SANTA ROSA, Calif.-Despite the big challenges facing credit unions, particularly those in housing bust markets like California, there is a real opportunity to hammer home the trust factor while building real loyalty, according to Brett Martinez, CEO of Redwood Credit Union.
"In the May/June time frame, we began a comprehensive campaign to encourage our members to contact us early and often regarding their financial concerns with the message, 'We're listening. Let us help,'" Martinez told Credit Union Journal. "This message was included in a variety of touch points for our members, including our newsletter, a Financial Assistance Center on our website, in-branch posters, nametag ribbons worn by staff (encouraging members to engage us if they have concerns), on hold, teller receipt and statement messages, financial assistance packages in our branches, etc."
Redwood also prioritized educating and training its staff to better help members. "All of our staff attended training on the free and confidential services we offer to members through our partners at BALANCE Financial Fitness, and we have hosted a variety of free seminars for members and our communities on topics including 'foreclosure prevention' and 'digging out of debt,'" Martinez said. "This...has educated our staff about the many tools and resources available to members, raised awareness about early warning signs/opened the door for conversations with our members, and has had a positive impact overall."
The fact is, Martinez explained, it is difficult times like these that give credit unions the best opportunity to shine, noting that right now, running a credit union is "challenging and yet full of opportunity to assist our members and communities when they need us the most. It's also a key time to share the credit union difference.
"The current economic environment is certainly challenging and there is a lot of member/ consumer confusion and fear. These factors have an impact on all financial institutions- but if there ever was a time for credit unions to unite and be seen and heard, it is now."
To that end, Redwood is working with its members to address financial concerns on a case-by-case basis. "All year we have encouraged members to contact us early and often if they are beginning to experience financial stress, because the earlier their issues are addressed, the more options there are available to them," Martinez suggested. "We also continue to remind them how important it is to always do business with those they know and trust-and if something looks too good to be true, it probably is."
But the challenges aren't simply the troubled housing and financial market-it's also the lack of understanding about what is happening, he added.
"There is a lot of negative and even some inaccurate information being shared by the media and also a lack of understanding/education about financial issues by many consumers, so one challenge is educating and informing Members and our communities about the facts and what some of the economic and financial news means to them," Martinez offered. "We need to calm members' fears where we can and educate and provide resources so they can make the best decision for their individual situations."
Recognizing those fears, Redwood has made a point of emphasizing the need to do business with people and organizations members know and trust.
"There are a growing number of organizations promoting a 'quick fix' to financial concerns, but in most cases, these organizations do not have consumers' best interests or long-term needs in mind," Martinez said.
But not all of the challenges are about the member-there are internal, organizational issues to be dealt with, as well. "Another challenge includes managing an organization that is not used to having loan losses and looking for additional sources of income to offset those losses," Martinez related. "I also continue to be concerned about rising unemployment and divorce rates that affects consumers' ability to borrow and repay debt-and in general the bankruptcy laws and many consumers' willingness to walk away from their homes, vehicles and debt is challenging. Our communications remains focused on why to choose Redwood Credit Union; we do not comment on other financial institutions' situations."
