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Some credit union executives see their opportunity to serve underserved markets as a return to the movement's roots. In at least one case, that return was physical as well as philosophical.

Qualtrust Federal Credit Union wasn't always located in the Dallas suburb of Irving, Tex., and it wasn't always called Qualtrust. When the credit union was founded in 1948, it was known as General Telco Federal Credit Union, chartered to serve employees of General Telephone Co., in San Angelo, a community four hours west of its current home office.

When the National Credit Union Administration in 2001 identified parts of San Angelo as underserved, the agency was seeking a credit union that knew the area well enough to take on a largely Hispanic population segment that had no other way of qualifying for credit union service.

Qualtrust, known as General Technologies Federal until March 20, 2003, was the only credit union to apply, said Robyn Pratt, the credit union's vice president of marketing.

Following Its Sponsor

The credit union had moved to Irving in the late 1980s when it's sponsor company relocated. General Telephone had become General Technologies and is now known as Verizon. Despite increasing growth and sophistication of both the sponsor company and the institution, the $140-million credit union still maintained a San Angelo presence, said Pratt. The opportunity to serve its former home in an even more extensive capacity was an opportunity Qualtrust was happy to jump at, she said.

There were challenges, Pratt said. In addition to its distance from Irving, San Angelo is home to a large Spanish-speaking population. The credit union presence gave it a natural advantage and bilingual employees made the transition to a larger member base relatively easy.

The credit union does not have Spanish language marketing materials, but that hasn't been a drawback, she said. In fact, Qualtrust's efforts have been impressive, enough so that NCUA expanded the credit union's underserved charter to include 12 more census tracts encompassing all of Tom Green County, where San Angelo is located, said Pratt.

In addition, NCUA approved service for two underserved areas in Irving. One is located in the immediate vicinity of the credit union's headquarters, an area characterized mostly by office buildings and businesses with several low-income apartment complexes near by.

The other is a very small part of Irving 10 minutes south of Qualtrust's headquarters in a blue-collar, mixed racial area.

'Underserved' Can Differ

The underserved in Irving couldn't be more different from San Angelo in the marketing approaches each required, Pratt said. Whereas San Angelo was clearly a community in which the credit union already had a stake and whom it could reach through newspaper ads and billboards, the areas in Irving lacked cohesiveness at that level.

No amount of credit union effort could make it the same type of community, she said.

Qualtrust instead took a select-employee-group approach to the area immediately around its headquarters. It was an area of employers to begin with, so offering different credit union services to different

SEGs made sense. The approach also allowed the neighboring firms the opportunity of offering employees a cost-free benefit with a branch conveniently located near their jobs. Working with the firms to distribute flyers and marketing materials and making SEG presentations was about as extensive as Qualtrust's marketing efforts got, Pratt said.

The second area in Irving was more challenging. It, too, had major employers, the largest of which was the DFW Humane Society, but it was comprised primarily of working class neighborhoods. However, the area crossed several zip codes, making mailings difficult to distribute to those who qualified for credit union service, said Pratt.

Settling On An Approach

After some deliberation, Qualtrust ended up employing the same SEG approach it had in the other area of Irving that it served. The approach has been successful thus far, and even though it doesn't reach all area residents, it offers a good start in a neighborhood where services are needed, Pratt said.

"Our goal is to deliver quality financial services to consumers at all income levels," said Pratt.

How they have learned to do that depends to a great deal on the nature of the area and the cohesiveness of its "community," however it may be defined, she said.

All efforts have been successful to date, especially the area in Irving adjacent to Qualtrust's headquarters, said Pratt.

"There was simply nobody here and we've just seen membership keep growing in this area," she said.

In fact, underserved areas overall have contributed significantly to the credit union's 26,000-member base since service began during the second quarter of 2002, said Pratt.

That growth includes the following:

* In 2002, 8.6% of the credit union's new members were from the underserved areas of Irving and San Angelo.

* In 2003, that number climbed to 16.8% for the combined areas. In San Angelo, specifically, 32% of new members came from underserved areas.

Not A Profit Center

Since residents of underserved areas largely have incomes below the federal poverty line, Pratt admits these may not always be the most lucrative members when it comes to using credit union services. But Qualtrust does see them as among its most important members, she said.

"These underserved areas are not a profit center for the credit union, but have the needs of folks who otherwise wouldn't have access to credit union services," Pratt said.

In the same way the return to San Angelo offered Qualtrust the opportunity to get back to its roots, serving underserved areas allowed the credit union to return once again to its original purpose of serving members in need, said Pratt.

"Sometimes it's easy to lose sight of need, and our service profile works well in helping underserved markets," Pratt said.

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