DUBLIN, Ohio -
That's what happened when Ohio Healthcare FCU launched Harland Financial Solution's Privilege Pay program. The previously "land-locked" credit union had office space inside two of the hospitals it served, but the $30-millilion credit union was able to use revenue from the new program to build its first standalone main office.
"We had been looking at [courtesy pay programs] for a while, and we knew Harland was developing a product of its own, so we waited for it," OHFCU CEO Bill Butler said. "As soon as they rolled it out, we jumped on it. The fact that it was part of the core system was key. It meant we didn't have to go to a third-party provider that would take chunk of the revenue."
That waiting period also served to help the credit union learn more about courtesy pay and follow the debate in the industry about how the program should work.
"The NCUA letter on [courtesy pay] came out just as we were getting ready to launch," Butler related. "So that allowed us to make sure we were able to follow the letter to the letter."
But the credit union was glad it didn't have to wait much longer than it did. "The banks all around us had been delivering this product for the last 10 years, and it was being used by consumers generally long before we started offering it," he explained. "We felt it would be of value to our members and also a revenue generator for the credit union, too."
Deriving value for the membership was an important aspect of launching the program. "I had one member whose husband had expired, and there was a period after his death when she couldn't pay her bills. She actually thanked me for this product because it allowed her the time to get everything together and get back on track."
And the value to the financial institution has been huge. The 7,000-square-foot office with two drive-up lanes and an ATM drive-up lane is allowing the credit union to delve into the Trade Industry Profession (TIP) field of membership the credit union was granted. With the new office serving as the credit union's headquarters and a new Trade Industry Profession Field of Membership, the potential number of members has increased from 15,000 to 100,000. Butler said, "We can now serve all healthcare workers in central Ohio. Privilege Pay is enabling us to successfully serve the new potential members. From 2001 to May 2006, our net new member growth was zero. Now we net at least 40 new members each month."
Based on the projected revenue from Privilege Pay, the credit union plans to enhance its member service and marketing efforts and invest in additional staff training.
The module cost approximately $5,000 and the credit union pays a monthly fee of $.05 per member. In 2004 the credit union's fee income was approximately $712,000. At year-end 2005, fee income totaled more than $1.2 million. Fee income for 2006 was nearly $1.4 million due primarily to Privilege Pay.
FOR MORE INFORMATION
www.ohiohealthcarefcu.com
www.harlandfinancialsolutions.com
