SEATTLE — Verity Credit Union, a $432-million federally-insured state-charter, launched a program last year to further encourage the local popularity of bicycle riding.
Verity's bike loan program represents a more eco-friendly version of the traditional car loan or leasing plan — but instead of borrowing $20,000 or so for an automobile, this credit union offers its members a loan to purchase a bicycle, typically priced at around $1,000 at similar interest rates.
Although a loan applicant must join the credit union to be eligible, Verity's membership fee is just $5, so the membership requirement isn't a significant barrier.
Under terms of the loan, bicycle riders are offered a 6.24% annual percentage rate for a term of up to 24 months. Verity's loan amounts range from a minimum of $500 up a maximum of $7,500. No repayment is required for the first ninety days.
The bike loan program has been promoted heavily in the Seattle area through a social media photo-sharing platform created by CafeGive Social, a Portland, Ore.-based social media management and marketing platform.
Verity utilized the assistance of CafeGive to do a photography contest on their Facebook page, which encouraged local bike enthusiasts to post bicycle-themed photos for a chance to win a gift certificate in one of four categories. The winner in each category (based on voting) received a $250 gift certificate — so Verity handed out a total of $1000 in prize money.
"This contest was integral to our success in working closer with local bicycle shops and getting them to start having our point-of-sale displays at their locations and offer our financing as an option," Melina Young, director of marketing at Verity, told Credit Union Journal. "We still have those relationships today."
Young also said that since the inception of the bike loan program last year, 37 members of the credit union have joined it, with the firm handing out $86,257 in funds (or about $2,330 per member).
"Our members — and non-members — have had an incredibly positive reaction to this product," Young said. "When people learn that we have this product they are surprised — because it is very uncommon — and pleased because Seattle is one of the top bicycling cities in the nation so it really fits the culture here."
Indeed, Bicycling Magazine ranked Seattle as the eighth-most "bike-friendly" city in the nation for 2014.
The Seattle municipal government's Department of Transportation estimates that at least 158,000 residents of the city (almost one-fourth of the total population) regularly ride bikes.
"We [Verity] have actually had individuals tell us that they are bringing their loans to us — not a bicycle loan — because we carry this product, so they can tell that we really care about the community we serve," Young added.
Verity intends to keep the bike loan program around for the long-term.
Young further notes that one of the motivating factors behind the introduction of the bike loan centered on attracting a younger demographic of credit union members, namely Seattle residents between the ages of 25 and 40 (i.e., people most likely to frequently ride bikes).
"Seattle is continuing to add more bicycle-friendly items around the city, including a bike-share program and additional bicycle lanes, for example, so it is something that helped express that we are local and care about our unique community," Young noted.
However, Verity is not the only credit union that offers bike loans, especially in the bike-mad Pacific Northwest. Among others, Unitus Community Credit Union, a $928-million firm in Portland, Oregon and Sound Credit Union, a $1.1-billion entity in nearby Tacoma, Wash., also offer similar products.
