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CU marketers shifting funds to interactive budgets

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MADISON, Wis. (7/16/09)--Marketers plan to grow their interactive media budgets by shifting funds from their traditional media budgets--including direct mail and newspaper advertising, says a report from Forrester Research. Travis CU, Vacaville, Calif., has cut back on its newspaper advertising because newspaper readership is dropping, Cathy Rios, vice president of marketing, told News Now. But the credit union hasn’t reduced newspaper advertising as much as it has increased online advertising, she added. The online advertising has paid off--the credit union has generated a lot of traffic on its website, and many credit union members have joined online. Travis works to target specific groups when advertising online and posts ads on a variety of sites. The credit union continually refines its online advertising based on what generates the most hits. Credit unions’ advertisements will vary based on their fields of membership, branch locations, and members’ interests, John Ferver, Travis CU product manager, told News Now. Online advertising is effective because it allows credit unions to place ads in front of people who live in a certain geographic area or who are searching for related products, he added. Travis also engages in social marketing, through Facebook and Twitter, and offers e-mail marketing with a monthly e-newsletter. Forrester’s study also said that some marketers trimmed their budgets in 2008 in the areas of online advertising, e-mail marketing and social media spending. Although the economy has caused some credit unions to tighten their budgets, Rios and Ferver encouraged credit unions to take advantage of the economic crisis. “Spend your money wisely--it’s not the time to cut,” Rios said. Both noted that spending money on marketing is effective during a recession because many others cut back. And with many consumers dissatisfied with big banks, credit unions have a great opportunity to advertise their benefits, Rios added. When transitioning from traditional media to social media, credit unions should apply similar marketing tactics with other media to online space, she said. Although 40% of marketers Forrester surveyed indicated direct mail would be the first thing they would cut, several credit unions noted direct mail is still relevant. Travis CU said it still receives a strong response from direct mailings. “Direct mail is a strong piece of the puzzle,” added Cindy Jenkins, business development specialist for NRL FCU, Oxon Hill, Md. “It works well for us. There are no plans to cut it.” Direct mail is crucial for NRL FCU’s membership drives, Jenkins told News Now. Her credit union sends out about 12 direct mailings per year. NRL, which stands for Naval Research Lab, doesn’t engage in newspaper, television or magazine advertising. “Our field of membership is pretty specific,” Jenkins said. “It’s not cost-effective.” NRL FCU uses e-mail marketing and sends bimonthly messages about upcoming events and promotions to employee groups. Members also can sign up for e-mails from the credit union, she said. The credit union hasn’t used social media sites like Facebook or Twitter, but plans to use more podcasts in the future, Jenkins said. Sarah Cecchin, assistant vice president of marketing at Pacific Service CU, Walnut Creek, Calif., and chair-elect of the Marketing Association of Credit Unions, said direct mail is relevant to credit unions. “Direct mail is still valuable,” she told News Now. “[With it], we’re able to quantify our results. We can’t afford to cut it.” Pacific Service sends about four direct mailings per month and has become much more targeted in its mailings. For example, instead of sending the same direct mail piece to all members, Pacific Service segments direct mailings to specific groups with pieces that are tailored to their needs. Though the response may not be as large with the smaller group, the return is higher in dollars, she said. Direct mail is expensive--it costs Pacific Service about $1, including postage, for each piece. Some direct mailings can cost up to $3 a piece, Cecchin said. For credit unions that need to cut their direct mail budgets, Cecchin advised to better target the mailings and make them more intelligent. Pacific Service sends out letters that speak specifically to the members who receive them, with information the credit union has about their current products and services. For instance, if the credit union knows a member has an auto loan with another institution, the credit union could send the member a letter with information about refinancing the loan. Although Forrester Research’s survey results indicate that markets may shift toward more interactive media, Cecchin said what credit unions use to market in the future will depend on what’s quantifiable. Credit unions will ask, “How are we able to best spend our money?” she said.

Missouri governor vetoes bill of interest to CUs

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JEFFERSON CITY, Mo. (7/16/09)--Missouri Gov. Jay Nixon vetoed 23 bills passed by the Missouri General Assembly, including one bill of interest to credit unions. The bill is State Bill (SB) 235, which establishes a process for converting a manufactured home from personal property to real property and back again (The Missouri difference July 15). Nixon vetoed the bill because a Guaranteed Auto Protection (GAP) insurance amendment was included, according to the Missouri Credit Union Association (MCUA). From conversations MCUA had with the governor’s office, it appears that Nixon does not find GAP insurance consumer-friendly, MCUA said. Near the end of the legislative session, a bill to allow banks to sell GAP insurance was added as an amendment to SB 235. GAP insurance covers the gap between what is owed on a car and what it is worth if the car is totaled in a covered loss, such as an accident or theft. By statute, the governor has until 45 days after the end of the legislative session to sign a bill into law or veto it, and the deadline was Tuesday. If not signed or vetoed, bills become laws Aug. 28. The bank GAP insurance language also was in SB 243, which the governor also vetoed. This does not impact GAP insurance offered by credit unions because that insurance is sold via a third party, MCUA said. Lawmakers will have the opportunity to overturn the governor’s vetoes during the veto session in Jefferson City, which begins Sept. 16.

CU System briefs (07/15/2009)

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* MEMPHIS, Tenn. (7/16/09)--A former credit union executive has filed a retaliation lawsuit against the Memphis Area Teachers CU. Judy W. Bell, a former vice president of liabilities at the $528 million asset credit union, was one of five managers whose jobs were eliminated in June in a restructuring after the credit union lost $10 million in investments. Bell's lawsuit, filed in U.S. District Court last month, alleges the credit union punished her for whistleblowing after she complained to state and federal authorities about fraud, waste and violations of regulations (The Commercial Appeal July 15) … * FARMERS BRANCH, Texas ( 7/16/09)--Marty Oschner, former CEO of Goodrich Employees FCU, Port Neches, Texas, died Tuesday, according to the Texas Credit Union League (LoneStar Leaguer July 15). Oschner was a former league director who advocated the creation of the Financial Alternatives for Consumers in Today's Society (FACTS) Campaign to counter banks' aggressive actions in the courts, the state legislature and Congress. She served as the first chair of FACTS, which eventually became the FORCE Committee. Visitation will be Friday at Forest Lawn Funeral Home, 4955 Pine St., Beaumont, Texas, from 5 p.m. to 8 p.m. Services will be at Forest Lawn beginning at 10 a.m. Saturday … * ALBUQUERQUE, N.M. (7/16/09)--Ivan Roper, manager of St. Gertrude's CU in Mora, N.M., died July 2, said the Credit Union Association of New Mexico. He was 57. Roper became manger of the 600-member credit union in the small rural village after retiring from the local community college in 2000. Besides managing the $1.6 million asset credit union, Roper was active in local water rights associations. He is survived by his mother, three children, grandchildren and one brother …

How to avoid fraud with prepaid cards

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MADISON, Wis. (7/16/09)--The growing popularity of prepaid cards worldwide is offering more opportunity for fraudsters and could lead to an increase in card fraud, according to an industry executive. However, credit unions can take steps to help prevent this fraud. The fraud would take place in the form of lost and stolen cards, counterfeit cards, and theft of personal identification numbers, said Mike Urban, senior director of fraud solutions for Fair Isaac, a Minneapolis-based company that produces the FICO credit scoring system (CardLine Global July 15). Travelex is a company that offers several products to financial institutions. It offers four prepaid cards through CUNA Strategic Services:
* Cash Passport, a prepaid MasterCard issued in three versions: British pounds sterling, Euros or U.S. dollars and accepted at most ATMs and merchants that accept MasterCard debit cards. Cash Passport can be reloaded up to 24 times at a credit union or by phone; and * TravelMoney Card, a prepaid Visa debit card that offers a safer and more convenient alternative to traveler's cheques and cash. Members can use Visa TravelMoney at ATMs and merchants worldwide. Members have unlimited reload capabilities during the 24-month card life; reloads can be completed at the credit union, by phone, or online.
At present, credit union travel cards are not having real problems with fraud, Clayton Ferrill, Travelex vice president of client relations, told News Now. “While the card-issuing industry as a whole generally holds the cardholder harmless for fraudulent activity beyond their control, prepaid cards are safer than credit or debit cards affiliated with a bank account or large credit limit,” Ferrill said. “This is primarily because they hold a specific amount so any damage from fraudulent activity is limited to the balance on the card.” However, credit unions can take steps to help mitigate fraud, he added. “Prepaid cards look like and can be used in the exact same way as credit and debit cards, which is one of the reasons they are growing in popularity,” Ferrill said. “Credit unions can help their members through consumer education about preventative measures that should be taken with all card products. “There is a card-not-present scenario in which the member may be using a card for online and telephone purchases,” he continued. “Cautioning members to only use secure portals when purchasing online is always recommended regardless of the card type--credit, debit or prepaid. When ordering merchandise or services over the telephone, consumers should be aware that merchants offer protections for using their credit or debit cards for purchases.”

Suncoast Schools GTE call it quits on merger

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TAMPA, Fla. (7/16/09)--Two large Tampa-based credit unions--Suncoast Schools FCU and GTE FCU--have called it quits on their proposed merger, after extensive due diligence, they announced Wednesday. The announcement, made jointly by Tom Dorety, president/CEO of Suncoast Schools FCU, and Bucky Sebastian, president/CEO of GTE FCU, said their decision to terminate the merger discussions was mutual. The decision was "based on the determination that the potential disruption in operations to both organizations was extensive enough to outweigh the potential benefits of the merger," Dorety and Sebastian said. In March, the credit unions announced they had signed a letter of intent to pursue a merger. If a merger had gone through, it would have been the largest credit union merger in history, creating an $8 billion asset credit union (News Now March 4). Suncoast Schools FCU was chartered in 1934 and serves more than 481,020 members through 50 full-service branches in 15 Florida counties. With $5.1 billion in assets, it is the largest credit union in the state and the seventh largest in the U.S. GTE FCU was chartered in 1935 and serves 205,000 members through 38 branches in 14 counties in Florida. It has $1.8 billion in assets.

Addison Avenue FCU taps Wesabe for social personal finance

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PALO ALTO, Calif. (7/16/09)--Addison Avenue FCU plans to use Wesabe to offer personal finance insights to its more than 150,000 members nationwide. Wesabe, based in California, helps financial institutions with member relations and offers online planning and tracking tools (banking-business-review.com July 15). The $2.187 billion asset, Palo Alto, Calif.-based credit union plans to launch Wesabe’s community features--known as “Groups,” in which members can share advice and support each other. Credit unions can use Web-services architecture or a fully hosted Web personal financial management solution to implement Springboard--which gives consumers a dashboard view of their account data and personal finances to help them with their savings and financial goals, Wesabe said.

Survey reveals what CUs already knew Courtesy matters

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WESTLAKE VILLAGE, Calif. (7/16/09)--Credit unions won't be surprised to learn of a new study's conclusions that courtesy and personal service matter when consumers shop for a financial institution. In fact, they matter more than the actual products or services offered. J.D. Power and Associates' 2009 Retail Bank Shopping Study, released Tuesday, found that 36% of a shopper's decision to select a particular bank is driven by the bank's brand image. Branch proximity matters to 21% of shoppers surveyed, and products and services influence 14% of those respondents. However, the branch's employees and what they do to help--or not help--account for 15% of the importance of the shopping experience. "Some crucial aspects of a bank's brand image--such as perceived financial stability and reliability--can be difficult for a bank to improve, which negatively affect the bank's likelihood of being selected," said Michael Beird, director of banking practice at the Westlake Village, Calif.-based J.D. Power and Associates. "However, branch employees can positively impact a branch's brand image by providing personal service, communicating proactively and having a customer-driven focus. These three aspects combined account for 15% of importance in the shopping process, which is even greater than the importance of bank products and services," Beird continued. Other findings:
* One third of customers who avoid a particular bank do so because of previous poor service. Other common reasons for avoiding a bank: issues with the branch's proximity or operating hours; and poor policies--such as high rates and fees. * Recommendations from others--both positive and negative--account for 31% of the importance customers place on a bank's brand awareness. Positive recommendations drive 36% of a shopper's consideration of a bank. The study does not go into whether the recommendations are from family and friends, or also from strangers, such as bloggers. * Satisfaction with the account-opening process increases if the bank employees perform simple actions to improve the customer's experience. These include: greeting the customer entering the branch; keeping wait times to five minutes or less; calling the customer by name; and providing the customer with a detailed needs assessment. Among the 19% who experienced all these actions, satisfaction scores average 890 on a 1,000-point scale--84 points above the industry's average, said the research firm.
"Making customers feel welcome throughout the new-account process and asking focused questions targeted to their specific needs and requirements are relatively easy elements that every banker responsible for new accounts should perform regularly," Beird said. "The low percentages of customers who report experiencing these behaviors highlight improvement opportunities for all banks."

Family wins 10000 in Wright-Patt CU savings race

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FAIRBORN, Ohio (7/16/09)--After eight months of working to increase savings and reduce debt, the McClellan family of Springboro, Ohio, was announced the winner of Wright-Patt CU’s first annual Savings Race.
Click to view larger imageThe McClellan family of Springboro, Ohio, won the $10,000 grand prize in Wright-Patt CU’s Savings Race. Pictured are (from left) family members and their savings coaches: Tracy Liptak, Wright Patt Member Center district manager; Nichole Lovins, Member Center assistant manager; Luke McClellan; Kaila McClellan; Pam Turpin, Member Center manager; Heather McClellan; Ken McClellan; and Aaron McClellan. (Photo provided by Wright-Patt CU)
During the race, five local families worked with teams of Wright-Patt coaches to collectively increase their savings by $80,000 and reduce their debt by $65,000. The McClellan family won $10,000, while the four other teams--the Altings, Bledsoes, Grigsbys and Studebakers--each received $2,000 for participating. “We thought we had to live paycheck to paycheck because we always had,” said Heather McClellan. “Now we know that with a little planning and some restraint in spending, we can have anything. We can pay for our kids' education, take vacations, enjoy our life and still feel the security that comes with a nice savings account.” Community members were invited to follow the participants’ progress through blogs and news segments. Wright-Patt also offered free financial education “pit stops” to encourage area families to start their own money makeover. “The Savings Race families have proved how much you make isn’t nearly as important as how you spend it,” said Doug Fecher, president/CEO of Wright-Patt. “Financial freedom is available to every one of us, no matter our income. Not only did these five families gain financial lessons that will last a lifetime, they also learned the most valuable resource they have isn’t cash--it’s the time they spend together.” The credit union plans to offer a second Savings Race in fall. Wright-Patt, based in Fairborn, Ohio, has $1.4 billion in assets.