Growing Younger Members, One Branch at a Time

A number of credit unions are fulfilling their mission of service and combating the declining rate of industry member growth by rapidly expanding in-school branching programs over the past few years.


Despite a steadily expanding membership base, the credit union industry continues to experience a declining rate of membership growth. 

Fortunately, many credit unions are working hard to reverse the trend and are consistently developing promising new avenues for member growth. One such strategy that has been growing steadily over the past few years is in-school branching.

In-School Branching Soars
According to CUNA, there are currently 200 credit unions that report operating student-run branches in more than 700 elementary, middle, and high schools nationwide. [1] As recently as 2001,  only 58 credit unions operated 191 of these branches, so this movement has clearly experienced a surge of popularity in the new millennium. [2] The trend seems to be picking up steam, as the number of credit union in-school branches increased 27 percent in the first eight months of 2008 alone! [1]

According to CUNA research, a single student-run branch can cost between $700 and $25,000 per year to operate depending on branch setup and hours of operation. [1] In-school branches rarely turn a profit, but this is not their ultimate goal. The primary motive for operating a student-run branch is often to provide much-needed financial literacy education to children.

In addition to valuable education for the student population, credit unions also use these branches to successfully increase their reach among young potential members and nurture relationships that they can continue to develop over time.  Such branches build trust and provide a very visible anchor in local communities.

At the rate in-school branches are expanding it is reasonable to assume that credit unions that participate in student-run branching are producing important benefits far beyond what can initially be measured on a balance sheet. Let's take a look at an example: 

CP Federal Credit Union
, ($307 M) Jackson, MI, uses a wide variety of approaches to reach younger members, including an extensive student-run branching network. After opening their first in-school branch in 1991, the program has since expanded to include 42 local branch locations. Twenty are located in elementary schools, 7 in middle schools, and 15 in alternative, vocational, and high schools. Each branch is open one day a week and credit union representatives also provide a wide variety of age-appropriate financial education in each school throughout the year.

CP Federal representatives work on financial fundamentals in elementary schools, introduce students to the difference between credit unions and other financial institutions and lay the fundamentals to influence the young to start saving. Susan Young, Senior Youth Representative at CP Federal explains, "We have seen much success from our youngest members, who are the most attentive because they are so eager to learn! It is a misconception that high school is the earliest point where financial literacy education can be utilized."

The credit union is reinforcing their outreach by recruiting student youth advisory boards, which help them determine what types of financial services, approaches, and messaging appeal to different age groups. They approach each age group differently and offer a wide variety of products to appeal to younger members such as: a controlled, introductory checking account for elementary school students, debit cards to interested students who are at least enrolled in 5th grade, a student credit card for young adults, and a weekly rewards program for all age groups.  Each week that a young member makes a deposit, they receive a 'punch,' and these can be redeemed for a variety of rewards that are appropriate for each age group. This system is designed to introduce youth to the idea of delayed gratification and enhance the habit of saving.

During the previous school year (September '07-May '08), 713 new accounts were opened through the program, spread among the 42 locations. CP Federal began tracking retention rates 6 years ago, and found that 75 to 82 percent of previously underage members continue to maintain their accounts with the credit union after they turn 18. According to Young, "The key to this retention is earning the member’s trust when they are young; this will be repaid with loyalty in the future."

Student-run branching programs help credit unions fulfill their service mission by providing hands-on financial literacy education to children and introducing the organization to young members that they might not have otherwise reached.  To-date, the credit union industry has a far greater presence in K-12 schools than other financial service providers, but banks such as Wells Fargo and SunTrust, starting to realize the potential marketing opportunity in these types of programs, have begun to offer in-school branches of their own.  Hopefully, the growing credit union emphasis on these initiatives can begin to increase the rate of membership growth within the segment that is most critical for future success…today's young potential members.

More Info
To learn more about in-school branching or other credit union programs that are successfully attracting younger members, please join us for the Callahan webinar event: Investing in the Future of Your Credit Union: Why Youth Programs are Vital.


[1] CUNA article, CUs Mark New Milestones at In-Schools-Branches. August, 27, 2008.
[2] CUNA article, CUs Break Record with Student-Run Branches. January, 9, 2006.