SEATTLE -
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.
FOR MORE INFORMATION
www.veritycu.com
www.opensolutions.com
