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CU Effect

CU Effect: Cooperation among CUs is thriving

May 13, 2015

MADISON, Wis. (5/13/15)--Working together for a common goal is one of the seven core principles of cooperatives. It’s also a tenet that differentiates not-for-profit credit unions from for-profit banks.

Just ask David Olson, consumer lending sales manager at UW CU, Madison, Wis.

CU Effect LogoIn 2010, Olson led UW CU’s development of its outbound calling program, with a strategy to attract more business from members.

“If a member does a mortgage or a loan application with us, we review their credit and look for ways we can save them money,” Olson told News Now.

Because the program is a win-win for members and the credit union, it has flourished, Olson said. Last year the credit union closed $33 million in consumer loans through the program. And Olson points out that his credit union works to make its program a win also for other credit unions and their members.

Members of UW CU’s management have shared information about the program at CUNA Management School and at credit union conferences. Olson has spent time with representatives from other credit unions providing insight on the program. He’s even held webinars on outbound calling.

“Over the years I’ve had at least a dozen credit unions that have reached out to me and asked, ‘What’s the playbook for this? What does success look like?’ I’ve invited credit unions to visit us. I’ve shared the lessons we’ve learned. I’ve shared our war stories. I’ve advised them what not to do.”

Before coming to UW CU, Olson spent 10 years in the banking industry. “There is no way I would have been able to do this working at a bank,” he said.

A couple hours’ drive west of Madison, in Moline, Ill., IH Mississippi Valley CU offers what Executive Vice President/Chief Operating Officer Brian Laufenberg terms “correspondent services” to the area’s smaller credit unions. Those services include check clearing, cash letter services, cash delivery, primary and secondary lines of credit, deposit services, internal audit services, enterprise risk management, and temporary management assistance.

Laufenberg told News Now that as a result of its size IH Mississippi Valley has the infrastructure and the scale to offer services to small credit unions at little or no cost.

Through its wholly owned subsidiary the credit union also offers mortgage and insurance services. ”Many of the smaller credit unions in town offer mortgages but they may just do balloon loans,” Laufenberg said. “We’re able to offer them the ability to provide their members with long-term fixed rate mortgages as well as nonconforming options. That way they don’t have to say, ‘No,’ to their members.”

Laufenberg told News Now that the assistance his credit union offers small credit unions makes good sense from a competitive standpoint. “Member expectations have and will increase over time, from so many different directions,” he said.

“We would much rather see the members of the small credit unions in our area stay with them than seek those services with a third party,” Laufenberg said. "We’ve put a lot of infrastructure in place because of our size. If small credit unions can tap that, we’re happy to share our resources. A strong credit union presence in the Quad Cities is good for all of us.”

Express

Click image to enlarge. BECU, Tukwila, Wash., has helped Express CU, Seattle, serve lower income and underserved members of its community. (Express CU Photo)

Todd Pietzsch, manager of public relations at BECU, Tukwila, Wash., cites the system-wide success of credit unions as a key reason why BECU supports other cooperative financial institutions.

“We want credit unions on a national level to thrive,” Pietzsch said. “We also want to assist our local credit unions that have a unique niche in serving our community.”

Among the credit unions BECU has supported is Express CU, Seattle, which faced challenges as the membership it historically served, employees of the railroad industry, began to age, Piezch said.

BECU has assisted with grants to hire employees and purchase equipment. BECU also helped Express CU establish Express Advantage, a partnership with the Medina Foundation, a local nonprofit that sought to bring low-income and other underserved consumers into the financial mainstream.

Express Advantage helps empower people to build assets and achieve financial stability through education, outreach, collaboration and advocacy.

BECU also helped Express CU through the application process to obtain its community development financial institution designation to better serve the low-income segment of its membership.

(Editor's note: The second part of this article will appear on May 27 in News Now.)