchases rise from $2.21 million to $2.92 million. By the end of May 2007, outstandings topped $16 million for the first time.
The $916-million credit union had been considering selling its credit portfolio when a consultant recommended they invest in it instead, and predicted it would be their highest yielding loan product, said Cathie Tierney, Community First’s CEO.
The credit union decided to take the advice and worked with AdvisorsPlus from PSCU Financial Services, in St. Petersburg, Fla.
“We have added an impressive 100,000 subscribers over the past 12 months due to product enhancements, innovative marketing tools, and our dedicated team of skilled advisers,” said David Serlo, president and CEO of PSCU Financial Services.
Community First Credit Union engaged in a comprehensive program that involved reorganizing its card offerings, planning and launching a series of promotions, developing employee incentives and continuously measuring results against pre-set goals.
The credit union reorganized its portfolio into Platinum Visa and MasterCard accounts. Members were notified by direct mail that they could be automatically enrolled in a “Great Rate” Platinum card that offered 8.99% interest or select a “Great Rewards” Platinum card with a higher interest rate that offered a rewards program. The credit union also employed risk-based lending to adjust interest rates to match a cardholder’s credit score.
Promotions included: credit-line increases, convenience checks, balance transfers, cash rebates and cash-back options and the ability to use rewards points to buy down services fees. Credit card rates and current promotions were marketed online and in branches through posters, table toppers and buttons worn by employees. The credit union also conducted employee competitions, with financial rewards for teams that signed up the most new accounts. A team of employees recently split a $1,500 cash prize for bringing in the highest number of new accounts during a three-month period.
The credit union’s credit portfolio performance has not reached the ceiling yet, Tierney said, and the staff will continue to launch promotions and keep its credit offering competitive in the coming years.
“Credit unions that invest in their credit-card portfolios can successfully compete with national card issuers because members prefer to use our plastics if we offer an attractive package,” Tierney said. “We made a moderate investment in our credit program and achieved dramatic results.”
Wescom CU
Category: Security
By Kevin Jepson, Technology Correspondent
PASADENA, Calif.–Members at Wescom Credit Union here send confidential financial information over the public Internet, where it becomes fair game for malicious hackers.
“Messages sent over the public Internet are subject to many different kinds of threats,” said Dave Cerwinski, director, sales and marketing at the $3.9-billion CU’s CUSO, Wescom Resources Group. “It’s not a safe channel for private financial data.”
The problem is not isolated to Wescom: credit unions nationwide hear with regularity from their members who send an unsecured e-mail to the CU’s public e-mail address and include an account number or Social Security Number.
In June 2006, Wescom offered members a better option: contact the credit union through its new secure messaging solution, eMailbox.
“eMailbox opens up the ability for us to have detailed communications back and forth with our members through e-mail–without any data security risk,” explained Cerwinski.
Developed by Wescom using the Microsoft .NET programming framework, the eMailbox e-mail application operates within the credit union’s encrypted homebanking sessions.
“We wanted something that fit within the skins of our own Internet banking solution, which was also developed in-house,” Cerwinski said. “We wanted members to feel fully comfortable with the fact that they are within their secured login session. Third-party solutions had a different look and feel that could not be modified to the degree we needed.”
After logging-in to homebanking, members can use eMailbox to compose a secure message and attach confidential documents, if necessary. In turn, when Wescom e-mails a member through eMailbox, new message alerts appear within homebanking and are also sent to the member’s e-mail address of choice.
“Members can be reached for the notification of a message through any e-mail handle whatsoever, including handles associated with mobile devices such as cell phones and Blackberries,” Cerwinski said.
Members appear to be happy with eMailbox, he continued. “The solution is handling between 8,000 to 10,000 secure e-mails per month.” Of course, not every member knows about or remembers to use eMailbox, said Cerwinski. “We do still get those public e-mails. It is a continuing education process.”
Tower CU
Category: Queue Management
By Scott Messmore, Reporter
LAUREL, Md.–Like nearly all credit unions, Tower Federal Credit Union did the best job it could to greet its members, make them feel at home and sign them up to speak with a member service representative as quickly as possible. The trouble was, even that effort was taking too much time and didn’t determine if the member was truly satisfied.
For members needing assistance, the traditional strategy had been to greet the member, sign them in by hand, and note the time and requested service. When finished with each member, MSRs would initial each entry and write down a completion time. At the end of the day, an employee would calculate the wait and service times and manually enter the data into a spreadsheet. Even with hours of inputted data, Tower Federal managers still couldn’t determine average member wait time without more work.
With some 117,000 members, the $1.6-billion credit union had both internal and external reasons for wanting to improve its processes. Seeking a solution that would address the issues and deficiencies it had identified, the $1.7-billion Tower Federal turned to Financial Management Solutions, Inc. (FMSI), of Alpharetta, Ga., for help. FMSI provides a Lobby Tracking System tool provides data on when, where, how and why members were coming to each branch.
“It automates the member traffic,” explained VP Steve Camp.
Specifically, the Lobby Tracking System that Tower FCU deployed in mid-May monitors the number of members visiting for non-teller services, the purpose of their visit and their wait time (including in real time), who is serving them, what products are being sold and the length of each session. Camp said LTS is displayed on screen for all credit union employees to see, allowing them to quickly react if a member waits too long and to greet them by name. The user interface for MSRs and lobby staff includes drop down menus with various products and services for potential cross-sells. Camp noted that he can “sign into each branch and see which members are there.”
Camp said Tower Federal has also tested the solution at a branch that doesn’t have a full-time receptionist. Members can access a kiosk near the reception desk to enter their name and account number and the reason for their visit.
“With a kiosk, they can help themselves if the receptionist is too busy. A member service representative might get to them before the receptionist,” Camp said.
According to Camp, Tower Federal is also using the Lobby Tracking System to assist with better staffing at the branch level, as management can track traffic levels in each of Tower’s 12 branches to determine which members are going where and if more tellers or MSRs are necessary and during what time of the day. In fact, Camp said one branch that had been operating with extended hours until 8:00 p.m, but the Lobby Tracking System showed only two members typically visiting the branch during the 7 p.m. to 8 p.m. hour. Camp said management has recommended to the board that the branch close at 7 p.m., a move that could potentially save the credit union $100,000 per year.
“LTS showed how many members were visiting. It’s amazing that someone hasn’t rolled something out like this before. It’s definitely needed,” he said.
Camp said TFCU paid approximately $20,000 to launch the LTS software and achieved a positive ROI in about five months. Moreover, the software has shown the credit union where it can cut on position. “That will pay for it right there,” he said.
Camp added that an additional benefit of LTS is that if a member isn’t satisfied with a visit even two months prior, he can use the system to learn when they visited and which MSR met with them, to determine a proper course of action.
Prior to eMailbox, members had only two options for electronic messaging: contacting Wescom via public e-mails or via transaction inquiry forms embedded behind secure homebanking.
Whereas the first option was not secure at all, the second option offered only one-way security–members could send secure messages but Wescom could not reply. Instead, the CU had to respond by making a phone call or posting a letter to the member.
eMailbox not only increases the security of communicating with members, it also saves money for the CU, according to Cerwinski.
“Since this product typically eliminates a phone call, we believe it has a 50% cost savings,” he said. “This is because member inquiries and requests that flow through our call center have been measured to average about twice the cost of an inquiry through the email channel.”
eMailbox was designed to fit right into Wescom’s existing email server, making it easy for staff to use and maintain, added Cerwinski.
“The beauty of this solution is that it integrated with our existing Microsoft Exchange server,” he said. “Staff was already well-trained on Microsoft Outlook. IT staff did not want another application to manage. Virus scans and security features already built into Exchange could be extended into the eMailbox system. And the detailed routing rules built into Exchange, such as keyword subject-line routing, could be supported without reinventing the wheel.” Through partnerships with Wescom Resources Group, five other credit unions are also using eMailbox.
Smart Financial CU
Category: Internal Marketing & Incentive Plans
By Joyce Moed, Reporter
HOUSTON–At the beginning of this year, Smart Financial Credit Union implemented a series of team challenges and incentives titled “Teaming up to Provide Superior Service.”
The challenges are designed to build teamwork between departments, improve internal and external member service, improve coaching skills, and increase product and service sales. Each employee has been assigned to a team, and managers and vice presidents from all areas have been assigned coaching roles for their teams, which each consist of a mix of frontline staff, and support area staff. Teams choose their own team-name, colors and mascot. They also have their own team page on the CU’s Intranet.
The first challenge took place throughout the four weeks leading up to the Super Bowl. Each week represented a quarter of the football game. Teams scored touchdowns by earning yards for each new checking account, debit card, and new online banking activation. They also earned an extra point for every loan cross-sold to a member opening a new checking account. Team and individual-player points were tracked and updated on the CU’s Intranet each day. The team that scored the most points during each quarter won a pizza party and a day to wear jeans and shirts with their team colors. The team that scored the most points for the entire four-week game won a “tailgate party” with executive management.
During the four-week period the teams opened 358 new checking accounts, 344 new debit cards and 479 new online banking activations. There were also 39 loans cross-sold totaling $357,000 to new checking-account members. Also during this first challenge, the number of frontline staff not qualifying for the monthly incentive payout was reduced from 14 to 4.
The second team incentive–March Madness–took place throughout three weeks and focused on cross-selling credit cards, loans, CUSO loan products, checking accounts, debit cards, and online-banking activations. The incentive consisted of a basketball-themed tournament with the teams competing against each other for a chance at the championship prize and a runner-up prize. There were also weekly prizes for winning teams that scored the highest points per player. The championship team won a dinner hosted by the credit union’s CEO at his home.
During the three weeks of the tournament, the staff cross-sold 265 checking accounts, 396 debit cards, 258 online banking activations, 248 loans, 39 CUSO loan products, and 32 credit cards.
“One of the key components of a successful program is the ability to track sales results and provide daily feedback to staff and managers,” said Gary Tuma, president and CEO of Smart Financial. “This provides managers with the information they need to coach their employees on their progress and allows staff to know where they stand towards achieving their goals. Team incentives that involve both frontline and support area staff are a fun way to get the entire staff involved while reinforcing the message that it takes everyone working together to serve our members. Using creative incentive campaigns and team challenges are also an effective way to motivate staff to exceed sales goals and to reward and recognize their achievements.” Because of its success, there are two more challenges planned for this year: an eight-week racing theme challenge and a pirate treasure hunt.
Ascend FCU
Category: Branch Design
By Joyce Moed, Reporter
MURFREESBORO, Tenn.–Ascend FCU’s new branch design provides its employees with the tools they need to provide their members with the best service possible.
The design at its newest branch is not the only thing that’s new at the CU–so is its name. Ascend FCU’s was chartered in 1951 as AEDC FCU to serve the employees at Arnold Engineering Development Center at Arnold Air Force Base. Research confirmed existing members had little understanding of what the acronym stood for, and that the name would have little impact as they moved into larger markets. “The research simply validated what we already knew,” said Steven Passarello, chairman of Ascend FCU’s board of directors.
So they knew they needed a full makeover: a new name, a new brand, and brand-infused branches to move the $1-billion CU into the future while setting it apart from competing financial institutions. “We are no longer a one-room operation at Arnold Air Force Base serving one core group,” said Caren Gabriel, CEO at Ascend FCU. “We have not been sold, and we have not merged with another financial institution. To propel us into the future and set us apart from other financial institutions, we have changed our name to better reflect who we are, the companies we serve, and where we’re going.”
With the groundbreaking of the new branch in Murfreesboro, known as “Victory Station,” the CU began the implementation of a facilities plan that also renovated the existing branches to reflect a consistent image.
The “Ascend” experience begins as soon as a member enters the new facility through a rotunda that mimics the look of an air traffic control tower. Ascend’s brand and aeronautical heritage permeate the facility through the creative use of aircraft materials such as parachute fabric and metal rivets. An employee at the “Greeter Station” welcomes and directs individuals to the appropriate service area. Teller lines and individual employee offices have been eliminated, as well as the concept that sales and service are mutually exclusive. Ascend has adopted an off-site retail platform to provide more open and interactive experiences for members. Traditional offices have been replaced with six member-service rooms used alternatively as members come in to open new accounts. Another addition is “Dialogue Towers, Strategic Retail Centers,” a biometric safe deposit box area.
“‘Ascend’ means to move upward, and that’s what our credit union is doing,” he said. “Another reason we chose ‘Ascend’ is the importance the board places on our roots at the base.”
In the five months since its official opening, Victory station has realized household growth of 8.28%. Annualized, they project new household growth of 19.88% this calendar year. The annualized profit of households within a three-mile radius of Victory Station has increased 4.5%.
Annualized deposit growth has increased 10.3% and annualized loan growth has increased 13.9%. In addition, the number of services cross-sold into these households has increased at an annualized rate of 21.5%.
Call FCU
Category: Branding
By Joyce Moed, Reporter
RICHMOND, Va.–Like the caped crusaders (also known as the marketing and business development team members at Call FCU) who helped create it, only iDude was heroic enough to answer the call to duty as this credit union’s mascot.
About one year ago, Call FCU realized it had reached 90% of its potential membership. The CU’s growth had slowed down from about 9% per year to 1 to 2% per year. So Call FCU opted to add several underserved areas to its field membership, which gave the credit union the opportunity to reach more than 500,000 potential members. But before launching into its new markets, the credit union decided to take the opportunity to rebrand.
During the next couple of months, the $254-million CU engaged in research with both the staff and its members, which helped it develop its new vision statement: “To empower our members to become the heroes of their financial lives.” The credit union associated each verb with a color and created a symbol on its logo, made up of a crown of lower-case “I” letters, known as its “doodad.”
Each color represents one of six components that makes their members financially whole: Empower = red, Dream = blue, Connect = orange, Enrich = grey, Build = green, and Restore = brown.
The iDude is the embodiment of one of the “I” letters that make up Call’s “doodad.”
There are links for each of the six components on Call FCU’s website, with options listed for each component. Empower includes choices such as: What’s a Credit Union, Who Can Join, Our History, and Branch Information; Dream includes choices such as: Auto Loan, Mortgage Loan, Personal Loan, and Visa Credit Cards; Connect includes choices such as: CU Service Centers, Electronic Bill Payment, and Visa Account Access; Enrich includes choices such as: Scholarships, Teen Club, and Kids Club; Build includes choices such as: Share Savings, Investments and Retirements, and Money Market; and Restore includes choices such as: Credit and Budget Counseling, ID Theft Resource Center, and Hurricane Prep Kit.
“Rebranding is a painful but worthwhile process,” said Roger Ball, CEO of Call Federal Credit Union. “In retrospect it created an environment that allowed us to really figure out and embrace who we are as a credit union and to really put it into words and give it a look. Being a left-brain person, it may have been my first lesson in modern art.”
The credit union’s doodad makes visits all over town, and has its own blog where its visits are documented for members to read. Members can read about these adventures, which include: giving blood and going to a musical festival, at www.icandoanything.wordpress.com.
Though the brand launch only took place a few months ago, there are already some signs of success: website visits have increased more than 35% since the branch launch, assets remain steady at a time when historically the credit union takes a significant dip, members have made positive comments about the brand, and it’s becoming common to see magnetic iDudes in staff and members’ offices.
Prior to the introduction of iDude, Call Federal Credit Union made good on its promise to be “the heroes” of its members financial lives by launching the “Be The Office Hero” promotion that encouraged people to bring credit union services to their workplace.
Evangelical Christian CU
Category: Lending
By Scott Messmore, Reporter
BREA, Calif.–The $990-million Evangelical Christian Credit Union (ECCU) here has a long history of making loans to churches across America to build new houses of worship, schools or to expand existing facilities. For the last 20 years, ECCU has also included among its strategic goals serving its members’ needs in commercial real estate.
Goal In Conflict
That goal, however, has conflicted with regulatory limits on loan amounts, noted Tim Lewiston, VP-participations.
Nevertheless, with its mission to aid religious groups of all types in mind, not helping wasn’t an option for Evangelical Christian Credit Union.
“So we began (loan) participations to help,” explained Lewiston. “(Members) continue to add new facilities. On the loan side we grow 20-30% a year.”
With all of that sustained growth, Evangelical Christian CU’s core processor couldn’t keep up. Before switching to The Complete Credit Union Solution from Glastonbury, Conn.-based Open Solutions Inc., Evangelical Christian Credit Union’s computer system actually limited the number of digits the could be inputted, thereby capping the loan amounts.
Evangelical Christian Credit Union doesn’t play with small amounts; when Wycliffe Bible Translators needed a new aircraft for its missionary work overseas, for example, the credit union offered a $500,000 loan to buy a Beechcraft twin-engine plane that was quickly used in New Guinea to help save a sick teenager.
Another unique loan that required participation from other credit unions was made to Heartland Community Church in Rockford, Ill. Heartland Community was growing fast enough that it made plans to purchase a local mall, gut the old J.C. Penney’s and build a new church while keeping the remaining tenants. Church officials created a coffee shop, a religious bookstore and a need for a big loan amount–$25 million to be exact.
While Evangelical Christian Credit Union has an existing network of credit unions that have participated in its loans, Lewiston said the ability to participate out a loan the size of that made to Heartland Community was only possible because of the expanded processing capabilities of its Open Solutions’ system, which cannot just crunch the numbers but also ensure payments are promptly made.
“Without the participation network we couldn’t have done that loan. We also have to have the best technology to handle the huge volume,” he said.
Significant Growth Recorded
In 2005, ECCU had $585 million in participation loans; by this year that amount has grown to $700 million.
Evangelical Christian Credit Union Director of Loan Servicing Lisa Tindal said its software now keeps tabs on payments from the borrower, immediately sends it to the loan participants and issues a report for record keeping.
With some of the credit unions buying loan participations for as much as $8 million, timely reporting is critical.
“It’s faster. It’s in real time. It’s more accurate. Accuracy is key,” Tindal said.
Kitsap CU
Category: Internal Communication
By Michael Bartlett, Reporter
BREMERTON, Wash.–Kitsap Credit Union put a modern twist on the hoary cliché “Necessity is the Mother of Invention,” when it adapted its company intranet to create an automated, electronic accounts payable system.
Deborah Tyree, the credit union’s accounts payable representative, said Kitsap has used the intranet as a portal for quite some time. Earlier this year, management realized “Passageways” [both the name of the company and the name of the intranet product it oversees] had the capability to do much more than just e-mail. She praised Passageways, the company, as being “wonderful” to work with.
“We wanted to save time and reduce costs,” Tyree recalled. “It was taking a week to route invoices to our 17 branches to be approved, and every step had to be done by courier, which costs a lot. Every invoice had to be entered into our accounts payable system by hand, which was time-consuming. Then, the paper invoices had to be saved for seven years, and paper storage costs money.”
With the new system, Tyree continued, a vendor can submit an invoice by e-mail and approval can be done while a CU representative is looking at the image for the first time.
If an invoice needs to be declined or disputed, the system routes it back to the proper person.
Anyone who approved or declined an invoice can go back into the archives for months or even years to see the disposition, she said.
Josh DeBoer, Kitsap’s projects manager, said the $688-million credit union renamed the Passageways intranet “CU@Work.” He said it is similar to Microsoft’s “SharePoint,” and allows companies to set up an internal website.
“Departments can set up folders, which allows other departments to see procedures and share information,” DeBoer explained. “On the credit union level, the system lets us put applications in place that allow everyone to have access to the purchase order and accounts payable systems. It is used for information sharing, as well as internal and external departmental communication.”
Kitsap implemented the automated AP system in March. Since then, Tyree said, the entire process “has been great.”
“It is user-friendly, so everyone who touches it is happy. It leaves an audit trail, and it is less likely an invoice will be lost. Instead of a week, invoices usually are turned around in two days from the time they are received. If a manager is sitting at his or her desk when the invoice comes in, and approves it immediately, the process can take as few as 10 minutes.”
According to Tyree, the time savings has been “huge” for an accounting staff that processes more than 500 invoices per month and cuts checks once a week. In addition, she said management appreciates the increase in accountability, and all of the CU’s vendors are happy.
ROI Still Being Calculated
“We have not calculated ROI yet, because it has only been a few months,” she said. “We will need to quantify cost savings of courier fees, paper storage and person hours, but it is significant.”
Asked if she had any advice for other CUs, Tyree said if a credit union already has the Passageways product or something similar, “automating AP is the wave of the future.”
“Get away from routing invoices and getting a hard signature,” she counseled. “If members are doing electronic bill-pay, why not credit unions? If the technology is out there, why not use it?”
For the CU’s next trick, Tyree said she would like to do ACH automation.
“The Federal Reserve is pushing it, and that’s a step I’d like to see the credit union take.”
City-County FCU
Category: New Membership Drive
By Joyce Moed, Reporter
BROOKLYN CENTER, Minn.–City-County Federal Credit Union realized that what worked for getting new members in the past wasn’t working today; it was time to rethink its approach to membership recruitment.
The idea: dramatically increase membership in order to have a larger and stronger base to draw upon in the future. The board asked staff what would bring in new members, and the staff came up with a program they felt was both easy to understand and easy to embrace.
They began by setting an unprecedented goal for net new member growth of 10% for 2007. (The $481-million credit union had already run successful new membership marketing campaigns achieving 4.02% and 3.73% net membership growth in 2005 and 2006, respectively.)
In order to achieve this ambitious goal, the staff felt that they needed a tool to encourage existing members to help them attract new members. They created a coupon for existing members to give to those of their friends and relatives not currently CCF members. Existing members would receive $50 for each new member they referred. The new member would receive $25 for a new Share Account and $10 for each additional account opened. If the new member redeemed their coupon within 90 days of receipt, they received double the pay-out.
The program, dubbed “Shoot for the Stars,” kicked off Feb. 3, and by June 30, year-to-date net membership growth was 8.8%. New members who’ve joined as a result of the program have taken out more than $6.9 million in loans and have brought in more than $10 million in deposits. ROA has suffered because of the funds paid to new and existing members under the program and to staff for sales incentives, but capital has remained strong at 8.81%. The year-to-date total payout is $520,000, which is about the same amount spent on CCF’s entire 2006 marketing budget, but with better than double the results.
The quality of these new members is high, the credit union reported. A sampling shows that the majority have Beacon scores above 600. The sampling also shows that CCF’s new members are signing up for multiple accounts. So far, new members have opened a total of 2,470 new checking, CDs and money market accounts.
The “Shoot for the Stars” program has been especially popular with young people. More than 40% of new members for 2007 are individuals are younger than 23 years old–a vital demographic for credit unions to reach.
“We found it to very successful, and it got to be a little expensive,” laughed Dean Nelson, president of the credit union. “The students at the high school heard about our [referral] program. We had busloads coming through our door.”
But jokes aside, Nelson said by the end of October, new membership in the CU was by 17%.
Arkansas FCU
Category: Operations Efficiencies
By Scott Messmore, Reporter
JACKSONVILLE, Ark.–Arkansas Federal Credit Union isn’t afraid to set a big goal. At about a half billion dollars in assets, the CU is looking to join the billion-dollar club quickly–but to do so, it needed to change the way things were getting done.
“Our goal is to double the size of the credit union in five years,” VP of Retail Operations Jason Thompson told the Credit Union Journal.
But, Arkansas FCU staff knew it couldn’t grow while still having difficulty scheduling projects and getting them completed. Last year AFCU launched Connections Online that allows staff to see and track all ongoing projects and how they fit in with the overall goal of “Improving Each Members’ Financial Life,” the credit union’s new mantra.
The Connections Online website states that it “creates one virtual touch point for every employee in the organization-every leader and employee can ‘connect’ with the company’s strategy, projects, and work for which they are accountable.” Thompson said the goal of doubling the credit union’s size in five years is a reachable goal now that staff and employees are all “on the same sheet of music.” Anyone seeking answers on any project from new loan drives to the status on a new computer system can check the progress, milestones and project due dates.
“Everyone in the organization has access to the front page,” Thompson said. “When we’re in a board meeting and a question comes up, we’re all on the same page.”
Thompson credited AFCU CEO Larry Biernacki with creating the five-year vision and setting the framework for the CU staff to accomplish one goal at a time. Thompson said as a result of starting Connections Online, Arkansas FCU has remodeled and upgraded the CU call center, launched a tiered savings program for members, tested is disaster recovery plans, implemented new checking plans for military members, opened a branch at Little Rock Air Force Base, bought land for another future branch and created new certificate programs, including one for kids. Seemingly mundane projects such as the installation of new wallboard in the new branch is listed on Connections Online for all to see, he said.
Thompson also said the internal efficiencies provided by the online planning tool caused a 14.4% share growth; 20.7% asset growth; 24.8% increase in gross revenue and an 8% increase in membership. Thompson said AFCU was most pleased with the fact that fully 80% of its recent growth came from the existing membership, reflecting the benefits of better planning and project completion.
“We were pleasantly surprised,” Thompson said.
Thompson said the CU staff is happier, better trained and more aware of operations as a result. Arkansas FCU was at $410 million in assets in January 2006 and Thompson said he expects the credit union to be worth roughly $545 million at the close of 2007. The long-term goal is still the same: by Dec. 31, 2010, Arkansas Federal Credit Union is looking to be worth $820 million, one goal at a time.
Carolina Postal CU
Category: ACH Direct Deposit
By Scott Messmore, Reporter
CHARLOTTE, N.C.–Carolina Postal Credit Union discovered a unique way last year to serve its harried membership, increase deposits and separate itself just a bit more from local bank competitors.
Serving mainly postal and federal workers who obviously have steady paychecks, the $62-million Carolina Postal was seeking a way to make Fridays go smoother for members and employees. By Friday of each week, bills that have finally come due or mail that has accumulated all week needs to be delivered. As letter carriers also work on Saturdays, they can’t run errands the next day as many people can, and that includes visiting a financial institution branch.
Consequently when payday Fridays hit, even CPCU’s extended hours until 6:00 p.m. weren’t helping all its members, nor were they satisfied with the other service options, including online banking and ATMs.
“Friday is the most busy and stressful time of the day. A lot of times at 10 ’til six (p.m.) they call saying ‘Please stay open, I’ve got to take care of something’,” explained VP of Marketing Deb McLean.
McLean noted that many of its members employed by the Postal Service and government have direct deposit and know exactly when they’ll get paid, with some members even knowing the date the funds are deposited in the automated clearing house (ACH) prior to disbursement.
“We could see it in the ACH warehouse Wednesday morning,” she said.
McLean said CPCU staff had learned of a California credit union that had started posting ACH direct deposit funds early for selected members and charging a fee for the service. McLean said Carolina Postal was finally driven to act after a consultant whom it had retained recommended pursing the strategy as a means of driving growth in share draft accounts. “Trying to capture a checking account is getting more and more challenging,” she said.
The result: Carolina Postal introduced its membership to a service it dubbed “Priority Payday,” allowing word-of-mouth to help spread the word. Enabling the launch of the product was a move to a new core processing solution from Symitar Systems, San Diego, that is capable of posting individual payments.
For Carolina Postal, the debut of Priority Payday is also aimed at countering the growth of payday lenders in the area. “It’s not a loan. We know it’s coming in, everyone can see it. We’re just posting early,” she said. “It didn’t cost us anything.”
She added that the credit union’s primary sponsor has also been very pleased with the addition of the service.
McLean said when she’s discussed Priority Payday with other credit union officials some have asked if the product is, in fact, a loan that needs to be treated that way. Others have wondered whether Carolina Postal is encouraging poor financial management habits in members.
McLean countered that her credit union is in a good position to offer the service, as the federal government is going to routinely deposit the funds and the credit union can rely on that to offer the funds early. Moreover, she said, any of its 9,500 members who is going to pull a fast one with their checking accounts won’t be encouraged or discouraged by getting early access to their paychecks.
“If they’re going to bounce a check, they’re going to do it anyway,” she insisted.
In the first month of Priority Payday, Carolina Postal CU increased its core deposits by $1.1 million and added both new members and new checking accounts. “It’s no longer frantic Friday. The members love it. It took a few weeks to get used to it and believe it,” she said. “People are asking ‘What’s the catch?’”
Ent FCU
Category: Member Involvement
By Michael Bartlett, Reporter
COLORADO SPRINGS, Colo.–Ent Federal Credit Union celebrated its 50th anniversary with a free “financial expo” for its members.
Lois Carlock, Ent FCU’s education and event manager, said the expo not only offered financial advice, it gave members the opportunity to learn more about local community organizations, attend some of Ent’s most popular seminars, enjoy light refreshments and giveaways, visit with the credit union’s staff, and attend the annual business meeting, all in an informal atmosphere.
The concept worked, Carlock told the Credit Union Journal. She said attendance surpassed Ent’s goal as more than 500 members and guests showed up. According to Carlock, the event was interactive, good leads were generated by Ent’s business banking and mortgage representatives, and members received education and assistance.
“We were really, really happy,” she said. “We didn’t know what to expect as it was the first time. We held it from 3-7 p.m. on a weeknight, and it drew an older crowd. If we did it again we would host it on a Saturday to bring in more families. My advice to other credit unions that want to offer a financial expo would be to examine who they want to attract. Perhaps we could have offered car buying seminars or other things to bring in younger members.”
Three vendors that work with Ent had tables at the expo. One was Elan Financial Services, Ent’s credit card provider, which had two representatives present and offered giveaways. “They talked about credit card debt and using credit cards,” Carlock said.
Balance, a financial fitness and consumer credit counseling service that works only with credit unions, also attended. “Our members can call them on a variety of products,” she said. “Balance explains credit reports line-by-line.”
America’s Family, which teams with the $2.2-billion CU to offer small personal loans, explained its services. Carlock said the group works not only with low-income, but also “challenged” borrowers.
The athletic department from the University of Colorado at Colorado Springs, where Ent opened a campus service center in 2006, was on hand with its mascot, and the American Numismatic Association brought its popular traveling money exhibit.
“Several of the non-profits we partner with came and talked about what they do,” Carlock said. “There were 16 agencies talking about volunteering opportunities, including the American Cancer Society, the Care and Share Food Bank, the United Way and the YMCA.”
In addition, Ent offered mini-seminars on such subjects as credit scores, identity protection and “Do I really need a will?”
According to Carlock, a financial expo exemplifies the “best practice” of member involvement through a hands-on event that allows members to participate, rather than just attend. She said this type of event can be successful for any size credit union because it places an emphasis on adding member value beyond the convenience of branch locations and a menu of products and services provided.
She said relationships and partnerships exist between all credit unions, their vendors and community agencies, and “these can be leveraged to present an event that highlights the credit union difference and the value of membership.”
Carlock acknowledged ROI is difficult to track on an open house event, but said, “We had a lot of good verbal feedback. We had two drawings, including one where people had to get a card initialed at all 16 tables. That drawing generated 306 entries, which I thought was really encouraging.”
FORUM CU
Category: Auto Loans
By Scott Messmore, Reporter
FISHERS, Ind.–While FORUM Credit Union had successfully been in the subprime auto business since 2005, it nevertheless recognized that its operation needed to improve.
FORUM had been declining auto loan requests from members who had credit issues, and several auto dealerships bluntly told the $1-billion CU that they expected the credit union to be underwriting paper for both prime and subprime borrowers.
Even with the recent mortgage meltdown of this year and the crash of Centrix, which focused on submprime auto lending, in 2006, FORUM Credit Union believed there was value to be had in such vehicle loans, and set out to do better as part of a broader effort to reach more of its 97,000 members and increase its loan yields.
“Most people are running from subprime and we think it’s a good model,” said Doug True, president of FORUM subsidiary FORUM Solutions.
FORUM teamed with Irving, Texas-based Capital Lending Strategies (CLS), which placed a field representative inside the credit union to manually jumpstart the subprime program. At the time, loan applications were being faxed in for approval. The process worked, albeit slowly, with most apps requiring an hour to process. It was an hour that auto dealerships weren’t willing to spend.
Despite the slow approvals and dealer complaints, FORUM still managed to add $550,000 toward its bottom line in 2005 from submprime lending. But the program plateaued as the result of internal conditions. As the result of a decision within FORUM to trim its origination goals to accommodate liquidity needs (its loan-to-share ratio was hovering around 140%), net income from subprime lending declined to $150,000 for 2006. . True said FORUM knew that 2007 had to be the year of change.
“We stalled out there because we weren’t automated,” True said. “We weren’t getting deals. The dealers said ‘You’re too late.’”
To solve the problem, $1-billion FORUM Credit Union looked inside for answers to its own FORUM Solutions, which offers a solution it calls TAPS Enterprise Lending software to other credit unions to automate their lending proceeses. In addition to the underwriting, TAPS also offers cross-sell recommendations, customized business rules to support tiered pricing, and complete integration of forms and reports.
In this case, TAPS interfaces with auto sellers through DealerTrack. The business rules deployed within TAPS then automatically refers applications it identifies as subprime to the scoring model offered by Capital Lending Strategies to quickly provide a rejection or an approval, along with generating a rate on the loan.
“Loans are a commodity business. A lot of times, efficiency is the difference,” True said.
True said the subprime loans now are now turned around in less than five minutes. The result, according to True, is that credit union is projecting growth beyond $25 million in outstanding subprime auto loans. The delinquency rate on the portfolio is 5.07% and its charge-off ratio is .87%, creating a gross yield of 16.25%.
“The hang up was the turnaround time. That’s when volumes started picking back up, when we automated it,” he said. “We’re the only ones to automate it and take it seriously. Our members have voted with their wallets, saying they want a loan at the dealership.”
True said FORUM Solutions has developed a 14-page Blueprint Report that details the costs of the program and provides a step-by-step list of recommendations for credit unions wishing to expand their own automated subprime auto lending program. The report is free to partners in FORUM Solutions; it’s $50 for non-partners.
Bull’s Eye CU
Category: Privilege Pay
By Lisa Freeman, Managing Editor
WISCONSIN RAPIDS, Wis.–In the midst of extremely difficult times for its members and community–and the credit union itself–Bull’s Eye CU was able to ramp up a service offering that both filled a real need for its members and helped drive new revenue for the credit union.
The “magic service” was the privilege pay program–often referred to as courtesy pay or overdraft protection–offered through Harland Financial Solutions’ UltraData Enterprise core system.
“Although we are happy with the income we’re generating, the real plus is how many extra costs we’re now able to save our members,” offered David Stark, CEO of Bull’s Eye.
“From December 2006 to May of 2007 we generated $355,000 in fees. But, I can tell you; we were able to save our members well over $500,000 in merchant overdraft fees. Privilege Pay lets us give them a low-cost alternative.”
To understand why the service was a godsend for BECU membership requires a brief history lesson. Bull’s Eye Credit Union was founded 75 years ago to support the mill workers of central Wisconsin (indeed, Bull’s Eye refers to a log rafter’s landmark that indicates the deepest part of the river, allowing a logger to steer logs to the final destination with minimal loss). In 2000, the local economy had fallen on hard times. “The community lost 3,000 jobs between the year 2000 and 2006,” Stark explained. “At the time, we didn’t have an overdraft option in place.
Originally, we’d call our members to see if they had the funds to cover the overdrawn checks. But, as volume levels increased, we just didn’t have the manpower anymore. We were returning checks, the merchants were charging high fees, and we were frustrated that we couldn’t help our members more.”
The $105-million credit union initially turned to an off-line third-party solution, but quickly realized that what it really needed was a process that would integrate with its core system.
“The third-party system required more man hours than we liked because we couldn’t automate it,” he related. “When members called to ask about their account, not everyone had access to the information, so the teller couldn’t explain to the member what was going on.”
Customizing the solution would have been a long, laborious and expensive process, so when Stark learned that his CU’s core processor was working on a solution of its own, he decided it was worth waiting for Harland.
“By going to a system that integrates with our core system, first and foremost we were able to improve member service because it assured multiple users could have proper access to the system to be able to answer member questions right then and there,” Stark commented. “Behind the scenes, we were able to reduce the labor hours dedicated to privilege pay.”
Measuring what this service has meant to its members has both a tangible and intangible element to it. “Even though this has helped generate fee revenue for us, it’s still drastically reducing the fees our members are paying. Before they could easily be paying $125 or more between the NSF fee to us, plus the fee from the merchant, etc. Now, they’re looking at a straight $25 fee,” Stark observed. “But it’s also about protecting our members’ credibility with the local merchants. We had a lot of people here who lost their jobs through no fault of their own, and when times got tough, they still had to be able feed and clothe their families. They couldn’t afford to build a reputation for writing bad checks, and we didn’t want our checks getting a reputation for bouncing all over town, either.”
The results for the credit union are tangible–and measurable–too. The new system allowed Bull’s Eye to save four hours a day in manual processes, reduce staffing by one and one-half full time position, and dramatically increase fee revenue. From May 2006 to May 2007, the fee income rose from $136,000 to $335,000–a 161% increase, with a third of this coming from debit card Privilege Pay income.
As for ROI, Harland had promised Bull’s Eye the system would pay for itself in six months. Harland lied–it only took three. “When we went to the board, we pared down some of the projections that Harland had provided to us. We wanted to be really conservative about this,” Stark related. “But not only did it do even better than we projected, it did better than Harland projected. It was even more successful than we thought it would be.”
Moving to the automated system also helped Bull’s Eye ensure that its privilege pay offering was compliant with regulatory requirements, added Brenda Van De Loop, operations manager of BECU. “It’s improved our consistency, as well,” she noted. “Because it’s automated, it’s black and white so everyone is treated the same.”
The system also integrates with the credit union’s collections work card, speeding up the collections process when some of these accounts end up in collections, she added. “It’s very flexible because it has the ability to integrate with debit, ATM and ACH.”
Mountain America CU
Category: Retirement Planning
By Michael Bartlett, Reporter
WEST JORDAN, UTAH–Mountain America Credit Union turned to Hollywood as inspiration for its successful “Build Your Retirement” campaign that made the CU the place its members turned to for retirement planning.
Comedian Tim Allen’s fictional television show, “Tool Time” served as a benchmark for the construction-themed promotion, which also included a gingerbread house-making contest, crowbar deliveries as teasers and employees wearing hardhats in the branches.
The campaign ran in the first quarter this year, and certainly got MACU members’ attention: term deposits skyrocketed to $213.6 million from $94.7 million, and IRA deposits nearly doubled to $26.1 million from $13.5 million.
Matthew Clark, Mountain America’s vice president of investments, and Nathan Anderson, senior vice president of sales and marketing, told the Credit Union Journal the campaign grew out of a desire to educate MACU’s membership for the future. They realized the best method was to begin by educating the credit union’s staff.
“Nathan and I put our heads together, because many financial institutions struggle to get their employees knowledgeable as to the difference between Roth IRAs and regular IRAs,” Clark recalled. “We wanted to help our members in their lifetime financial pursuits.”
As Clark and Anderson brainstormed with the rest of MACU’s marketing team, a “construction” theme soon emerged. Clark said most of Mountain America’s members do not do a good job of saving for retirement, even though putting away a little bit each month really pays off.
The construction theme led to a spoof of “Tool Time,” a TV show that existed on Allen’s 1991-1999 situation comedy, “Home Improvement.” MACU’s spoof featured Clark in Allen’s role as “Matthew ‘the Toolman’ Clark” and Gordon Combs, the credit union’s sales supervisor, in Richard Karn’s “Al Borland” role.
“We had three goals,” Anderson told CUJ. “First, get employees excited, which would get them talking to our members. Second, we wanted to get them educated. Third, we wanted to get our membership excited.”
Mountain America wanted to go beyond a “typical campaign,” Anderson continued. He said the $2.2-billion CU wanted to combine different elements of education, excitement and interest from members to get them excited about the topic, as well. The “Tool Time” spoof grew out of the theme of “building” retirement savings and the goal of getting employees excited, which led to a 10-minute DVD.
“Matthew and Gordon were dressed in hardhats and tool belts and helped introduce the campaign to our employees,” Anderson said.
Added Clark: “We found a production studio willing to do it for a reasonable price. We wanted to make it fun and upbeat. It got some laughs and was money well spent. Once we had the ‘Tool Time’ video, we came up with the idea of ‘marketing inspections’ to make sure members’ retirement savings are ‘up to code.’”
Gingerbread houses continued the theme of building something, Clark said. MACU often looks for ways to allow its employees to have fun, such as contests in its branches. Clark said a gingerbread house-building contest got the staff in the mood for the initial branding effort. The next teaser was a crowbar, which employees were told they needed for a meeting.
The meeting the staff needed a crowbar for was an introduction to Precision Information’s Educated Investor University. Mountain America also set up a one- to two-hour online “Retirement Readiness” course with pre- and post-testing to measure retention.
Of the employees who took the pre-test, the average score was 60%. Post-test, the scores went up to an average of 76%, which management termed a significant improvement. Keeping with the concept of making it fun for employees, Clark said the CU encouraged branches to participate in the Educated Investor University course by providing incentives such as a staff pizza party for every branch that had 100% participation. In addition, front-line employees received incentive payments for every referral they made to an investment services representative.
Clark said 420 MACU employees participated in the retirement readiness course over three weeks. He said staffers had to complete 26 chapters of content, which took about 90 minutes on average to complete. The readiness course gave details about different retirement products, contribution limits and specifics such as catch-up provisions for older members.
After the course was completed, Clark said employees carried “hard cards,” which were similar to a cheat sheet. The hard cards gave “cues and clues” as to what to look for when talking to members.
“The feedback from the retirement readiness course was, ‘This is hard, but we like it,’” Clark said. “Our employees realized if it was hard for them, and they work for a financial institution, then it must be hard for our members.”
Said Anderson; “Everything we did to promote those products was tied to the campaign. That time of year [the first quarter] is when people are looking to contribute to IRAs, which makes the results even more significant.”
Anderson and Clark said Mountain America expects to continue and improve upon the campaign in 2008.
Verity CU
Category: Deposit Pricing
By Scott Messmore, Reporter
SEATTLE–So a guy with a million dollars walks into a credit union …
It sounds like the beginning of an old school vaudeville joke. But for Verity Credit Union here, it’s precisely what happened with one member. While the man didn’t actually have a cool million in cash on hand, he needed to park it somewhere and wanted a quick answer from Verity Credit Union on what options it might offer.
The $331-million credit union responded by highlighting its “Flex Rate” certificate program, which was designed to better attract and retain members with high balances, especially those who are active rate shoppers and who are comfortable going online to do their shopping. Verity EVP John Zmolek said Flex Rate captures deposits from rate-sensitive members whether they have quite a bit of cash or simply like to search for the best rate possible.
“There’s always members coming in or calling and asking ‘Can you match this rate or that rate’,” Zmolek said, a situation faced by many credit unions.
Verity was able to add the Flex Rate certificate to its product menu after making a change in core processors and moving to The Complete Credit Union Solution from Glastonbury, Conn.-based Open Solutions Inc. Under its previous system, the 26,100-member Verity CU had been limited to offering 99 options on certificates, with little ability to alter rates on the spot for members seeking to “bargain” on pricing. Verity can now offer multiple tiers of pricing for each CD level. Member service representatives (MSR) also have the ability to directly override the system if they believe the member might move their deposits elsewhere or simply cash out.
“We could just go in and change the pricing,” he said. “We don’t have to pay the best rate to everyone, all the time,” he said.
For example, a member with $100,000 in a one-year CD who doesn’t contact Verity will have the account rolled over at the posted rate. If they do call in, Verity employees can instantly begin negotiations to prevent a jumbo deposit from moving down the street. Zmolek said while Flex Rate is available to all members, it’s being applied only as needed to retain deposits and keep member business.
“Someone with a $5,000 certificate of deposit won’t bother to bargain over rates,” he observed.
Zmolek said the FlexRate product is credited for being directly responsible for keeping $2.4 million on deposit at Verity CU during August alone. While $2.5 million in CDs rolled over at their maturity dates, the owners of the other $2.4 million in deposits contacted the credit union, specifically mentioned a local Bank of America rate and asked if Verity could do better. One by one, Zmolek said Verity did beat the banking behemoth. Over a four-month period the credit union said that $10-million in maturing deposits were retained as a result of the ability to negotiate with members.
“OSI (Open Solutions) allows you to have pricing at several different levels. You can go in and just over ride the set rate. In our old system we would have had to create an entirely new product,” he said.
Zmolek said the rolled-over CDs were set at 4.14%, while the FlexRate CDs averaged 5.11% for their member owners.
As for that member who was looking to invest $1 million, the result was no punchline–he invested it in one of Verity CU’s FlexRate certificates.
Ohio Healthcare FCU
Category: Privilege Pay
By Lisa Freeman, Managing Editor
DUBLIN, Ohio–How do you know when a new product or service has been successful? When it nearly single-handedly allows you to build your first-ever headquarters.
That’s what happened when Ohio Healthcare FCU launched Harland Financial Solution’s Privilege Pay program. The previously “land-locked” credit union had office space inside two of the hospitals it served, but the $30-millilion credit union was able to use revenue from the new program to build its first standalone main office.
“We had been looking at [courtesy pay programs] for a while, and we knew Harland was developing a product of its own, so we waited for it,” OHFCU CEO Bill Butler said. “As soon as they rolled it out, we jumped on it. The fact that it was part of the core system was key. It meant we didn’t have to go to a third-party provider that would take chunk of the revenue.”
That waiting period also served to help the credit union learn more about courtesy pay and follow the debate in the industry about how the program should work.
“The NCUA letter on [courtesy pay] came out just as we were getting ready to launch,” Butler related. “So that allowed us to make sure we were able to follow the letter to the letter.”
But the credit union was glad it didn’t have to wait much longer than it did. “The banks all around us had been delivering this product for the last 10 years, and it was being used by consumers generally long before we started offering it,” he explained. “We felt it would be of value to our members and also a revenue generator for the credit union, too.”
Deriving value for the membership was an important aspect of launching the program. “I had one member whose husband had expired, and there was a period after his death when she couldn’t pay her bills. She actually thanked me for this product because it allowed her the time to get everything together and get back on track.”
And the value to the financial institution has been huge. The 7,000-square-foot office with two drive-up lanes and an ATM drive-up lane is allowing the credit union to delve into the Trade Industry Profession (TIP) field of membership the credit union was granted. With the new office serving as the credit union’s headquarters and a new Trade Industry Profession Field of Membership, the potential number of members has increased from 15,000 to 100,000. Butler said, “We can now serve all healthcare workers in central Ohio. Privilege Pay is enabling us to successfully serve the new potential members. From 2001 to May 2006, our net new member growth was zero. Now we net at least 40 new members each month.”
Based on the projected revenue from Privilege Pay, the credit union plans to enhance its member service and marketing efforts and invest in additional staff training.
The module cost approximately $5,000 and the credit union pays a monthly fee of $.05 per member. In 2004 the credit union’s fee income was approximately $712,000. At year-end 2005, fee income totaled more than $1.2 million. Fee income for 2006 was nearly $1.4 million due primarily to Privilege Pay.
Greenville CU
Category: Membership Relationship Management
By Lisa Freeman, Managing Editor
GREENVILLE, S.C.–Greenville FCU took what is traditionally thought of as a call center solution and used it for just about everything but a call center, which the credit union didn’t have at the time.
And as backward as that may sound, it worked out well for the $90-million credit union that now does, indeed, have a call center.
“The problem we had was our internal communication,” said Tracy Dangerfield, vice president of information technology at GFCU. “It was really about work flow.”
But it did start off as a way to improve member service. “We wanted to make sure that when a member calls with a question or a problem, they don’t have to repeat themselves every time they get transferred to a new person and have to explain the question or problem all over again.”
To that end, the CU wanted to create a “ticket”–a sort of work order with all the details of every contact with that member that could be forwarded on and added on to by each staffer who had contact with that member about a given problem or question.
Greenville FCU turned to Galaxy Plus and Member Relationship Plus program to fill the bill, and the credit union quickly realized that its new membership-relationship management tool could also serve as an interface between its employees.
“We were inundated with Post-it Notes and pieces of paper, and there was no way to track that communication,” Dangerfield related. “If an employee was sick, there was no way of knowing what that employee discussed with or promised to a member.”
For the credit union’s IT department, whose typical “client” is actually a member of the staff, the system also became a way of organizing and monitoring requests for IT support.
“It allowed us to go paperless, and it became a checkpoint for that communication,” she explained. “Before, it was impossible for IT to keep up with all of the IT requests.”
Suddenly, the “call center application” was a work flow tool with applications for just about every aspect of the credit union. “Now it’s the lifeline for everything,” Dangerfield commented. “We had it all up in running a good eight months before we ever launched the call center. What it allowed us to do was to build a knowledge base that is integrated with our core system.”
One of the reasons Greenville chose the Galaxy product is because several of the call center outsourcers are already compatible with Galaxy. GFCU’s call center is currently entirely in house, but Dangerfield said when and if it expands the call center hours beyond regular business hours, it likely will outsource those expanded hours–and it already knows it will easily be able to integrate its existing system with several call center vendors.
The CU has logged some impressive results, using 60% less paper, saving $4,000 per year, increasing efficiency by 50%, boosting productivity 25% and reducing security risks by 50%.
But with any change comes challenge.
“Probably the single most important thing a credit union needs to do if it’s going to implement something like this is to get the entire senior management team completely on board,” Dangerfield said. “If they aren’t, it’s probably going to fail, or you won’t be happy with the system, no matter which one you choose. You are invoking a culture change down to the level of the way people think and approach their work.”
Dangerfield’s advice to credit unions looking to emulate this best practice: look at a vendor’s “up time” and support.
“Support is critical if something goes down. Ours is a web based application, so if the vendor’s server goes down, our access is down. So you want to look at the up time of the product, and you want to know the support is there,” she said. “You want to take a good look at the functionality of the product. And you have to remember this is not just a call center product. Last but not least, make sure it can be accessed remotely if you ever wanted to be able outsource.”
Arizona FCU
Category: Member Enrollment
By Michael Bartlett, Reporter
PHOENIX–Arizona Federal Credit Union slashed the time needed to open a new member account to eight minutes from the previous 45 minutes, and with greater accuracy, resulting in both a reduction of expenses and happier members.
The account-opening time had increased in recent years thanks in part to rising regulatory requirements, including the Patriot Act and OFAC (Office of Foreign Asset Control). Post-Sept. 11 security brought a need to validate Social Security numbers and verification of other identity documents.
To reduce the time spent opening an account while ensuring compliance, the $1.7-billion CU contracted with USERS’ Maestro Projects Group to integrate the many systems needed to enroll members and open accounts.
The Maestro Group’s new account opening module is known as “Enrollment Workflow.” The module includes communications with third parties for functions such as identity verification for OFAC compliance, including credit bureau checking and postal address standardization.
According to Arizona Federal, all of these steps now take place automatically, without the member service representative having to memorize lengthy procedures or enter member data multiple times. The data is entered once and all steps are guided by the module, resulting in a faster, more accurate process.
Kevin Bingham, Arizona Federal’s AVP of project management, told the Credit Union Journal the new account opening procedure does not have a defined ROI as of yet, but said the credit union has seen the benefit of reduced set-up time.
In addition, he noted, less training time is needed for frontline staff. Previously, Arizona Federal’s training document for account opening was 95 pages long.
“Today, Enrollment Workflow is very intuitive–simply go to a screen, get the information from the member and the process is done,” he said. “They cannot deviate from it. This leads to greater consistency, as every account is opened the same way every time.”
Prior to implementing Enrollment Workflow management for the $1.7-billion CU had the opportunity to sit down with the Maestro Group, which demonstrated its template for new account opening and the information needed. Bingham said Maestro Group walked the credit union through the entire set-up process.
“We made some revisions–every credit union is a little bit different–but Maestro does the hard work such as going out to third-party organizations to ensure compliance with regulations. The most important thing is making sure accounts are set up correctly, the second-most important is compliance with government regulations.”
According to Bingham, negotiations went on for nearly two years before an agreement was reached in January.
He said implementation began in early February, and the module went online June 1. As of Oct. 26, Arizona Federal has opened more than 9,000 accounts with this process. The credit union serves 241,000 members at 25 branches.
“We have improved the time needed and definitely improved quality, because important steps are not forgotten,” reported Bingham. “With improved address information, there is less likelihood of returned mail, which saves money on postage.”
Bingham was the project manager on the team that implemented Enrollment Workflow, and he said feedback from trainers has been very positive because the module is so easy to understand. “From an operational perspective, all the feedback from the folks at the branches who use the tool to set up accounts [is that they] love it.”
Maestro Group was “outstanding” to work with, he continued. Bingham said Maestro takes the approach that anything is possible. “They have a positive attitude about solving problems, which I think is important.”
In the coming months Arizona Federal has three additional projects scheduled with the Maestro Group, including one that will extend the new account opening process to automatically open a sub-share account and order a debit card for the member.
Another is an interface with Experian, which will pull identity information from the person’s credit file.
“Now that we have the set-up process in place, these steps will improve everything,” said Bingham.
Joe Rizzo, vice president of operations for the Maestro Projects Group, a department within Valley Forge, Penn.-based USERS, told the Credit Union Journal it has 24 Maestro credit union clients, 20 of which use Enrollment Workflow.
“Arizona Federal is a great client,” he said. “It is a $1-billion-plus credit union that has seen easily quantifiable results, such as cutting employee time. It has been a big win for us. They told us the training learning curve has been tremendous.”
Rizzo described Enrollment Workflow as a “wizard-like” approach to the account opening process. He said the MSR is asked a series of credit union-configured questions, and it automatically contacts third-party suppliers with the same information for verification steps.
“The user sees a series of screens that guide him or her through the account opening process.”
Envision CU
Category: Old Software, New Tricks
By Kevin Jepson, Technology Correspondent
TALLAHASSEE, Fla. – Fighting the natural urge to run to technology vendors for help, Envision CU instead is taking a hard look in the mirror in order to get more out of its accounting software and business activities.
“A lot of the time in business we look to the outside to solve our problems,” explained Envision’s CFO Dan McGowan. “At Envision, we’re revisiting everything we do with a fresh set of eyes toward leveraging current tools for maximum performance.”
The result is not mere vanity. In one of seven substantial advances across the CU this year, the accounting department is saving three hours per day because it no longer manually enters data into the general ledger platform. All it took was a few programming tweaks to Microsoft Excel and a new interface to the core system using an existing terminal emulator.
“Just as it’s said that we only use about 10% of our brains, corporate America probably doesn’t even get that much from it’s investment in the Microsoft Office Suite,” McGowan said. “We’ve had Excel as long as it has been offered, and the terminal emulator has been here for years and years.”
This year, the $194-million CU added a few input cells to Excel, enhanced with a little Visual Basic code, and used an Excel macro to automate those cells. Now, accounting can transfer data into the general ledger in one minute, saving about 43 keystrokes per data entry line and saving itself from manual errors.
“It’s not rocket science, and it’s not a big time commitment to develop,” McGowan added. “It’s just being curious enough to do something better.”
Envision was also curious enough to figure out how to produce account analysis tables and graphs using Excel and a newly purchased budgeting and forecasting tool. The CU loads trial balance data into the budgeting tool, which exports the data to Excel for use by macros and control functionality. There, analysts can produce six-year histories, year-over-year comparisons and two-year trend lines for individual accounts or account groupings.
Envision had no precedent for such an analysis, said McGowan.
The first step toward maximizing performance is to closely review processes and procedures at the department level, McGowan said.
“IT managers never look down at the department level,” he said. “That’s where people are groping to do whatever they can do, often with very cumbersome, error-prone processes.”
Some would criticize Envision for sweating the small stuff, but McGowan doesn’t see it that way.
“The cumulative value effect of even small improvements over time shouldn’t be dismissed as inconsequential,” said McGowan. “It all eventually pays off. And we’re open to adding new things to our capital budget as needed.”
In fact, employees get excited about process improvement in general, he said. “After improving the data entry method, my accounting staff got the shot in the arm they needed to explore other processes, too.”
Envision this year also bolstered teller activity reporting, late charge calculations, and charge off and recovery reports, all using primarily existing software and “intellectual capital,” he said.
And Envision eliminated an 85-step manual, monthly process to validate the general ledger against the fixed assets ledger in favor of a four-step process using Excel, the budgeting and forecasting tool and some existing Microsoft development software.
“I would encourage credit unions to recruit technically savvy persons and encourage them to rethink systems and processes,” said McGowan.
CUC Mortgage Corp
Category: Mortgage Servicing
By Lisa Freeman, Managing Editor
LATHAM, N.Y.–Sometimes the ultimate best practice is simply making the most of what you have. At CUC Mortgage Corporation, an affiliate of the New York State CU League, it has made a best practice out of using every single capability and enhancement it can eke out of its mortgage loan servicing system.
Working with Dallas-based FICS, CUCMC provides mortgage loan servicing to about 200 credit unions. By implementing the latest enhancement–FICS’ eStatus, an online interface where members can access mortgage account information–CUCMC has been able to save time and space for its credit unions and their members.
“We hear back from credit union members who are happy because they don’t have to wait for the mail anymore,” said Krista Currie, mortgage servicing manager at CUCMC. “It cuts down on the calls with questions, it redueces the time answering questions. The bottom line is it allows us to provide better member service.”
Since September 2006, CUCMC has seen a 43.5% increase in the number of people registering for online access and an 87% increase in the number of mortgage payments made online.
Then in 2007, CUCMC implemented FICS’ imaging system, Radstar to electronically store all reports and documents. Used in conjunction with eStatus, the league affiliate can now send e-mail notifications to let borrowers know that their monthly statements and escrow analysis reports are available online.
“We have eliminated paper filing,” Currie explained. “Before, we couldn’t store documents and have easy access to them for as long because we simpky didn’t have the space. So, once a billing statement was created, it was gone. Now we can have those saved for about three or four months, so when a member has questions about something, we can pull it up easily.”
CUCMC has been able to decrease the need to request paper files from its offsite storage facility and have saved two thirds of the time it used to take to print and file daily and monthly reports. “The savings of time and labor expenses, printing, paper and storage space costs all contribute to a higher level of customer service to our borrowers and to the increase in revenues of CUCMC,” Currie noted. “This surpassed our expectations. It’s been more popular than we thought it would.”
Susan Graham, vice president of operations at FICS, said CUCMC’s rapid implementation of enhancements to the loan-servicing system is the best way to make the most of any vendor-provided service. “CUCMC is very organized, very efficient,” she said. “Credit unions are really striving to use online access, even moreso that banks and mortgage companies, and this is a good example of that.”
The two keys to success, Graham suggested, are making sure to get multiple employees fully trained on a given system so that when there is turnover that knowledge isn’t lost, and really digging in with the vendor to make sure a system’s functionality is being used to its fullest.
“Contact your vendor to see what services they provide,” she advised. “If you can communicate what it is you are trying to accomplish to your vendor, they should be able to figure out if there’s something in the system that can be adapted to that purpose or if that capability is already there. That’s what CUC Mortgage does.”
Patelco CU
Category: Compliance
By Michael Bartlett, Reporter
SAN FRANCISCO–The regulatory compliance required by mortgages–not to mention the volumes of paperwork–is enough to put off many potential lenders.
But Patelco Credit Union, which found out the hard way the kind of complications that can arise, has found a way to automate a major portion of the compliance reporting procedure, saving time and money.
The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and is implemented by the Federal Reserve Board’s Regulation C. As part of Regulation C, HMDA requires lenders to provide annual reports to the public regarding the types of applications, and the actions taken on those applications.
The $4.2-billion Patelco CU underwrites thousands of mortgages for its members each year. Prior to implementing software to automate HMDA submissions, Patelco compiled and filed its annual HMDA report by hand. Just how big a drawback the manual filing could be was made all too clear in 2005, when a change in required HMDA formatting caused more than 5,000 of Patelco’s submissions to be rejected.
Mat Stanfield, senior lending systems analyst at Patelco, told the Credit Union Journal the errors were a surprise, as Patelco had not been informed of the formatting changes.
Shortly after, management began looking for software to better handle HMDA submissions, and approached Laguna Hills, Calif.-based QuestSoft, which had a “phenomenal” product at a reasonable price, according to Stanfield.
Patelco implemented QuestSoft’s “HMDA Relief” in June 2006. Stanfield said it automates “as much of the process as can be automated. It takes a very manual process and allows us to automate it to the fullest extent.”
For its 2006 HDMA submission, Patelco used QuestSoft’s program to scan all loan records for potential errors, allowing one person to make batch edits and analyze the data to ensure complete compliance. A full-time HMDA staff person was reassigned to other duties, and Stanfield completed the filing himself thanks to the efficiencies gained.
“With a few clicks of the mouse, I can import all of our mortgage data from our loan origination system into the program,” said Stanfield. “It handles all of the geocoding automatically, presents me with possible errors, and when completed, I can submit directly to the regulators.”
Patelco has not yet calculated an exact ROI for the new software and procedure, but Stanfield said shifting a person who spent the majority of his time on HMDA compliance to managing other duties is an obvious benefit. Other cost savings were realized by reduced staff time on every loan filed, he said. “We don’t have a person doing manual entries and double-checking prior to submission.”
Implementation of the HDMA relief solution took less than 30 days. Stanfield said training was straightforward as the software is “very intuitive and wizard-driven.” He said the cost to Patelco is $4,000 per year, including software and geocoding, plus customer service.
FirstMark CU
Category: Standardization
By Joyce Moed, Reporter
SAN ANTONIO, Texas–FirstMark Credit Union here is crediting the creation of a “Branch Operations Analyst” position for helping to streamline and create efficiencies within its branch network.
Specifically, the credit union describes the job function as a “standardization program at the branch level aimed at reducing variations in processes, which ultimately impact efficiency, consistency, quality, service, member loyalty, and profitability.” FirstMark serves its 92,000 members with eight branches in a very competitive credit union market.
“The position was created to help standardization in our office,” said the person named to fill the new position, Jennifer Alonzo. “It really helped us a lot. I really would suggest this to other credit unions. It helped us maintain consistency. It also helped us to attend to member’s needs.”
FirstMark established as the goals of the branch operations analyst to coordinate and create standardization across and within branches. The “BOA” also works with key frontline personnel and branch managers in analyzing and assessing whether current processes meet established member-service and quality standards, while complying with applicable regulations.
According to the $665-million FirstMark, responsibilities of the position include: observing and identifying all current processes at each branch; establishing meaningful metrics to monitor branch processes and identifying the nature and causes of variances, errors, policies, and monetary losses; developing new and reviewing current processes to insure regulatory compliance; analyzing business or operating procedures to devise more efficient methods of accomplishing work; performing systematic and continual operational-effectiveness reviews to ensure standardization across all branches; ensuring branches are operating in a consistent and compliant manner with minimal variation in processes or services between each location; documenting and presenting findings and conclusions for new or modifications to existing processes; increasing employee engagement and helping to foster a continuous improvement environment by actively encouraging frontline staff to share ideas or input on best practices, successes and challenges; and facilitating implementation of new processes and procedures through staff meetings, written communication and other appropriate documentation.
The Branch Operations Analyst position appears to be showing positive ROI. Since the job was created, the percentage of accounts with no errors at opening has risen to 96% as of June of this year, up from 62% one year earlier.
Meanwhile, the credit union reports the new BOA has also contributed to internal morale. Using a scale of 1-75 (with 75 being most highly rated) as part of its New Hire Indoctrination Process, new employees are surveyed for their perception of the job FirstMark did in welcoming them.
When the process began, new hires gave the credit union an average rating of 29.02. In the most recent survey, that score rose to 51.71. Additionally, since the introduction of senior teller audits, there have been three perfect audits from the CU’s external auditors.
Shiloh of Alexandria FCU
Category: Mortgages
By Joyce Moed, Reporter
ALEXANDRIA, Va.–One tiny credit union has a big dream for its membership: home ownership.
With approximately $1.2 million in assets and an all-volunteer leadership team, Shiloh of Alexandria FCU is trying to bring the American Dream of home ownership to its members, many of whom are low-income and underserved. As such, Shiloh’s members frequently need more than just a mortgage–they need help preparing both financially and emotionally for the entire process of buying and financing a home.
Led by the CU’s founder, John DuPree Sr., the credit union volunteers try to guide the member in many aspects–from repairing their credit to applying for grants/down payment assistance, and finding the right home to buy.
The members of Shiloh of Alexandria FCU are typically not affluent, nor are they given the lowest financing rates available. Many of its 830 members are single parents with limited income. But over the course of a little more than a year, Shiloh has provided mortgages to its members in an amount roughly equivalent to its asset size. These loans, the credit union said, were largely complicated deals, involving Fannie Mae’s most flexible products, silent second liens, grant money and in some cases, Section 8 Housing income.
A typical loan at Shiloh of Alexandria FCU starts with a heartfelt conversation between the member and Credit Union President John DuPree Jr., at which time they discuss the member’s current financial situation, their dreams for the future, and what steps need to be taken to get there. The credit union will work with the member through financial counseling, budgeting and perhaps some loans to repair credit, save money and get into a position to be able to support a mortgage. Once the member is deemed ready to buy, the credit union helps to get them approved for a mortgage.
An appropriate property is located and the financing needs are assessed. DuPree Jr., will then work with local and federal agencies to acquire down-payment assistance for the member, as well as pledge funds that the credit union itself has reserved to help its members with closing costs. When the deal finally settles, the credit union will keep up with the member and help them to get their home in shape with donated items and even some hands on home repairs.
This whole process could take a couple of years, but the credit union sees the time as an investment in the life of a member, in their community and in their mutual future.
Montgomery County Teachers FCU
Category: Online Bill Pay
By Lisa Freeman, Managing Editor
ROCKVILLE, Md.–The best salesman is one who is sold on the product himself, so Montgomery County Teachers FCU started out selling its online bill payment product to its staff first.
“A promotion is only as good as the support of the staff,” said Kristi Mathey, director of marketing for the $440-milllion credit union. “You have to believe in it and use it if you’re going to sell it. Training is important, but a one-time training session isn’t enough. If they learn to use it themselves and see how easy it is, they are much more likely to be enthusiastic–and successful–about showing it to members.”
To that end, MCTFCU held a drawing for its employees in which employees were automatically entered every time they paid a bill using the credit union’s online bill payment service.
Prizes included two tickets for dinner on the Spirit of Washington dinner cruise ship, two tickets to a Nationals baseball game and two tickets to the movies plus refreshments.
MCTFCU has a regular e-mail communiqué to employees called “The Buzz” and used that to not only tell staff about the promotion but also to show employees the tracking data on how many people were using the bill pay product. Just as Mathey and the rest of the management team had hoped, once the employees were comfortable using the system themselves, they were more than ready to help members learn how to use it, as well.
“We kept hearing how easy it was to use the new version,” Mathey related. “We had bill pay before, but the new version we launched with PSCU Financial Services puts all of the information you need on one screen, which just makes it so much easier to use.”
The biggest hurdle, of course, is getting members to do the front-end work of registering the payees. The only way around that, Mathey said, is to actually show members how easy it is to do even that. “You have to show them. We tell them ‘bring in a bill, and we’ll get you all set up.’ Once they see how easy it was to get that one bill set up, they’re much more likely to go home and set up the rest of them.”
There was a special drawing for members, as well. Drawing winners received $1,000 in credits toward bills paid online in August. Most of the marketing was done via e-mail, and members were also invited to view a professional, contemporary online video promoting the program’s ease of use that was furnished by PSCU for use on credit union web sites. The video’s link to register for the service generated impressive results in the first 45 days, with 595 new subscribers earned out of 1,905 hits–a conversion rate of 31%.
The result: MCTFCU increased the number of bill payment subscribers among its employees by 125%, in turn boosting the number of member subscribers by 24% in just 45 days.
It’s all part of an overall change in MCTFCU’s approach to technology-based products and services. “We used to have a very reactive stance in the past. We’d wait to see how a given technology was working out somewhere else before implementing it here,” Mathey explained. “Now we want to be more proactive. We’ve created an e-products manager position to really help us focus on this.
“I have just realized employees aren’t as familiar with our online banking product as we’d like. It wasn’t part of the new employee orientation,” she continued. “So I think that’s what I want us to focus on next as part of our new emphasis on e-services.”
Desert Schools Financial Services
Category: Employee Education
By Michael Bartlett, Reporter
PHOENIX–A two-year, dedicated effort to employee financial education has helped one of Desert Schools Federal Credit Union’s CUSOs triple its referrals and profits.
Becky Nilsen, CEO of Desert Schools Financial Services, told the Credit Union Journal she heard a presentation on financial education at a NACUSO conference three years ago that made her realize the importance of the topic.
“About the same time, JoAnn Johnson of NCUA had challenged credit unions to educate their members,” Nilsen recalled. “Employees care about member service, and want members to have a good experience but I know employees will not recommend a financial product they don’t understand. Education is key.”
Soon after, Desert Schools Financial Services purchased educational CDs and began training its employees on basic investment topics. Eventually, DSFS enrolled its staff in Educated Investor University, which is published by Precision Information.
The Educated Investor program is an online university which offers up to 18 hours of personal finance content, from which CU employees can learn more about personal finance topics. DSFS employees who complete all 18 courses receive a Personal Finance Certificate and go through a cap-and-gown ceremony with personal recognition from senior management.
Nilsen said completion of the certificates is entered into employees’ work files and considered when they are evaluated for potential pay raises and/or promotions.
The problem’s roots, Nilsen asserted, are in the fact financial education is not taught in schools. She said the vast majority of Americans do not understand financial terms and concepts. Nilsen cited a survey by the Securities Industry Association, which found more than 67% of people feel they do not know enough to make a sound financial decision. More importantly, 84% want their financial service provider to do more to help educate them.
By educating its employees, Desert Schools has given them the confidence needed to provide referrals, Nilsen continued. This, in turn, has led to bottom line growth.
As of the end of 2006, more than 800 Desert Schools employees had completed one or more online courses, and more than 120 had earned a Personal Finance Certificate. Nilsen said the enterprise-wide employee education program was complemented with sales incentives to help staffers understand how to apply this new-found knowledge to better serve members.
As employees have become armed with the confidence necessary to provide referrals on topics covered in the courses, in two years (2004 to 2006) DSFS has seen 317% growth in the number of referrals (to 9,500 from 3,000), 275% growth in revenue (to $55 million from $20 million), and 333% growth in profits (to $3 million from $900,000).
“It really has been a journey for us,” said Nilsen. “From inserting a CD into a drive to having an online program that is automated and interactive, where results are tracked. The statistics in referrals and business show the value of the program.
“I would recommend Educated Investor University to any credit union,” she continued. “I really believe if employees are not knowledgeable in making a referral, it just won’t happen. Making them educated helps members and the employees.”
Nilsen said Desert Schools pays an annual licensing fee to Precision Information to use the course content. The cost depends on the size of the organization and how many employees are taking tests.
“Next year, we will launch a three-tiered approach to learning for members. It will go beyond investing: it will have first-time home buying information and a money coach to help them set up a plan,” she said.
Desert Schools FCU is a $3 billion credit union serving 344,000 members and 1,700 SEGs from 59 branch locations with 1,100 employees.
