How (And Why) One CU Manages 2,400 Employee Groups

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A typical day for James Haid consists of contacting eight to 10 select employee groups (SEGs), putting on presentations for new employees at some of the bigger company SEGs, and making phone calls to small companies.

Haid has to maintain this frenetic pace just to keep up, because the business development manager for Hawaii USA Federal Credit Union oversees a staggering 2,400-plus SEGs.

"We have companies from 1,200 people down to one person," Haid told The Credit Union Journal. "And whether they have one person or 1,000, we want to give them value."

Hawaii USA FCU was founded in 1936- when the Hawaiian Islands were still a U.S. Territory-as one of three credit unions designated for the educational community. Known as Oahu Teachers CU No. 3, it served elementary schools, which at the time was the smallest field of membership of the three. In the 1970s, it changed its name to Oahu Educational Employees FCU and began to pursue SEGs.

Scott Kaulukukui, the credit union's senior vice president of the communication group, which includes marketing and business development, said a name with "Oahu" and "Teachers" in the title made attracting new SEGs a challenge, and in July 2000 it changed again to Hawaii USA FCU.

"This really helped us in our SEG development," he recalled. "It gave us opportunities, such as having a branch on Maui, which wouldn't have made sense as Oahu Educational Employees Credit Union."

Remaining Focused On Core

Despite the name change, and the emphasis on bringing in new employee groups, Kaulukukui said the credit union remains focused on education. For example, the CU operates five student-run credit unions at local high schools and has a heavy commitment to financial literacy.

According to Haid, Hawaii USA welcomes eight to 15 new SEGs each week-many through current SEGs.

"They refer us, which helps the SEG groups grow bigger. The island is so small, many people know each other. What people on the mainland call word-of-mouth, we call the coconut wireless," he joked.

Added Kaulukukui: "There are 95 to 100 credit unions in Hawaii. Some are community credit unions in Oahu. So, we do run into companies that already have a credit union. We feel that is great. We take a very low-key approach with them. We don't try to compete directly, we just offer an option."

Both Haid and Kaulukukui said the Aloha State's credit unions have an unusually good relationship with local banks-"Contrary to Utah," noted Kaulukukui. Hawaii USA FCU's members can use the Bank of Hawaii's ATMs without service charge. The bank charges the CU, but Hawaii USA absorbs it as a cost of increasing access.

Hawaii USA has the largest membership base among CUs in Hawaii-100,000. Thanks in no small part to its focus on bringing in new SEGs, it is adding 1,000 new members per month.

"We have an 8% to 9% membership growth rate per year, compared to the national average which is a little over 1%," said Kaulukukui. "The SEGs have helped us get younger in our membership. This will help sustain the credit union for another 70 years."

Broad Reach

Haid is one of just four business development officers at Hawaii USA-one for the schools, three for SEGs. He said the branch managers assist with SEG development. Someone is doing something right, because the SEGs, and the members, keep rolling in.

Included in the list of companies whose employees can join the CU are Home Depot, Costco, Sam's Club and Best Buy.

"So many groups are eligible, the challenge is to let every employee know they are eligible to join," he said.

Kaulukukui said the credit union also has tapped associational groups, including condominium associations, property management groups and teacher associations. "We even do cosmetic dentists. It can cost $7,000 to get cosmetic dentistry work done. If someone is eligible to join, we finance the cost with a personal loan."

"We have a running joke with NCUA Region V that we keep them employed," Kaulukukui added. "We regularly use the Internet-based SEG application, which helps us a lot. It really streamlines the procedure."

Community Charter?

So with all these groups, why not just convert to a community charter? According to Kaulukukui, such a move would actually diminish the credit union's reach due to Hawaii's unique geography.

"There are no statewide charters here," he explained. "The way the islands are situated, if we had a community charter, we could only serve Oahu. We couldn't have a branch on Maui."

This is particularly important as technology continues to bring access to more areas, he continued.

Hawaii USA FCU only has branches on two islands, but members who move to other islands-or the mainland, or other countries-still can remain active.

"The Internet and electronic delivery have changed things," he said. "Some of our members are in Japan, others are soldiers in Iraq. We are able to service them wherever they are and give them access to their accounts." (c) 2005 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.

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