Archive for category Operations

GROWING CREDIT CARD USAGE BODES WELL FOR CREDIT UNIONS

Posted by on Friday, 17 May, 2013

From Jennifer Kerry:

As the economy improves, so does consumers’ willingness to use credit to purchase those items and services they have put on hold for the past four or five years. This is happening in consumer spaces such as auto loans, appliances and other bigger ticket items. Consequently, we’re seeing a substantial surge in credit use. Balances are going up, issuers are offering higher credit lines and so is the number of bank marketing programs aimed at extending credit to consumers – including credit union members.

Upward economic trending is certainly being registered, and felt, in credit card usage.  According to TRK Advisors, consumers charged $53.5 billion in credit card debt in 2012 – five times what they charged in 2010. Credit union card balances are up 4.6 percent since November 2011, according to CUNA Mutual Group, compared to growth of only 0.4 percent for the rest of the non-CU credit card market. Also on the rise, debit and prepaid card purchases grew by 14.6% ($177 billion) between 2009 and 2010.  

With this increasing level of credit card activity, banks are on the prowl. They are already marketing new cards, balance transfer offers and increased credit lines to their best customers. While a rising tide lifts all ships, credit unions must be proactive and creative in promoting their credit card business or banks may take away your potential growth with their heavily advertised programs featuring Vikings and movie stars.  If you aren’t in the credit game aggressively, you’re not going to win. 

Credit Cards Are Good for Business

Although it seems obvious, it’s easy to lose sight of this: Credit transactions drive both interest and non-interest revenue at credit unions. A new survey by FinancialBrand.com of bank and credit union executives underscores the importance of credit cards for future growth of both industries. Credit cards were number five on the priority list behind auto loans, mortgages and home equity lines of credit. Number one on the list was utilizing mobile banking solutions to increase lending activity. However, when properly managed, credit cards can be the most profitable lending product a credit union can provide.

How can credit unions capitalize on the growing market for credit cards?

First, increase credit lines, especially to creditworthy members. Credit cardholders typically keep their usage under 30 percent of their total lines of credit. If the credit card you provide doesn’t have an adequate credit limit, your member may choose to use another card for their major purchases.

Second, a viable method is to add products that address credit-bruised consumers such as credit cards that are secured by funds in a credit union savings account.

Third, cross-marketing is also an effective way to increase card usage by your members. If debit and credit cards together make for an attractive primary financial package, promote credit to debit card holders and checking accounts to credit cardholders. And if you have great credit card programs, you can win business with balance transfer offers. Responding proactively to current demand and services keeps your credit union and its credit card business relevant.

Fourth, building on credit unions’ strong legacy of service and trust is a key for credit unions to market any products and services, but that is especially so when it comes to credit card business. Be knowledgeable about the competition and be sure to inform members about your fair and competitive interest rates and fees. We have a positive story to tell members – be their credit ally.  

The Future

Looking ahead, the horizon is filled with exciting new payment technologies, products and services that will greatly benefit credit card use and its growth. The expansion of mobile payment technologies, P2P payments, mobile credit card readers and online purchasing, to name a few, are set to drive credit and debit card usage in the near future.  

The future is bright but credit unions must plan now and be prepared for the new world of financial services technology and certainly credit cards are at the top of the list. If we in the credit union industry focus on the right priorities and have in place the systems and procedures to adopt advances, we can continue to provide a valuable credit payment vehicle that will build credit card usage and income as the market demand grows well into the future.

Jennifer Kerry is Vice President, Credit Issuer Processing, for CO-OP Financial Services, Rancho Cucamonga, Calif. She can be reached at jennifer.kerry@co-opfs.org and (800) 782-90432, ext. 7022.


Member Business Lending in the Spotlight

Posted by on Friday, 9 March, 2012

Open for business?

Member Business Lending (MBL) is a topic that continues to generate a lot of buzz. Considering our current economic state, why are MBLs getting so much attention? Because they are one of the fastest-growing segments of credit union loan portfolios,  with an average loan growth rate of 4%*. Some credit unions are reporting even higher rates. CUNA’s News Now recently reported that in 2011, Michigan credit unions increased their MBLs  by 21.7%!

Other statistics to note:

  • The number of credit unions offering MBLs: 2,233
  • Average size of  credit union MBLs: $219,120

“While we know that MBLs may not be for every credit union, CUNA’s goal is to provide the most comprehensive information possible to help credit unions make an educated decision on whether to offer these services,” says Doug Benzine, Vice President of CUNA’s Advisory Services. To that end, we present a number of resources for credit unions currently offering or considering adding MBLs to their portfolio including (but not limited to):

1. Member Business Lending Resources;

2. CUNA’s Business Lending Institutes: Fundamentals, Credit Analysis and Advanced Credit Analysis; and

3. Consulting services.

Currently the cap on MBLs is 12.25% of a credit union’s total assets. As the national trade association, CUNA is advocating Congress to enact legislation which would  increase the  cap to 27.5% for well-capitalized credit unions.

Participate NOW in our Call to Action to increase the MBL cap, by contacting your  state representatives and urging them to include Small Business Lending Enhancement Act in the small business jobs bill.

*Source: FDIC, NCUA and CUNA E&S


Insights on Credit Union Innovation

Posted by on Tuesday, 29 November, 2011

Our friends at Credit Union Magazine featured an excellent article on their website today. The article—Think Outside the Cube by Libby Vertz—shares insights on innovation from Michael Spink, Communications Manager with Local Government Federal Credit Union and a Filene  i3 participant.

This Q&A piece deserves a quick read. It covers Michael’s thoughts on  i3 and the secret to being innovative.

Below is only a snippet from the article, so be sure to read the full article here.

Michael Spink, communications manager for Local Government FCU.

CU Mag: What’s one innovative effort taking place at Local Government Federal?

Spink: At Local Government Federal, we’re changing the way we think. We want to handle all our endeavors in innovative ways—from how we market products and go about operations to how we look at compliance and regulation.

It’s time to actually poke our heads out of the trench and really look at the bigger landscape. It’s a different world since we jumped into our foxholes a few years ago.

CU Mag: How will this benefit your CU and members?

Spink: It will make our credit union healthier and more efficient, and will increase the value to our members. We’ll also have a greater ability to respond to member needs more quickly.

On a grand scale, the benefit is a stronger credit union movement overall. The more we each honestly look at the new landscape, the more we’ll all learn about navigating within it.

What do you think… are credit unions too slow in implementing innovation and change? What’s your secret for being innovative?

 


Tornado Preparedness Checklist for Credit Unions

Posted by on Monday, 25 April, 2011

Severe storms and tornadoes have recently devastated communities which credit unions serve. As we mentioned in our previous post—Concern for Community: Credit unions and post-disaster community recoverythere are several disaster recovery resources available to credit unions.

Today we’d like to share another resource.

CUNA Strategic Services (CSS) and Agility Recovery—a CSS provider—are teaming up to help leagues prepare their credit unions before, during, and after a tornado strikes. See below for the message Wes Millar, CSS Senior Vice President, sent to credit union leagues Friday afternoon and click the link to download the Tornado Preparedness Checklist.

Are your credit unions prepared for severe weather?

According to AccuWeather.com, it appears the severe weather that has devastated communities from the Plains into the East over the past few weeks is going to continue.

Credit unions need to take steps to mitigate risks and protect their assets.  Agility and CUNA Strategic Services has provided a Tornado Preparedness Checklist for you to share with your credit unions.

Attached you will find a message ready to post to your website and include in your upcoming newsletters that will provide valuable tornado preparedness information.


What Can Credit Unions Learn From BP?

Posted by on Wednesday, 28 July, 2010

Now that my two-year-old says “oil spill” as soon as she sees the news, it’s safe to say that the oil spill in the Gulf has had an effect on almost everyone.  As the news continues to cover the damaging effects, BP and other organizations attempt to overcome challenge after challenge to stop the spill.  So, what can your credit union learn from BP?  Public relations? Disaster preparedness? Maybe. I’d say a lesson in risk management.

Long before the first drop of oil leaked into the Gulf, BP was aware of a potential issue.  However, the likelihood this issue would become a big reality outweighed taking measures to prevent it.  What didn’t weigh into BP’s scenario planning was the catastrophe that could result if the very unlikely occurred.  Defining the risk one step further as costing the organization more than $100 million per day and causing degradation of wildlife, local businesses and public opinion could have changed the perspectives of some to fix the issue even if the chance of a spill was extremely low.

In your credit union, do you have a potential “oil spill” where chances are slim that anything could expose the problem, but if something did, the damage could be catastrophic for your credit union, your members or even your community?  Take a lesson from BP, and address those issues.  Even BP’s peer organizations have learned a lesson as Exxon Mobil, Conoco Philips, Chevron and Shell are committing $1 billion to a rapid response plan for Gulf oil spills.  All of these organizations have disaster recovery plans.  They take additional precautions because they now know the magnitude of damage an unlikely occurrence can have, and can no longer ignore the small chance of it happening.  Lesson learned: BP and credit unions can avoid “oil spills” react more effectively with sound disaster recovery and rapid response plans, but can prevent with some truthful what-if scenario planning.

BP is an organization that credit unions can learn valuable lessons from.  What else do you think credit unions can learn?


Get to Know CUNA: What is MRM?

Posted by on Thursday, 22 July, 2010

The MRM Team - L-R Top: Barb Bender, Debbie Michels, Bottom: Sherri Wagner, Tonna Winkers, Connie Acker

I’ll give you a hint – you probably have talked to them on the phone once or twice… 

Tonna Winkers, MRM Manager, recently sat down to answer some questions about what (and who) the CUNA MRM department is and what they do. 

CUNAverse: What is MRM? What does your department do?
Tonna Winkers: The Member Relationship Management (MRM) team handles CUNA customer service orders and questions regarding CUNA products and subscriptions.  These come into MRM in a variety of ways; phones, web, email, fax or mail.  The department is made up of a great team of five, experienced representatives, who work in a call center environment.  We answer the phones from 8:00-4:30 CST, Monday-Friday. 

What is your favorite thing about working in customer service?
One of my favorite things about working in MRM is having the chance to talk to a variety of people in credit union land.  I’m sure everyone’s customer service area would say this, but I think we have the best customers!  Most people don’t realize the bond that a representative can create with customers over the phone.  Even though almost all of our correspondence is done over the phone or through email, we still get to know our customers and become friends.  We have worked with a number of our customers for years. 
 
What’s the biggest misconception about what MRM does?
I have always thought that the biggest misconception is that because we work in a call center environment, that others think our jobs are monotonous.  While we do the same type of work each day, e.g., answer phones, process orders, etc., each person we talk to and each order we handle is different.  We receive the regular types of calls that you would expect, but we have also received calls for directions from the airport, from credit union members trying to get credit bureau information, and sometimes from people who just want to talk.  Each situation is unique and is handled based on what that caller needs.  Even if we’re not the person, area, or company that can help them, we try to direct them to where they should go to get their answers.

Because we touch almost every area in CUNA, we’ve become known as the “go to area” when someone needs to know an answer and isn’t sure where to go for it.  While we may not know the answer, we usually know the right people that do.  Customer service jobs have a lot more variety than others realize.

What are some lessons learned over the years?
The MRM team has over 115 combined years of CUNA customer service experience.  You can imagine the lessons we’ve learned over the years!!  Here are a few of the lessons that really stick out to the MRM team:

  • Remember to always be patient with customers.  Sometimes they are not sure of what they want, and need you to assist them in getting to the end result.  You have to make sure you’re taking the time to help them get what they need.
  • Be sympathetic to what the caller is going through.  If it’s a problem, be quick to fix it; if a quick fix is not possible, call them back with 24 hours to provide a time frame on when they can expect a resolution or a follow up.
  • How you say something matters just as much, if not more, than what you say.  Your tone can carry more of a message than words.
  • I had a representative keep customer service notes that she had from 1989 that she passed on to me when she retired.  Some of these notes are “Give 100-200%” and “The caller does not always care about how much you know; they want to know how much you care!”

How can CUNA members contact you with questions?
We can be contacted a variety of ways: phone 1-800-356-8010, press 3; or email CCSOrders@cuna.com; or orders can be placed on our website too at www.cuna.org.  We’d love to hear from you!


Why it’s Our Duty to Mention Credit Unions on a First Date

Posted by on Thursday, 1 July, 2010

Rachel Best

From Rachel Best:

I think we all love credit unions. Or we wouldn’t be reading this totally splendid blog, right?

In fact, I would go so far as to say that “credit union people” are more vocal about their love of their credit union than bank people.  We tell the grocery clerk about the differences between a credit union and a bank.  We say, “Hey, I get my ATM transactions surcharge-free, how about you?”  We argue tax-exempt status with our friend who works for a community bank and then make a pact to stop discussing it so we can stay friends.

I think I talk more about credit unions than astronauts talk about the moon.  When people ask me where I work, my friends all go, “Is this where you start talking about credit unions?” No joke…they actually do this.  YES, this is when I start talking about credit unions and their awesomeness.  And most of them love it (or in the case of the above community banker friend – tolerate it) because they are credit union members themselves.   For those that aren’t, I try to show them the light.  I’ve had new acquaintances and professional friends comment at the end of my credit union diatribe, “Why isn’t everyone in a credit union then?”  I tell them that they qualify and visit creditunion.coop, etc, etc. I forgo mentioning that it’s because big banks are bad. Got to keep it friendly, you know?

I lecture young cousins about where to get their first loans.  And while I wouldn’t know from personal experience, I’ve heard that bars are a great place to discuss credit unions.  Mention it on first dates – you’ll know right away if your compatible!  Who cares if it’s awkward, embrace it, it’s our duty!  Ask, “Do I look like the Little Guy when I carry this umbrella?”

If you haven’t gotten someone to say “Why isn’t everyone in a credit union then?” this month, then we’ve failed.  I don’t think we are doing our job nor our service to fellow citizens if we don’t get them to realize what they are missing.

So go out and get them champs!  If you can’t bring people to the mountain, bring the mountain to the people.

Rachel Best is the Meetings and Exhibits Manager for the Credit Union National Association. Read her last CUNAverse blog post here.