Is My CU Safe?: Tools to Ease Member Concerns

Due to the high profile failures of financial institutions, members are asking a new question. The question: ‘Is my credit union safe?'. How can you help members understand that the credit union is a safe and sound financial institution?

 
 
Q: Is my credit union safe?
A: We’re safe, sound and ready to serve!

In normal times, the most common member questions at a credit union branch or call center are ‘What's my balance?' and 'What are the credit union's hours?'.

Due to the high profile failures of financial institutions, members are asking a new question. The question: ‘Is my credit union safe?'. Last week an NBC affiliate in Washington, D.C. gave a news report explaining how consumers can find out if their bank or credit union is in danger. Even Callahan & Associates employees have been asked questions from consumers about the safety of local credit unions.

How can you help members understand that the credit union is a safe and sound financial institution? What information can you provide to your employees to help them communicate the safety and soundness of the credit union to your members?

Some credit unions are using messages on their website, in their branches or in their newsletters. Agriculture Federal Credit Union in Washington, D.C. has a message their website that says, "Your money is safe and sound with Agriculture. We consistently receive the highest rating for safety and soundness by the National Credit Union Administration."

At Service Credit Union in New Hampshire, a message on the website says "Service Credit Union is strong, secure and responsible. Your money is very safe at Service Credit Union where our members have never lost a dime, but have prospered through their wise saving and prudent, conservative investments and borrowings. Service Credit Union is an insured financial institution through NCUA."

Safety and soundness at the credit union can be communicated by the fact that your credit union is insured by the National Credit Union Administration or American Share Insurance. Indymac customers were also insured. Your goal is to alleviate any fears that your members may have about your credit union. Explaining credit union financial results in a way that is meaningful to members can help.

The credit union financial results can be a method that your front line employees can use to communicate the fact that your credit union is safe, sound and ready to serve. According to the June 2008 First Look data from Callahan & Associates, the average credit union has very low loan delinquency, growing net worth and is originating more loans than ever before.

Safe

Callahan & Associates First Look data shows that loan delinquency remains well below delinquency levels at other types of financial institutions. The June 2008 First Look data for credit unions shows that less than 1% of credit union loans are delinquent. Using the glass is half full approach to credit union loan delinquency, this means that 99.09% of all credit union loans are paying on time as of June 30, 2008.



Sound

Credit union net worth, as a dollar figure, has increased to its highest amount ever as of June 30, 2008. Net worth at the average First Look credit union is 5.4% higher than it was one year ago. Explaining that your credit union continues to increase reserves, as a dollar amount, can be meaningful to members.




Ready to Serve
While other types of financial institutions have pulled back on lending, the average First Look credit union originated more loans in the first six months of 2008 than ever before. Loan originations for the average 1st look credit union is up 10.2% over the same point in 2007. The average First Look credit union is ready to serve and finding ways to add value to members' lives.




To get information on your credit union's performance as of June 2008 using Callahan's First Look program contact Claire Dayrit at 800-446-7453.
 

 

 

Aug. 4, 2008


Comments

 
 
 
  • Timely and appropriate information...thanks
    J Callis, EVP COO