Why One CU Is Promising To Save Members $1M
SPOKANE, Wash. — Credit union trade groups long have trumpeted how much money CUs save consumers directly and indirectly — Global Credit Union is taking the concept a step farther.
The $340-million Global CU has hatched a plan to save its members a half-million dollars in a half-year. The program launched with little fanfare-no radio, TV or newspaper advertisements. Yet the initial savings goal was reached in three months, prompting Global to extend expand the goal to $1-million by Dec. 31, 2010.
Abby Koder, Global's marketing manager, said the effort began as an initiative for the CU's frontline staff to talk to members about how they could benefit from refinancing their credit cards, home loans or car loans. "The member service representatives talked about getting the best interest rate and how important credit scores are in getting the best rates," she said. "We provided information to MSRs on how to calculate savings. This became a goal to save our members a half-million dollars."
Initial Goal Was Easy To Reach
Global CU CEO Jack Fallis said the initial goal was meant to be "very achievable." "It was easy for our employees to grasp, and very easy to sell to our members," he said. "Many of our members are stuck in banking relationships that are not to their advantage. If we ask them about a home equity loan or a credit card, it is likely they are paying an interest rate that is too high. I am confident we can reach $1 million in savings or even beyond. This might be the jumping-off point for a campaign that is much bigger for our entire relationship."
Savings for credit cards was calculated using the Federal Reserve's Credit Card Repayment Calculator, which assumes the cardholder makes no more charges and only the minimum payment each month. The three-month savings total involved 90 members for $572,799.73; an average savings of $6,364.44 per member.
Koder said Global CU has sent an e-mail to members who are included in its e-mail database describing the program. The blasts typically are anecdotal and show sample savings calculations, such as a member who had a 29% APR credit card that Global was able to switch to a 13.92% card. "That person saved $16,000," she noted. "This and other examples help people think about where their financials are."
The program also is mentioned on Global's website and on member statements, but the bulk of the initiative is carried by personal interactions betweens MSRs and members in branches.
Both Koder and Fallis said the market is conducive for consumers to switch to a CU given current distrust and dislike of banks, but both made clear GCU has not gone on the attack.
"We don't ever take a negative stance so we don't spend a lot of time talking about banks," Koder said. "We ask people what their interest rates are and then we show them what rate we offer on credit cards and loans."
Fallis said he believes there is not a "credit union management team out there that is not looking for ways to establish their part in this 'new normal' in banking."
"Now more than ever we have a chance to strengthen our banking relationships with our members," he declared. "Our thought in doing this was helping members through a tough economic time was the right thing to do. We are not out there bank-bashing, but clearly there is an opportunity and every credit union should take the opportunity to demonstrate what they can do."