COLORADO SPRINGS, Colo.-With government rebate programs driving consumers to seek out "greener" cars and appliances and put some "green" back into their wallets, credit unions have been stepping up to offer a variety of green lending discounts and initiatives.
In January Ent FCU here started a program called "Energy Smart" that offers rate cuts for members looking to borrow money for green home improvements. Energy Star-rated appliances, xeriscaping, insulation and window treatments geared towards reducing energy consumption all qualify for the .25% HELOC and 1% unsecured rate reductions.
"We've funded about $155,000 in 15 loans in the first quarter," said lending center manager Darryl Noble. "We expected it to start quite slowly because it was winter, so going into the spring we're going to market it heavily and hope to see a lift in spring and summer."
In an environmentally conscious city where the mountain bikes often are worth more than the cars they're strapped on to, the credit union is confident that its promotion will catch on as the weather warms. Federal tax credits for green improvements will likely goose demand as well. Ent is also offering discounts on hybrids and other very fuel-efficient vehicles, cutting the auto loan rate by one quarter of a percent.
US FCU, Bursville, Minn., has offered a similar lending product since oil spiked to its peak in the summer of 2008. The 85-year old institution knocks off 25 basis points from its auto rates for any vehicle with a combined EPA estimate of 25 mpg. Along with thte discount, the credit union has also held a number of "fuel for thought" educational seminars at branches that focused on how to make budget friendly and environmentally conscious decisions when it comes to cars.
"It was one thing for us to have the promotion, but we thought that we needed to educate our members on ways to decrease costs and increase fuel efficiency," said SVP/COO Bob Stowell.
The sessions included helpful times on insurance discounts and saving both fuel and money by keeping tires properly inflated and vehicles well maintained. Though Stowell was unable to extrapolate hard numbers to show how the program has affected lending volume, he noted that both employee and member feedback indicated that it has had a positive effect and is still generating interest nearly two years after it began.
