Lorillard Federal Credit Union ($34.6M, Greensboro, NC) now ranks among the top five credit unions in the country for 12-month growth in average member relationship. The credit union, which grew loans by 30.4% in the second quarter, took a three-pronged approach to get there. It trained employees to inform rather than sell, it began offering two loan products to accommodate members’ credit needs, and it added full services to one of its branches.
Lorillard FCU falls behind only St. Thomas Credit Union ($25.2M, Nashville, TN), Florida State Employees Federal Credit Union ($39.5M, Pensacola, FL), Eddy Federal Credit Union ($56.3, Carlsbad, NM) and Darden Employees Federal Credit Union ($25.9M, Orlando, FL), according to Callahan & Associates’ 2013 Credit Union Directory. Its loan growth in the second quarter was 30.4%, driven by credit cards and unsecured loans, which were up 47.7% and 20.3% respectively. Its “other loans,” which include 90-day seasonal promotions, increased 36.3%, from $3.9 million to $5.3 million.
“We’ve done a lot,” says CEO Patti Weber. "Evidently it’s starting to pay off."
Lorillard FCU wanted to improve its training and focus staff on product education rather than the hard sell. So the credit union began offering training courses that helped staff go into more detail with the products and helped them underscore how the products benefit members.
Lorillard FCU, with nine full-time employees and two part-time employees, is leveraging the online training modules from CUNA Mutual and is offering monetary incentives to employees who go beyond the required course load. Employees learn how to better inform members about the benefits of products like GAP insurance and are trained to recommend products like overdraft protection or debit cards when members open checking accounts.
“We want to make sure we’re meeting all of their financial needs,” Weber says. “If members see more benefit in the products, they’re more apt to use the products.”
Lorillard FCU also wanted to improve its loan portfolio. So it first turned to its own membership, specifically the members it had already denied, for lending opportunities. It looked at the loans it had turned down and sought ways to help those members and, as a result, created two new types of loans — one that helps members repair credit and one that helps members build a credit history.
LORILLARD LOAN ACCOUNTS PER MEMBER
Data As Of June 30, 2012
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Generated by Callahan & Associates' Peer-to-Peer Software
Members with poor credit or little credit history can apply for loans starting at 14% APR, but the rate lowers after six consecutive timely payments. Loans start at $500 for those with truly damaged credit histories and can increase to as much as $2,000 as their payment history is monitored. Weber says the new loan products are generating more loyalty with members, who see the credit union is making an effort to work with them. The credit union launched the new loans in January and has since made a total of 17 of the loans, totaling about $25,000.
"Those 17 members we have been able to help are extremely grateful and loyal to the credit union," Weber says.
Lorillard FCU increased its total loans by 12.9%, from $10.0 million in the first quarter to $11.3 million, as its total delinquent loans decreased 46.4%. Its net charge-off rate declined 168% and fees and other operating income increased 26.1%.
Lorillard FCU acquired North State Telco Credit Union in March 2011. At the time, Lorillard had $17 million in assets and NSTCU had $10 million, which created a $27 million credit union. Assets have since grown to $35 million.
Building on new products and fully trained staff, Lorillard FCU improved member relationships by expanding one of its three branches to a full-operation facility. Its main sponsor is Lorillard Tobacco Company but it also serves 14 other SEGs. When the credit union branch inside Lorillard’s tobacco plant expanded to full cash operations, the credit union welcomed more business from that location, Weber says.
Finally, Lorillard FCU has reached out to the community to encourage more member involvement. In April, the credit union’s annual golf tournament raised $10,000 for Duke Children’s Hospital & Health Center and $10,000 for its scholarship fund, which benefits members.
Next summer Lorillard will move its High Point, NC, branch to a new shared service center location. It plans to make the branch more convenient for itself and other credit unions by offering a drive through and ATM, the credit union has neither at its current High Point office, and add additional transaction income.
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