Nexus Connection

Shout-Out to HarborOne

Posted by Ron Jooss

I want give a huge shout-out to $1.7 billion/149,000-member HarborOne Credit Union in Brockton, Mass., which has been honored with a 2010 National Credit Union Foundation Wegner Award.

I thought it was important to spread the word as much as possible about HarborOne CU’s Multicultural Banking Center, which assists low- and moderate-income residents, minorities and immigrants, the groups targeted most often by subprime lenders, costly payday lenders and expensive check-cashing services. 

Please take a minute to follow the link and read what a difference HarborOne CU has made in its community. The credit union is certainly deserving of the Wegner award. I can only hope it is just one of many accolades the credit union receives. Of course, the rewards the center offers the community of Brockton, Mass., are long-lasting and compounding.

This is about more than people helping people; it’s about creating community. To say HarborOne CU is a foundation of the Brockton community is almost an understatement. It also offers both opportunities and lessons for other credit unions. How many other businesses can fit these types of services into their business model? Or if you want to look at it from a different perspective: Do you think any other local business has created more trust in the Brockton community lately than HarborOne CU? Or differentiated itself better? That, my friends, is the credit union difference.

Ron Jooss edits the marketing and general management sections of CUES' Credit Union Management and is editor of CUES Business Lending Edge e-newsletter.

Packaging (Loans?) Made Perfect

Posted by Lisa Hochgraf

A friend I respect a lot for her medical knowledge (formerly an ER nurse, now mom and biology instructor) raved on Facebook recently about Target's new medicine bottle.

I asked Kristen for more specifics about just what she liked, and check out what she said:

It is really well thought out for people who are on multiple medications, and for families with more than one person taking medications: 1) Each family member is assigned a color--all the medications with the blue band belong to one person, and the red bands to another 2) The bottle itself is flattened, so all the information--drug name, instructions--is easily readable without having to read around a cylinder 3) The backside of the bottle includes a physical description of the medication inside--ever tried sorting pills for Grandma and wondered which medication was the yellow pill and which the blue? 4) The bottle is designed to stand on its lid, and the top (normal bottom) of the bottle has the name of the medication in large print--really useful for people who store their medications in a basket--they can identify the medication from above. Packaging science at its best. I am really impressed!

Now I have to say I really like and trust my local pharmacist, but this bottle is cool enough to at least turn my head and consider whether Target might be a good place to fill my next script. Read more about Target's marketing plans for the new bottle in this article.

In a way I can't believe I'm blogging about pill bottles this morning. I wonder if there's a way loans or savings accounts could be packaged that would make people turn their heads and think about switching over to your CU? Ideas, anyone?

Credit Card Addiction?

Posted by Lisa Hochgraf

You wouldn't knowingly sell an alcoholic a beer, right? So would you market a credit card to a chronic abuser of credit? Is abstinence the best way in both of these cases?

This is the tough question Laura Enock explores today in her "Teaching Smart Monday Management" column. CEO of CUVA and publisher of www.CUcontent.com, Enock acknowledges that comparing alcoholism to having a tough time managing credit may be a bit dramatic. But she also tells a compelling story about how she and her husband gave up credit cards for debit for the good of their personal finances.

"Sure, you'd love to have more members carrying your credit card in their wallets," Laura writes. "And you may even have specific marketing goals surrounding that wish. But keep in mind that even if your rate and terms are better than anything else that's out there, your member may be better off without any credit cards. And if that’s the case, let your members know you appreciate their membership, want all their financial business and welcome them at the credit union. But be forthright and let them know that a credit card is not in their best interest. At the very least, don’t market it aggressively to a member who would be better off without it."

Does anyone already have a plan in place to market less to people who might find a credit card to be a less-than-helpful service? Anyone want to argue this another way? Check out the column and post your comments below.

Eat, Sleep, Swim (More on Simplifying 2009)

Posted by Lisa Hochgraf

Early this morning, during my essential-for-good-sleep lap swim, I got to thinking about Michael Phelps, winner of a record eight gold medals in swimming in the 2008 Olympics. As I crawled along (literally), I wished I had feet like Phelps'--big, and practically webbed. And I wished I had his focus. One of my favorite stories that came out of Beijing was Michael's clear take on exactly what he was there to do: eat, sleep, swim. I can't imagine his days truly were that simple, but his mind was clear about his purpose.

If I could focus my mind on my day that tightly--eat, edit, parent (OK, sleep, too, I'm already going beyond three things)--would all the other details of life become clearer? Would I win more gold for my efforts?

If I were a credit union, what might the focusing mantra be? Maybe: serve, lend, teach? What three things would you suggest credit unions focus on in 2009?

Selling Loans in a Down Market?

Posted by Lisa Hochgraf

I've been hearing rumblings that the current economy, complete with expensive eggs and way expensive gasoline, may actually be pushing people to SAVE again.

Wow! That's great news, isn't it! Credit unions are all about thrift, right? (Denise, that one was for you.)

At the same time, having people save more might be tricky for credit unions because, like it or not, they don't make money on share deposits. They make money when people take out loans.

So, experts out there in CU marketing, what do you think? Are the strategies for selling loans in a down market any different? What tactics work well? Do you promote different types of loans when the economy is down than when it is booming? Is anyone bundling savings products with loan products at this juncture?

Thanks in advance for sharing your thoughts and approaches.

More Ideas for Helping Members Save or Spend Their Stimulus Rebate

Posted by Jon Cook, CUES editorial intern

"What are you doing to help members save or spend their federal stimulus rebates?" was the question CUES Editor Lisa Hochgraf posted in early April to CUES Net, a CUES-members-only listserve. (She also wrote about the stimulus rebate support being offered by one marketing firm in this Nexus Connection post.)

CUES Netters responding to Lisa's post reported giving members new savings and borrowing options that coincide with the stimulus package. Other things credit unions can do at this time include pointing members to useful resources (see below) and helping members who wouldn't usually file a return do so, to become eligible for the rebate.

One CUES Net participant reported that her credit union is offering a great savings rate to encourage members not to spend the rebate right off the bat.

"We created a five-month, 5 percent certificate, $1,500 maximum that will be offered during May and June as an alternative to spending the money," replied Ellen Yacovone, interim CEO of $150 million Tucson Old Pueblo Credit Union, Tucson, Ariz. "Our primary focus will be educating our members to first use the funds to pay off debt, but if they don't have [a loan to pay off], save it instead of spending it."

Another CUES-member credit union is offering special programs to try to bolster waning loan demand.

"We are rolling out several loan specials to carry us into the summer," wrote Marshall Boutwell, CEO of $93 million Gwinnett Federal Credit Union, Lawrenceville, Ga. "Hopefully, that will stimulate increased loan demand, because we are seeing loans go down (despite great rates) and deposits are flowing in. Members seem to have stopped spending and they are paying down their debt. While it is not good for the CU over the short run, it is good for the members and the CU in the long run."

And still another is inviting its members to "double their rebate."

"We're offering our members a way to double their stimulus checks by depositing their checks and taking out a partially secured loan for twice the amount of their deposit, up to a loan amount of $3,600," wrote David Lucas, CEO of $54 million Leyden Credit Union, Franklin Park, Ill. "Repayment is up to 24 months and the rate is dependent on the term they choose.

"We're marketing it as a way to double your money and still have the original amount available after the loan is repaid," he explained. "Since the loan is half secured, we'll be able to offer it to members that may be struggling a little bit."

In addition to offering special savings programs or loans, CUs can direct their members to the MyMoney.gov Web site, created to provide access to financial education tools that can help Americans to save, invest and manage money. The site includes a section specific to the stimulus package. It also has warnings about scams that may go along with the stimulus package payments.

Indeed, with about $100 billion going to an estimated 130 million households, there has been worry that scammers will try to snag a chunk for themselves. The Internal Revenue Service urges consumers not to give account or Social Security numbers over the phone or via e-mail, because the IRS will not be contacting anyone by phone or e-mail about the stimulus payments. The only way to get the payment is to file a 2007 federal return, which brings up a question: What about those who don't usually file a tax return?

CUs can educate members about how to get a rebate, and help those who wouldn't usually file a tax return. This could include members on disability, Social Security or veterans benefits. This is a way for many CUs to give back to their members.

The April 15 tax deadline has come and gone, but people can still complete their tax forms and receive the stimulus payment. The final deadline for filing a return to become eligible to receive a stimulus payment is Oct. 15. According to the IRS Web site, the payments will be delayed by an average of about two weeks from previously scheduled payment dates.

Other ideas? What else can credit unions do for members? I look forward to your comments.

Marketing a Four-Minute Loan

Posted by Lisa Hochgraf

Can your credit union get a member an online loan decision in four minutes or less? Do you tell the member how fast the process is up front?

CUES VP/Publications Mary Arnold recently brought to my attention the "four-minute loans" offered by $229 million CommonWealth One Federal Credit Union, Alexandria, Va. From the CU's home page, I clicked on "24/7 Lending: A loan decision at your finger tips – when you need it! Click here to get an instant decision anytime, anywhere."

The linked page says:

"Welcome to our Internet Loan Application!

• The average time for completing our application is only 3 minutes.
• After submitting the application we will provide you with a decision in less than 60 seconds.
• Thank you for applying through CommonWealth One Credit Union..."

We think that many credit unions may have the capability to make decisions so fast. But the team at CommonWealth One FCU (led by President/CEO John R. Blair Jr., CCE, a CUES member) gets a salute from us for saying it so plainly. Members who follow that link know what great service they're getting. Well done!

Peer-to-Peer Lending: Here to Stay

Posted by Christopher Stevenson

Peer-to-peer lending (P2P) just got a shot in the arm from Virgin USA (you know, Sir Richard Branson's Virgin), which announced May 15 that it has acquired a majority stake in CircleLending, Inc., an early leader in P2P lending. Until now, CircleLending has concentrated its attention on managing loans between family and friends, formalizing what 20 years ago would have been an IOU sketched out on a cocktail napkin.  But Virgin's investment in CircleLending will create a new Virgin-branded financial service offering that promises to bring some new twists and turns. It takes a serious infusion of capital, cheeky forward-thinking entrepreneurialism (think Virgin Money, Virgin Atlantic Airways, and Virgin Galactic), and a global brand, and pairs them up with a disruptive innovator in financial services that appeals to Gen Y's reliance on peers and desire for customization.

P2P lending has been in the peripheral vision of credit unions for some time, but it looks like it has finally moved front and center. In an American Banker Online article, Anthony S. Marino, Virgin USA's SVP of corporate development, says they are "...building a major, Virgin-branded financial services company in the U.S." Virgin/CircleLending plans a series of new products, inlcuding a direct mortgage to supplement peer-to-peer home loans, a credit card, and student loans. If there has been any doubt that P2P lenders would become major players in financial services, I think they've been resolved.

Want to learn more about P2P lenders and their potential? Check out the recent peer-to-peer lending update in CUES Tech Port, or read Filene Research Instititute's great report, Peer-to-Peer Lending: Back to the Future.