Building Members’ Trust
Show young members and Hispanics you’re in their corner, and they’ll reward you with loyalty.
When courting prospective credit union members, actions speak louder than words. And sometimes you must listen before you act.
In fact, explaining the credit union difference oft en isn’t enough, says Bryce Roth, director of cooperative outreach at $582 million asset CitizensFirst Credit Union in Oshkosh, Wis. Roth also serves as president of Chatter Yak!, a credit union service organization that helps credit unions market to young people.
“Saying we’re ‘for people, not profit’ doesn’t mean much to them,” Roth says. “You can say that to them, but why not show it?”
Meanwhile, turning off the promotional pitch and simply lending an ear have ignited a strong outreach effort to the Hispanic community at $2.3 billion asset Travis Credit Union, Vacaville, Calif.
“The most important lesson we’ve learned so far,” says Sherry Cordonnier, director of corporate relations at Travis, “is that for us to attract this vastly underserved population of members, it’s imperative we listen to them.”
Many credit unions across the country have launched successful initiatives to reach out to two historically unserved or underserved population segments: Hispanics and millennials, generally defined as people born between the early 1980s and 2000.
Such efforts pushed credit union membership over the 102 million mark in late 2014, according to CUNA estimates, and allow these inclusive credit unions to bolster their long-term viability for decades.
Wooing the ‘Next Gen’
Many young people today have little trust in financial institutions—understandably, Roth points out. “They’ve witnessed banks getting bailouts,” he says, “while people around them have lost jobs. They’re smart enough to understand there’s a lot of negative behavior going on.”
Through Next Gen Outreach, CitizensFirst’s financial literacy program, more than 100 members ages 15 to 25 learn how and why credit unions differ from other financial institutions. They see living proof.
In the program’s financial literacy component, young adults meet regularly to discuss the financial topics they’ve selected. “They learn something,” says Roth, “and enjoy social time and food together. It’s really informal.”
Next Gen also gets young people out into the community. For instance, cash-mob events have prompted millennials to eat or shop at locally-owned businesses. One targeted restaurant experienced a 25% increase in that day’s revenues.
Another event, at a local theater, presented a CEO panel of four business owners, born and raised locally, who talked about their career paths. Next Gen members had the opportunity to ask questions: How did you get where you are? What should I do now so I can sit on that stage someday?
“We have a servant leadership approach here at CitizensFirst,” Roth says. “So we try to present tidbits of that to these young people, to help them understand how they can lead by serving others.”
Next Gen participants can apply for a spot on the three-member CitizensFirst youth board of advisers, which presents product and service ideas to the board of directors. Also, a Next Gen “champion” blogs on the group’s website and social media about topics important to peers, intensifying the connection between youth and CitizensFirst.
“Today’s young people want personal interaction,” Roth says. “Once you establish that and become a trusted adviser, not just a brick-and-mortar credit union, really good things can happen.”
NEXT Launchpad at Leaders CU
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.”
NEXT Listening up at Travis CU
CUNA: Hispanic and young adult outreach resources: cuna.org/marketing-and-member-education
Coopera, a CUNA strategic alliance partner: cooperaconsulting.com
Chatter Yak!: chatteryak.com
CitizensFirst CU’s Next Gen Outreach: nextgencu.com/citizenfirst
Ascentra CU’s Spanish-language site: ascentra.org/espanol
Listening up at Travis CU
Think of the Hispanic Advisory Committee members at Travis as being part ambassadors, part ongoing focus group.
“The committee is a group of Hispanic leaders who meet on a voluntary and regular basis to provide feedback and guidance so we can better serve our entire community,” says Barry Nelson, credit union president/CEO.
But Travis’s campaign to reach out to Hispanics in the community started long before the advisory committee came into existence in 2013, Cordonnier says. “We already had invested five years in grassroots efforts to develop strategic partnerships,” she explains.
With that foundation, the credit union’s leadership easily selected 13 committee members who represent diversity within the Hispanic community. “On the committee, we have a broad spectrum of individuals who can talk about what it’s like for an immigrant family, or how to talk to the migrant worker, or how to reach out to the educated Hispanic who wants to start a business,” Cordonnier says.
Since January 2010, Travis’s Hispanic membership has grown by 23%; today, Hispanics represent 21.1% of its 163,000 members.
“The advisory committee is just one of the assets that has helped us,” Cordonnier says. “Committee members are out in the community talking about Travis and building trust. Trust is a huge issue.”
Another crucial role of the committee is to advise Travis in developing products and services that meet Hispanic members’ needs and wants. Examples include:
- Credit-building loans;
- Quinceañera loans (for girls’ traditional 15th birthday celebrations);
- Financial education in Spanish;
- Prepaid cards; and
- Loans to cover the cost of applying for immigration services.
If members can’t get what they need on the spot, staff members explain what they must do so the credit union can help, such as obtaining a matrìcula consular— a Mexican identification card—or ITIN (individual tax identification number).
All in all, Travis takes a proactive approach to serving Hispanics. “We never want a member or potential member to have a dialogue with us and come away feeling we can’t help them in some way,” Cordonnier says.