With Primary Sponsor Closed, One CU Looks To New Future In Youth
The $83-million Discovery FCU is focusing its efforts in drawing the attention of teens and young adults who attend schools in the area to help fuel its future expansion.
The 6,300-member credit union was hit hard in 2003 when an opto-electronics plant that was owned by Lucent Technologies-which later became Agere Systems Inc.-closed. The plant, known as Reading Works, had been the credit union's primary sponsor, employing 4,900 workers at one point.
"We aggressively started targeting students in late 2003, when we converted to a community charter," said Tricia Szurgot, the CU's marketing manager. She said that students attending schools in the area, such as Albright College, Alvernia College and a branch of Penn State University among others, now make up about one-fourth of all members. Discovery FCU would like to see that proportion increase to about one-half while overall membership expands by about 10% annually.
"As our older members transition from borrowers to savers and investors we want to cultivate younger member," she said. While college-age members may not be as profitable yet, they will soon be young professionals starting families and even though they may move to other cities they can remain members for when they transition into "higher borrowing," she said. Tools such as online banking, nationwide ATM network access and direct deposits from workplaces can make this possible, she said.
The credit union is also making an effort to reach out to teenagers and other groups in the community with educational programs to improve its presence, she said.
Reading is about 45 miles northwest of Philadelphia.
Szurgot said that the credit union is building a new branch that will include a conference room area that would allow it to offer seminars to teach teenagers and young adults about credit. The new facility will open in the fourth quarter.
The "Latte and Learn" sessions are purely educational. "We keep the sales message out," she said.
"Generally when we can bring new members at a young age...offering them value and education, we are securing the CU's future. While they may not start out as very profitable, over the years they are going to grow," she said.
The CU offers college students a 9.3%-interest rate, no annual fee credit card, as well as no-monthly-charge checking and free ATM access.
"We offer no-fee student loans through the Pennsylvania Higher Education Association. A lot of their members charge an application fee, we don't," she said. Students can borrow to pay for room and board in addition to education.
The free seminars will be held one day per week over a one-month period. As many as 75 students are expected per session, though "we'll need to determine the effectiveness of class size," she said. Szurgot and other credit union officials, such as lending managers, will give the lectures.
The focus on younger members was a decision rooted in the closing of the Agere plant in 2003. In that year 3,000 of the best jobs in town disappeared as a result of the company moving production overseas, USA Today reported in March 2004. The opto-electronics plant closed as the struggling Agere moved to manufacture parts in places like India, Taiwan and Singapore.
The decision to convert to community and shift focus from serving high-tech employees to start focusing on the students was taken "in order to sustain" the credit union for the long run, she said.
The credit union is also putting in place other seminars for different age groups and one of them, for example, deals with maximizing retirement funds.
The credit union gives participants certificates of course completion and treats them to pastry, bagels and refreshment. She said the cost is "little" relative to potential benefits.
Szurgot said that in the next few years the credit union would like to see the average age of its members go from the current "high 40s to somewhere along "the early 40s, late 30s"
The credit union was previously named Reading Works FCU named after the plant that for decades had manufactured high-tech equipment under the names of Western Electric Co., AT&T Technology Systems, Lucent and Agere.
The CU's name changed to "Discovery" as it was "more progressive, a brand that was more applicable. Reading Works really had no meaning. We wanted something that also commanded an image and perception that we were progressive, full service...To discover, evolve, prosper," she said.
The credit union will be moving out of the space it currently leases once its new facility is built. The current facility will not be kept as it has no drive-through.
Szurgot said that teenagers and young adults, as a market segment, have some common characteristics that go beyond the "media cliches."
"They are intelligent, savvy, and so inundated with marketing messages in television and print that you need to differentiate your message. We say to them: we want to give you a simple, basic solution in a way that can truly benefit you," Szurgot added.
"They are computer savvy, very computer-literate, and understand the resources that are available to them," she said.
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