With an eye toward bolstering its membership rolls for the long term, Motor Parts Federal Credit Union last month geared up a program targeted at young adults.
The Young Movers and Shakers Club offers education to 17-to-22-year-olds on handling finances and provides a product line that include savings and checking accounts and ATM and Visa cards.
Club members also are entitled to special promotional rates.
Motor Parts Federal's program is one of a growing number of credit union programs to get young people involved in membership early.
"It makes a lot of sense if you're looking to hold on to members for the long term," said William Connors, president of Callahan Financial Services, a division of the Washington-based consulting firm Callahan & Associates.
Credit Union National Association statistics show that 17.4% of credit unions, representing 38.2% of the industry's membership, had youth programs in place in 1994. That's up 20% from 1993, and CUNA economist Keith Peterson expects more credit unions to hop on the bandwagon.
"A big part of it is that everybody by now is familiar with the demographic trend that the population is getting older," said Mr. Peterson, of Madison, Wis. "Credit unions are realizing you're going to have to do something to attract young people or else you'll have nothing but older members, who don't borrow."
Motor Part Federal spent the money to cast a wide net of advertising and direct mail to reel in new members, and it's expecting a big catch.
"We see a large potential," said Kevin M. Kelly, marketing director for the $64.5 million-asset institution in Auburn Hills, Mich. "We hope to lock down 1,500 members in 12 months. We look at it as an investment in the future."
Financial Plus Credit Union in West Des Moines started going after youngsters 10 years ago. Teaching kids how to handle money is a key part of its program.
"There is a need for teenagers to be educated about their finances," said Nancy Brickman, a member services representative. "We try to do that and hopefully keep them as a member for life."
Children aged 12 and younger may join the credit union's Kirby Kangaroo savings club, which hosts parties, coloring contests, and a trip to the zoo. It also sends out newsletters that "try to educate them without them knowing it," Ms. Brickman said.
Teenagers may join the Status 1 club, which offers checking accounts, ATM cards, and - with parental approval for members under 18 - credit cards, Ms. Brickman said.
"We suggest they have a limit of $100, but some parents allow their children to go up to $300," she said.
Most credit unions with programs developed them on their own, but the Connecticut Credit Union League this year came out with youth-oriented program it markets to credit unions.
"The 13-to-19-year-old market has $106 billion of spending power a year," said Terri Atkinson, a membership development specialist for the league. "Financial institutions should be tapping into that."
The program offers a wide array of products, including loans and credit cards with parent co-signers, Ms. Atkinson said. It also includes such incentives as slightly higher deposit rates and free checking.
The program's kit comes with a camera and laminating equipment, so credit unions can give photo IDs to members too young for a driver' license.
Participating credit unions pay a one-time $1,000 fee plus $350 per year.
Last year Robins Federal Credit Union, Warner Robin, Ga., started bringing the credit union to a local grade school. Supervised by credit union employees, students take deposits, sometimes as little as a nickel, from their friends. The money then goes into accounts at Robins Federal.
The goal: teaching children how to handle money to avoid future problems.
"We've had customers with overdrafts who asked how they could have run out of money when they still have checks," said P.J. Monroe, supervisor of training and marketing.