Launchpad at Leaders CU
The Launchpad program at $225 million asset Leaders Credit Union, Jackson, Tenn., aims to help young people “make the jump from being a kid to being a contributing adult,” says Josh McAfee, vice president of marketing. At age 26, he remembers that leap well.
Launchpad started in January 2014, replacing a program targeted to students at several local colleges. The new program broadens the focus to youth ages 15 to 25, a demographic that now represents roughly 10% of Leaders’ 33,000 members.
“By the time kids get to college, many have made their banking decisions based on what their parents do,” McAfee says. “So we can’t wait until their college freshman year to throw them a T-shirt or Frisbee and hope they come bank with us.”
Launchpad also shift ed strategy by reaching out to young people practically on the credit union’s doorstep— members’ children. “Instead of focusing on people we don’t know and who don’t know us,” McAfee says, “we look at the large group of potential members in the same households with our current members.”
Prior to Launchpad, the credit union already offered several products and services aimed at youth, such as student checking, savings, and education loans. “The huge benefit of Launchpad,” McAfee explains, “is that it pulls those disparate products and services under one umbrella.”
McAfee modeled Launchpad aft er a similar program at Northern Federal Credit Union in Watertown, N.Y., where marketing specialist Alexa Bennett was more than happy to share successful strategies. “That’s the beautiful thing about credit unions,” McAfee says.
On the Launchpad website (launchatleaders.com), young people can find program news, financial education, and information about youth-oriented products.
Among those products is the “graduate” auto loan, targeted to high-school and college grads—who, even when employed, typically face borrowing hurdles because they lack credit profiles. Leaders gives them a loan at a reasonable rate and requires no co-signer. McAfee reports auto loan charge-offs haven’t increased.
“The conventional wisdom,” he says, “is to give young people a credit card as their first debt experience. But why not give them their first opportunity on a vehicle they need to get to class or their job? If you give young adults their first shot, they’ll be loyal members for a lifetime.”
Smooth lending at Ascentra CU
Slowly but surely, $335 million asset Ascentra Credit Union in Bettendorf, Iowa, is becoming the go-to place for local Hispanics who need financial services.
For instance, Muscatine, Iowa, has a population that’s 16.6% Hispanic, but 30% of members at the Ascentra branch are Hispanic. Likewise, Hispanics make up about 25% of Ascentra’s membership at the branch in Moline, Ill., which is 17.1% Hispanic.
As of year-end 2014, 8.1% of Ascentra’s 34,000 members were Hispanic. The credit union’s goal is to reach 10% by the end of this year, says President/CEO Dale Owen. The average age for these Hispanic members is 40.4, compared with an average of 47.4 for non-Hispanics. That’s important because the average age of credit union members is 48.5, according to the 2014 National Member & Nonmember Survey, sponsored by Credit Union Magazine.
Alvaro Macias, Ascentra’s community development manager, leads the Hispanic outreach effort. He’s only the second person to hold that position in the past decade—and stability is critical, according to Owen.
“One lesson we learned is that a lot of programs like this hinge on one person,” Owen says. “If that person leaves, the program is dead in the water. We’ve developed a pool of people who are equally passionate about the program and could fill that role internally.”
Ascentra now makes 6% of its loans to Hispanic members. Loan charge-offs for Hispanics and non-Hispanics are fairly comparable, at 0.6% and 0.4% respectively, according to Owen.
One key to success is tailoring loan products to Hispanics’ needs. For instance, Ascentra’s Préstamos Para Mi, or Loans for Me, offers a suite of small signature loans to buy furniture or travel to a home country, for example. In a partnership with the Diversity Service Center of Iowa, Ascentra also offers loans to help pay fees for immigration services, which can cost hundreds of dollars per person. The credit union fully secures those loans through grant funding.
Membership diversification has strengthened Ascentra’s lending portfolio. “It has helped us smooth some of the ebbs and flows,” Owen says.
For instance, many members who work at Alcoa— one of the credit union’s major select employee groups (SEGs)—held off borrowing last year because of uncertainty stemming from union contract negotiations. “Normally, our lending would have been down last year,” Owen explains. “But because of our membership diversification, we held our own.”
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