OGDEN, Utah — The management philosophy of "doing everything that is best for the members" is not unusual within credit unions.
Yet Weber State CU reports it has used that simple formula to fashion notable success in this city that calls itself the hub of northern Utah.
Callahan & Associates named Weber State No. 5 in its Total Return of the Member category for Q4 2008, and No. 2 for Return to the Borrower, in the $50 million to $100 million asset class. The CU serves the university of the same name, which has 18,000 students on campus, the broader university community and multiple SEGs.
CEO Vickie van der Have said the 9,000-member CU has grown to $86-million in assets thanks to a high share of wallet, despite competing with $5-billion America First CU in the same market.
"We have great name recognition, and are very involved in community projects and participate in many causes and scholarships," she said.
Van der Have cited the CU's tagline, "Rewarding Membership," is something everyone at the CU takes very seriously. "Every product we implement is based on what is best for the member. We are well below our peers on fee income, meaning we rely very heavily on being 100% loaned out-which we are very good at," she declared.
In addition, WSCU is "very diligent" on expense control. "That is where we make up not charging high fees so we can return to members in the form of lower loan rates and higher rates on dividends. That puts pressure on spreads, but we become efficient in other ways in our operation."
When pressed for specific expenses the CU has shaved, van der Have responded, "it is difficult to give examples as it is just a broad attitude we have." She pointed to figures provided by Raddon Financial Group indicating the CU's expense ratio is 3.19% during the first quarter of 2009, ahead of the peer group average of 4.42%.
Van der Have emphasized the importance of being able to tell members that not only is it safe and sound and has strong capital, but the credit union is rewarding them for their loyalty.
"That is what credit unions do," she assessed.
Gaining Efficiencies
Weber State has a "frugal attitude" in everything it does, van der Have reported, noting all purchases and expenses get scrutinized, and management often searches for a less-expensive options.
"A wise mentor of mine once said, 'Treat the members' funds as if the money were your own. Then how would you approach spending?' That helps find the best decisions, and that is how we are able to return more to the member-by keeping expenses down," she said.
WSCU has high penetration rates among members in debit cards, checking accounts, mortgage loans and credit cards. Van der Have said Raddon recently reported 77% of the credit union's transactions are debit cards.
"Our membership has really embraced debit card technology, and that, along with our rewards checking, are products our members really like. Members earn rewards for debit card usage. It gives us interchange income, but it also means there is a checking account behind it. Nearly 60% of our members have a checking account, which is very high for the industry. Many of our members consider us their primary financial institution."
WSCU uses the Scorecard rewards program from Fidelity, which is also its debit and credit card processor. That program allows members to combine debit and credit transactions when redeeming points. The CU issues a debit card at the time a checking account is opened, and averages 17.1 debit transactions per month per member household.
WSCU touts its Callahan's rankings in marketing pieces, she said. But the strongest marketing tool is its members. "They try a product or service, love it, and tell their family and friends."
"We do a lot of things very well, very efficient, and we are not afraid of technology. But most importantly, we reward our membership - which is our mantra," she said.
