DULUTH, Minn. — Unexpected expenses hit consumers harder than ever in a down economy, which is why a credit union here is launching an effort to keep "life emergencies from becoming their financial emergencies."
Members Cooperative Credit Union's Emergency Fund Account is aimed at helping members build their savings painlessly. Once members sign up the service, automatic transfers are made each month from their checking accounts into the special savings accounts. And the $277-million credit union is adding a little juice to the promotion by entering members into a drawing for every transfer of $5 or more that they make.
"Five dollars is small enough where anyone can say, 'Yeah I can afford this,'" Marketing Manager Joanna Carlson explained. The automatic transfer feature helps to keep the funds moving from the checking to savings "out of sight and out of mind. They can build up their savings but they don't have to think about it," Carlson added.
The drawings are held monthly with the winner receiving $250; an additional drawing will be held once a year with the lucky member taking home $1,000. Members are not required to keep their winnings in the Emergency Fund Account. Carlson said MCCU started the program as a way to fulfill a number of its strategic objectives - chiefly financial education.
With a balance sheet that is over 100% lent out, MCCU is not having problems getting credit into its members' hands, unlike many other CUs that are excessively flush with deposits. But Carlson explained the new program is meant to be more of a "feel-good community program" and less about building deposits and attracting new members, as it is establishing the credit union as a leader in northeastern Minnesota.
"If something should happen to you that you're not prepared for, we want to be the ones that help you think about that, and help you be pro-active in preparing for emergencies."
The emergency accounts may help deepen relationships with existing members and deepen walletshare, especially with those who do not use MCCU as their primary financial institution. Carlson is hopeful that it will be a step in the right direction to get some members to say, "This is my credit union. I do want to bring all of my accounts here."
