CHARLOTTE, N.C. -
Serving mainly postal and federal workers who obviously have steady paychecks, the $62-million Carolina Postal was seeking a way to make Fridays go smoother for members and employees. By Friday of each week, bills that have finally come due or mail that has accumulated all week needs to be delivered. As letter carriers also work on Saturdays, they can't run errands the next day as many people can, and that includes visiting a financial institution branch.
Consequently when payday Fridays hit, even CPCU's extended hours until 6:00 p.m. weren't helping all its members, nor were they satisfied with the other service options, including online banking and ATMs.
"Friday is the most busy and stressful time of the day. A lot of times at 10 'til six (p.m.) they call saying 'Please stay open, I've got to take care of something'," explained VP of Marketing Deb McLean.
McLean noted that many of its members employed by the Postal Service and government have direct deposit and know exactly when they'll get paid, with some members even knowing the date the funds are deposited in the automated clearing house (ACH) prior to disbursement.
"We could see it in the ACH warehouse Wednesday morning," she said.
McLean said CPCU staff had learned of a California credit union that had started posting ACH direct deposit funds early for selected members and charging a fee for the service. McLean said Carolina Postal was finally driven to act after a consultant whom it had retained recommended pursing the strategy as a means of driving growth in share draft accounts. "Trying to capture a checking account is getting more and more challenging," she said.
The result: Carolina Postal introduced its membership to a service it dubbed "Priority Payday," allowing word-of-mouth to help spread the word. Enabling the launch of the product was a move to a new core processing solution from Symitar Systems, San Diego, that is capable of posting individual payments.
For Carolina Postal, the debut of Priority Payday is also aimed at countering the growth of payday lenders in the area. "It's not a loan. We know it's coming in, everyone can see it. We're just posting early," she said. "It didn't cost us anything."
She added that the credit union's primary sponsor has also been very pleased with the addition of the service.
McLean said when she's discussed Priority Payday with other credit union officials some have asked if the product is, in fact, a loan that needs to be treated that way. Others have wondered whether Carolina Postal is encouraging poor financial management habits in members.
McLean countered that her credit union is in a good position to offer the service, as the federal government is going to routinely deposit the funds and the credit union can rely on that to offer the funds early. Moreover, she said, any of its 9,500 members who is going to pull a fast one with their checking accounts won't be encouraged or discouraged by getting early access to their paychecks.
"If they're going to bounce a check, they're going to do it anyway," she insisted.
In the first month of Priority Payday, Carolina Postal CU increased its core deposits by $1.1 million and added both new members and new checking accounts. "It's no longer frantic Friday. The members love it. It took a few weeks to get used to it and believe it," she said. "People are asking 'What's the catch?' "
FOR MORE INFORMATION
www.cpcuonline.com
www.symitar.com
