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TMG incentive contest hikes new accounts 56

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DES MOINES, Iowa (5/28/10)--A recent 45-day employee incentive contest generated a 56% increase in new accounts compared with a similar period before the contest, said TMG Financial Services, a credit card issuing agent company for credit unions. The contest encouraged credit union staff to promote the ATIRAcredit MasterCard program to members who did not have the credit union’s credit card. Employees received $10 for each application that was approved, and then received a change to win a grand prize of 100,000 rewards points--valued at $1,000. Ellen Holtz, Nishna Valley CU, Atlantic, Iowa, won the prize. More than 25% of the participating credit unions exceeded their goals, and received a free lunch for the entire credit union from TMG. In the past year, TMG grew balances for portfolios on book by an average of 12%, while industry sources report credit unions saw a 1% increase and national issuers experienced a more than 10% decrease. Driving the growth were the economy; the Credit Card Accountability, Responsibility and Disclosures Act; and a marketing campaign, TMG said. “Consumers were rightly outraged throughout most of 2009 by actions of the country’s largest credit card issuers, and made their voice heard by seeking different options,” said Jeff Russell, TMG president/CEO. “We saw growth throughout the holidays, when many issuers saw declines. When we look at year-over-year analysis of our individual credit unions, we have seen new account growth at each credit union. “Our experience continues to reinforce the idea that most cardholders want to pay their bills and will pay their bills,” he added. “Our delinquencies are well below the overall industry standard, and at or below the credit union industry average.”

Lending depts. CUSO relationships in council paper

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MADISON, Wis. (5/28/10)--A relationship between a credit union and a credit union service organization (CUSO) can leverage expertise, innovation, economies of scale and the aggregate power to make services available to credit union members through their credit unions at a reduced cost, according to a new CUNA Lending Council white paper. “Finding the Right Shoe: Guidelines for a Successful CUSO Fit” explores six guidelines for successful relationships between credit unions and CUSOs:
* Determine if the CUSO’s values and mission sync with the credit union’s; * Choose a partner, not a vendor; * Keep expectations reasonable; * If in doubt, ask, ask, then ask again; * Make sure the underwriter has lots of experience with the types of loans offered; and * Monitor loans--monitoring is critical.
The paper also says that credit unions should seek to create partnerships with the right CUSO, as opposed to just monitoring a transactional relationship. “To ensure success, the credit union needs to be as clear and specific as possible about what they require from a CUSO--operationally, fiscally and professionally, as well as the scope of services,” the paper said. Credit unions must ask questions until they’re completely satisfied with the answers. They also need to look closely at the CUSO’s professional qualifications, including the type and scope of expertise the CUSO has with lending services it is assisting with. Also, review the experience of the staff and underwriters. “If all a CUSO does is underwrite a given loan, then all it is doing is filling an ‘academic’ purpose as a vendor,” said Bill Beardsley, president, Michigan Business Connection LC. “A good CUSO makes sure its work with the credit union is more than academic--its work should help fulfill the credit union’s strategic and cultural objectives.” For more information, use the links.