SEATTLE-Express CU is driving new memberships by deploying four "community member service representatives" to sixteen local non-profit organizations.
The outreach effort is working for the $10.2-million credit union, as roughly half of its new members each month sign up with the CMSRs. Dave Sieminski, managing director of Express Advantage, a separate organization from Express CU but one that has an interlocking board and a joint mission with the credit union, said the percentage of new members the CMSRs bring in might be undercounted.
"Many of those who joined at our credit union joined because they heard about it at one of the 16 locations we serve," he explained.
Sieminski told Credit Union Journal approximately six years ago a local foundation was researching why there was a gap in financial services, with so many low-income people were unbanked or underbanked. These folks were going to payday lenders and check-cashing shops, and the foundation wanted to find out why.
The research identified factors that were obvious and some not so obvious, Sieminski continued. From the perspective of a bank, these were not very profitable customers-they were savers, not borrowers, and maintained low balances. On the consumer side, many reported bad experiences with institutions, or they came from other countries where people were wary of banks.
"The decision was this gap is real and will not be closed easily, and a plan was made to start a new financial institution," he recalled. "About that time, Express Credit Union-which had been in the community since the mid-1930s-when it was chartered to serve transportation employees, wanted to expand its services to low-income residents in our area. So the two combined enterprises."
In 2008 came the idea of remote staff that would go to social services agencies to introduce people to the concept of a credit union. Originally they were just going to be outreach workers, Sieminski said, until organizers had an "ah ha" moment that they could be tellers.
"Our CMSRs have laptops and can open accounts in real time," he said. "They can handle any non-cash transaction, including check deposits and taking loan applications."
The CMSRs also provide basic financial education and referrals to formal programs offered through the non-profit partners.
About 90% of Express CU's new membership is low income, which is defined as less than 80% of area median income. Sieminski estimated the credit union's total membership is approximately 70% low income, but figuring the exact percentage is challenging, as it does not have legacy numbers.
"We did not previously ask members about their income because we were not promoting ourselves as a low-income credit union."
One of the expected hurdles in launching the CMSR program was getting the social service agencies to house them, as most do not have commercial enterprises within their offices. But because Express CU is not-for-profit and it was going to help the people served by the agencies, they were "excited" and "appreciative" to have the credit union representatives there.
"We anticipated that a not-very-profitable membership base taking low-dollar, short-term loans meant we needed to do due diligence," Sieminski said. "Express Advantage subsidizes the salaries and benefits of the CMSRs so the credit union does not have to bear that significant expenditure."
New Idea, Constant Tweaks
Express CU is a Community Development Financial Institution, so it receives some grants from the CDFI Fund, he added. Local credit union giant BECU helped as well-offering advice on infrastructure and some financial assistance. The CMSR program will continue in 2012, Sieminski noted.
"This is a relatively new idea so we are constantly tweaking it to do it better, such as adding sites at a community college and a work center. We are shifting around to find the best locations to help serve people. We want to be in the places where people we believe are in our mission to serve are participating in the activities of their daily life. It makes it easier for them to engage with us."
