International Credit Union Day 2018 Giveback: American 1

On the platinum anniversary of International Credit Union Day, CreditUnions.com looks at how different credit unions return value to members to showcase the credit union difference.

 
 

Two years ago, American 1 ($340.8M, Jackson, MI) launched its first member give back. Members received slightly more than $1 million in the form of loan interest rebates and bonus dividends. This year, the credit union upped the ante.

Laura Pryor, VP Marketing & Communications, American 1 Credit Union

In January 2018, American 1 announced a giveback of more than $1.5 million, besting its previous year’s total by more than 50%. The credit union returned nearly $900,000 in loan interest rebates to members, with the average member receiving $150. In addition, it deposited a bonus dividend of nearly $700,000 into members’ saving accounts.

Here, Laura Pryor, the credit union’s vice president of marketing and communications, talks more about the program.

How does the credit union determine it can pay a dividend?

CU QUICK FACTS

American 1 Credit Union
Data as of 06.30.18

HQ: Jackson, MI
ASSETS: $340.8M
MEMBERS: 57,776
BRANCHES: 15
12-MO SHARE GROWTH: 3.8%
12-MO LOAN GROWTH: 7.9%
ROA: 2.15%

Laura Pryor: The American 1 Credit Union member give back is based on our strong ROA and net worth. After many years of strong performance, we ran financial scenarios to understand the impact of giving back varying amounts. The past two years we gave back $1 million and $1.5 million to members in the form of bonus dividends and loan interest rebates.

How do you calculate how much to return and to whom?

LP: We establish our give back goal at the beginning of the year based on current and projected performance. We run scenarios to project impact and make a decision.

 

 

 

What is the advantage of returning value in this way?

LP: We include every member in American 1’s giveback. As a membership organization, we exist to serve all members. Therefore, every member shares in the benefit of our give back when our performance is strong. However, we do not limit our give back to a bonus dividend.

What communication channels do you use to announce and communicate the value of the dividend?

LP:  In the past, our give back has been a 50% rebate on loan interest for the year and a bonus divided. We post the loan interest refund in January, but American 1 communicates our member give back throughout the year using all channels.

In 2018 we decided to give back in a different way: each quarter. This keeps the give back message fresh all year. We’ve associated a share of the give back with members who use us for their loan needs. Lending drives our ability to give back, so those who borrow with us have the best opportunity for the biggest give back.

We use the member give back messages in phone conversations, email, statements, newsletters, and social media. We do some traditional advertising as well. The most important and effective communication tool is always branch staff. Our staff is fired up about the ways our members can earn a give back, and they talk with members about those opportunities.

How do you return the dividend? How much did you return in your latest round?

LP: All give backs are posted to members’ share accounts.

This interview has been edited and condensed.

Whether and when a credit union offers a patronage dividend varies across organizations. As does how they calculate the return and communicate the occasion. Read more Q&As from CreditUnions.com’s ICU Day special feature.

 

Oct. 15, 2018


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