On May 1, the Washington Post ran an article demonstrating that, when historically adjusted for inflation, this spring's gas prices have not risen as drastically as perceived by the average consumer. But as any movie star, politician, or business figure will tell you, perception matters.
Gasoline usage during the price peak in 2008 constituted roughly 4.3% of the average households spending, coming in just under entertainment and health care. But couple this summer’s hikes with rising food costs, insurance premiums, educational costs, and other factors, and consumer tempers begin to flare.
Credit unions can affect their membership’s lifestyle, and although no institution can push a consumer into an energy efficient car or home or onto two wheels, high prices can. According to an April survey from Kelly Blue Book, gas prices have influenced 84% of car shoppers' purchasing decision. If prices rise to $5 a gallon, that percentage is predicted to rise to nearly 92%.
This bodes well not just for car markets in general but for new car markets, which slumped for cooperatives throughout 2010. Many credit unions now offer discounts for hybrid vehicles, which are often purchased new, but depending on the standards used for qualification, members can apply low rates and discounts to the purchase of used fuel efficient vehicles.
For example, University of Hawaii Federal Credit Union ($515M, Honolulu, HI) offers a 1% discount on its auto rates for vehicles that get more than 30 miles per gallon, and Arizona’s Pima Federal Credit Union ($256M, Tucson, AZ) offers an 1.25% discount for EPA Green Auto SmartWay and SmartWay Elite vehicles. But what about members who don't have new autos in their future?
National Bike Week is over, but biking is becoming a popular hobby and primary form of transportation for a significant number of Americans.
Many cooperative institutions offer bike loan programs that help cover the initial investment of a quality bike and equipment. These programs tend to represent small-dollar loans from the credit union’s perspective, but they open the door to valuable community and business relationships.
Unitus Community Credit Union ($840M, Portland, OR) partners with local retailers to offer bike and equipment loans ranging from 6.99% to 7.49% APR, with members who have checking, direct deposit, eStatements, and automatic payments qualifying for lower rates.
The credit union will lend as much as $3,000 for terms ranging up to 24 months, and the funds are immediately available. It's a niche product for a niche markets, and the PR associated with it has helped Unitus attract new members as well as new opportunities to sponsor bike events, donation campaigns, and other partnerships within one of Portland’s tightest knit community groups.
The bicycle business, along with the municipal funding for projects linked to their use, is big business these days. Portland’s $600 million 2030 bicycle plan is the culmination of a variety of initiatives with the ultimate goal of having 25% of the city's resident’s making daily trips on bikes, reports The Christian Science Monitor. Similar multi-million dollar projects are springing up around the nation.
To date, 24 states allow public entities to deposit their funds with credit unions, and connections to the green movement in these communities may help put cooperatives ahead of the national financing competition.
Apps and Web Resources
Credit unions are making free mobile banking and branch locator applications an industry standard. The industry is evolving with the changes in consumer preference and discovering new ways to leverage technology for education and cost savings via virtual channels. Randolph-Brooks Federal Credit Union ($4.3B, Live Oak, Texas), for example, has introduced an iPad app.
Filene’s i3 group uses cooperative talent for its leapforgreen.com website, which provides tips on how to better utilize green and efficient solutions and allows members from trial institutions to see the financial implications of their decisions. Whether it’s through education and communication or technological convenience, high tech is the right tech for credit unions seeking a green image.