City-County Uses Their boom! Program to Attract Younger Members
One of the largest challenges facing the credit union industry today is attracting a younger membership. The graying of the movement is no secret, and the average age of a credit union member has now edged up to 47. Credit unions are consistently asking "how can we make ourselves relevant to younger generations?"
City-County Federal Credit Union answered this question when they started an initiative aimed at young adult members in 1999. The boom! program has 6,145 members as of April 2008.
It provides a place for young members to get the financial services they need to get started including:
Share Membership and Savings Accounts for as little as a $5 deposit.
Special Certificates of Deposit with a minimum of $250 for a three-month term, plus additional deposits of $25 or more.
Frills Free Checking with an initial $50 deposit that includes no monthly fee, no minimum balance requirement and no per item fee.
ATM/Debit Cards with a daily withdrawal limit of up to $65 for members 13-15 (joint owner required); $100 daily limit for members 16-17 (with a parent or guardian's permission); and up to $200 per day for member 18 and over.
Visa Accounts with an initial $250 credit line for boom! Club members 16-22. (Members 16-17 must have a parent/guardian's permission.)
Annual Scholarships: $1,000 awarded in each of the following three categories: 4-year institution; 2-year institution; and vocational/technical/training institutions.
- Regularly scheduled financial literacy education, advice, and information sessions
Two important components of the boom! program are the youth debit card City-County began offering in 1999 and a youth credit card launched in 2001.
boom! Credit Card:
This card is offered to boom! program members who are age 16-22 and do not have a credit history (those under the age of 18 must have a parent or guardian's permission). This card helps younger members build credit and starts out with an initial credit line of $250. As of April 2008, 724 members carry the boom! card.
The youth offering initially was a specialized card with its own unique design, but this was changed two years ago. The boom! card is now a platinum Visa card that gives the holder all the benefits any platinum member receives. The only difference between the boom! platinum card and any other is the lower credit limit. City-County has received a good response about the boom! platinum card since switching over. The credit union has found that many boom! cardholders find the 'platinum' card prestigious and appealing.
boom! ATM/Debit Card:
This debit card is available to the youngest members of the boom! program and allows parents to set up controls on the account. As of April 2008, 1,511 members carry the boom! debit card. According to Lonna Schindler, AVP Card Services at City-County, "These days, there are ATMs and financial institutions in high schools. The debit card with parental controls is a great way to teach younger members how to responsibly use this technology." City-County also strives to provide their members with a wide range of access points and is a member of the Allpoint and Co-Op networks.
The debit card had its own unique boom! design for many years, but the credit union eventually concluded that the design didn't particularly resonate with some cardholders. The design was phased out, and they are currently issuing a standard design in the interim period before their newest option is available. In June 2008, City-County will allow their members to choose the design on their debit cards. Members will be able to select from a wide variety of designs or upload their own digital images to appear on the card. The initial customization will be free, and they are very excited to offer this option to their members.
boom! Financial Literacy Education
To complement their youth product and service offerings, City-County places a large emphasis on financial literacy education. The credit union hired Tiffany Kirk as a full-time education specialist in 2006. Tiffany speaks at local schools, classrooms, businesses, and community events. They reach hundreds of young adults through their partnership with the Minneapolis Youth Program. This is a state-funded program that provides short-term employment and training to disadvantaged youth between the ages of 14-21.
This relationship began in 2003 when the credit union approached the city government about providing direct deposit services to their employees. City-County uses the relationship to teach these young adults about financial responsibility. They get to interact with hundreds of young adults from this program each summer in addition to their other financial education initiatives.
boom! Training Sessions
City-County also offers a very successful series of four boom! training classes at their central office. The classes are open to 13-22 year olds who are CCCU members (they have to open an account by the end of the second class). As an incentive for attending all four classes, the credit union will deposit $100 into their share account upon the completion of the fourth class. The courses are offered every quarter, and participants receive the incentive long as they complete the series before they reach the age of 23.
Each class is limited to 25 attendees and participants must RSVP over the phone or online. They receive a postcard in the mail about upcoming classes, dates, and locations and this information is also posted online. After the participants are notified, the courses fill up almost immediately.
Since 2006, when these classes began, 511 individuals have attended the boom! training classes and 222 have successfully completed the entire series! According to Lonna Schindler, "If you teach kids how to be financially responsible, they won't bounce checks and default on payments in the future, and this will actually save the credit union money in the long run." City-County has found that the $100 incentive is a small price to pay for directly interacting with and cementing their relationship with younger members.
City-County largely avoids traditional marketing channels to promote the boom! program or youth products and services. Most of the promotion for the youth offerings comes from the educational seminars and staff members out in the field. The products and services are incorporated into the financial literacy education, and staff members carry application materials with them. One strategy that the credit union follows is targeting parents as a path to reaching their children. They have found that the majority of their boom! program members are initially registered by their parents. Once they are a member of the program, they will receive a newsletter and postcards from the credit union.
City-County's success in reaching youth is certainly reflected in the composition of their membership. The average age of a credit union member nationally has crept up over 47.1 The average age of a City-County member is 40, which is low for the industry. 20 percent of their membership is 22 years old or younger and 40 percent of their membership is 35 or younger. With their young membership, City-County has positioned itself well for the future!
Schindler has this advice for credit unions that are trying to appeal to younger individuals: "You have to be committed! Get out there and introduce yourself to the community. Find out if your city has a youth workforce. Approach youth groups and community centers that work with children. If you can find a way to just spend some time with them, you will be able to help them understand how finances affect their lives, and help them to initiate their fist financial relationships. If you are successful, you stand the chance of creating life-long member relationships."