Loan Promo Helps Members Save $250K; Goal Is A Cool $1 Million
BROOKLINE, Mass.-Medical Area Federal Credit Union (MAFCU) here has saved members more than a quarter-million dollars since kicking off its "Sit and Save" loan promotion, and has a goal of saving members $1 million.
"We wanted a broad-brush initiative for 2011 to go out and save money for our members, both individually and collectively," said Sarita Ledani, VP of Business Development/Marketing.
Nicole James, CEO at the 10,000-member, $71-million CU, said that "while Sit and Save is a strategic focus in 2011, our ongoing strategy is to make our members financially successful."
Ledani explained that "the basic premise is that we want members to sit down for 25 minutes, give us an opportunity to review their credit, what's going on, where they have loans and how we can save them money."
To date, 147 members have utilized Sit and Save, for a total of $285,420.77. At the end of Q2, MAFCU listed more than 5,000 loans and leases totaling just under $51 million.
VP of Lending Mike Shuman noted that "the credit crisis was actually a benefit to us. The big banks were lending to everyone and anyone, and then they stopped, and it created an opportunity for us to provide loans to good, credit-worthy borrowers, so we've actually grown our portfolio."
Lending has increased 5-7% year over year for the past few years, he added.
For members who are able to sit but whom MAFCU cannot save money due to an already low loan rate, for instance, the credit union will deposit $25 in the member's savings account (a minimum 600 credit score is required for the deposit). Additionally, the CU is offering financial counseling with Money Management International.
Shuman said the credit union did not reduce its loan rates to coincide with the Sit and Save promotion, as MAFCU believes its rates are priced at the bottom of its market. The credit union uses risk-based pricing in setting rates on auto and personal loans; the promotion is not open to any member who is seeking to refinance a MAFCU loan. No one loan product has seen more interest than another, he added.
MAFCU plans to run Sit and Save through the end of 2011.
"We're going to it $1 million," asserted Shuman. "We've only done this for a couple months and we've already done 28% of our goal."
Ledani stressed that while Sit and Save is a special initiative, the savings associated with it are par-for-the-course at the credit union. "This is taking what we do every day at MAFCU and packaging it as a collective goal for the year," said Ledani.