Now even credit unions are looking suspiciously like cybercafes and living rooms.

Catching on to a concept that has grown increasingly popular among commercial banks, University of Wisconsin Credit Union is redesigning its branches to include coffee bars, fireplaces, and stock trading kiosks.

The changes are meant to put an updated face on the credit union and prevent its student members from bolting for regular banks after they graduate.

"Branding is something that credit unions are looking at as a way to distinguish themselves," said Fred R. Becker Jr., president and chief executive officer of the National Association of Federal Credit Unions, a Washington trade association with 1,000 members.

Once restricted to specific groups who qualified for membership based on a common affiliation, many credit unions are enjoying more relaxed rules that allow them to target business within defined geographic parameters as well. University of Wisconsin Credit Union, for example, is open not only to the school's students, faculty, staff, and alumni, but to those who live within five miles of its branches.

Charlene Stern, president of Stern Marketing, a San Francisco-area consulting firm, said the credit union wanted to be more appealing to compete with commercial banks. She refers to the approach as "financial retailing."

The former Wells Fargo & Co. retail executive said the idea is catching on. "Credit unions are starting to wake up and flex their competitive muscles," she said.

One branch, at the university's main campus in Madison, Wis., has already been reinvented. Changes for the remaining seven are underway.

Similar changes are underway at Meriwest Credit Union of San Jose, Calif. Formerly the eight-branch credit union for International Business Machines' western operations, Meriwest now targets customers in a five-county area that encompasses Silicon Valley. "There are some pretty high expectations here," said Julie Kirsch, the credit union's chief operating officer.

Meriwest will reopen its first refurbished branch next month and its second in October. The centers are meant to be attractive to the hip dot-com culture of the area, Ms. Kirsch said. "We're making a big statement with technology," she said.

Commercial banks have been doing this already. Michigan National Bank has been revamping its branches for the last two years. So far, the Farmington Hills company has converted or built 25 "financial stores" and has plans to have between 40 and 50 up and running in the next 18 months.

Michigan National's centers include areas where people can sit and watch CNBC or read a magazine. Loafing is fine.

"A couple of people come in on their lunch hours and just read The [Wall Street] Journal," said Chris Gill, director of distribution network planning. "It's a good opportunity for us to approach them."


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