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Consumer awareness translates to CU growth--leagues
MADISON, Wis. (1/3/11)--For all the good publicity credit unions have generated from campaigns such as or consumer backlash against big banks, the enthusiasm does not appear to be translating to membership growth. Nationally, credit unions grew at a 0.7% rate through Sept. 30. Total loans were down -1.2%. But credit union leagues in states with coordinated awareness programs say they are bucking those trends--and they cite data to back it up. The Pennsylvania Credit Union Association’s (PCUA) iBelong awareness program has been in place for three years. Michael Wishnow, senior vice president of communications and marketing, said Pennsylvania credit unions had either lagged or maintained pace with national credit union growth statistics for 25 years when a group of state credit union CEOs convened to see what they could do about improving that status. “It all came down to one thing: awareness,” said Wishnow. PCUA leaders thought awareness was so vital to their financial health that they created a mandatory assessment for member credit unions to fund the iBelong campaign, Wishnow said. The funding was used primarily to produce a high-quality TV/radio ad campaign. Wishnow said the quality of the production has helped the campaign have a greater impact for consumers--and made a big difference for credit unions of all sizes. “Even the largest credit union probably couldn’t afford to spend on the production of the spots, [and maintain] the quality of them, let alone run them on a statewide basis,” he said. Wishnow said he believes--and just as importantly, PCUA’s members believe--the investment has translated into growth. He cited 2010 second quarter data: Pennsylvania credit unions have exceeded national rates in membership growth (2.2% vs. 0.9%), assets (8.9% vs. 3.8%), and loans (5.4% vs. -0.9%). In part, because of that success the amount Pennsylvania credit unions are assessed for the iBelong campaign will decrease by one-third in 2011. Credit unions under $20 million in assets will pay $7 per million. Credit unions between $20 million and $50 million in assets pay $27 per million. Those $50 million and over in assets will pay $40 per million. The association’s credit union service organization, Pacul, also will make a $50,000 contribution to the campaign, which will cost $1.1 million in 2011, down slightly from $1.2 million in 2010. New Jersey Credit Union League (NJCUL) President Paul Gentile also attributes his state’s credit union growth to increased public awareness. The NJCUL’s “New Jersey Credit Unions: Banking You Can Trust” campaign can be seen and heard on radio and cable TV and in New Jersey Transit stations and on buses. New Jersey credit unions grew by nearly 25,000 members in the first half of 2010. As of the third quarter, member loans had increased by 1.9%, compared with a national decline among credit unions of -1.2%. Member business loans at New Jersey credit unions rose at a 17% rate. Nationally, credit union member business lending increased at a 7% for the third quarter. First mortgages at New Jersey credit unions were up by 9.3%, compared to a 2.3% rate nationally. “The branding campaign is definitely helping,” Gentile said. “We’re pushing everybody to the [national credit union finder] website. New Jersey gets the second most visits of any state in the country, so we know we’re getting people to visit that site. We think they’re signing up for memberships and taking out loans.” Gentile said New Jersey credit unions contribute to the campaign on a voluntary basis. “As a league, we think telling the credit union story is so important that we are willing to subsidize it on our own,” Gentile said. Nowhere has the effect of the recession been felt more directly than Michigan, which has experienced the restructuring of auto industry. Yet Michigan credit unions have grown the past two years. Michigan credit unions added more than 50,000 members in 2010, the second straight year it has surpassed that figure. By comparison, that’s nearly three times the 17,000 members added in 2008, the league said. Michigan had 4.5 million credit union members as of the end of September, and 44% of the state’s residents do at least some of their banking at credit unions, the Michigan Credit Union League (MCUL) told the (Detroit News Dec. 26). Among the 10 most populous states, Michigan has the highest rate of credit union membership. MCUL President/CEO David Adams said he believes strong cooperative advertising programs such as Own Your Money and Invest in America made Michigan credit unions stand out at a time when banks fell out of favor with many consumers. “Michigan has always been a strong credit unions state, but as the state has lost population in the past decade, credit union membership growth has been negligible,” Adams said. “That is, until the past two years.” That’s when Michigan credit unions kicked in more than $3.4 million for the “Own Your Money” and “Invest in America” messages. Invest in America was a partnership with automakers that offered credit union members savings on GM vehicles while marketing the benefits of credit union membership. Own Your Money is a TV and radio advertising campaign geared to 18- to 34-year-olds, with an underlying message that credit unions offer member-focus, value and personal control. Pennsylvania’s Wishnow said that awareness campaigns such as Own Your Money, iBelong and Banking You Can Trust explain to consumers what a credit union is and inform them that almost anyone can join. “Then credit unions don’t have to invest their time and energy on explaining what a credit union is,” Wishnow said. “We’re doing that, so they can focus on specific products and services. And that’s more important now than ever before. The bottom line is a lot different than it was four years ago. This alleviates some of that pressure.”
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