Six Considerations for Community Charters

Many credit unions look at the rosy side of community charters without giving much consideration (if any) to these significant brand-level consequences.


Many credit unions look at the rosy side of community charters without giving much consideration to these significant brand-level consequences.

1.  Lost focus
At one point, every credit union knew exactly who they served and why they existed, concentrating on the unique needs of a very specific audience. But community chartered credit unions often make the mistake of targeting “all people 18-55 with money and a pulse.” The bigger your target audience, the harder it is to find a unique value proposition. What’s the lowest common denominator? Rates and fees.

2.  The old name won’t work
If your credit union’s moniker includes a company name or word like “Employees” or “Teachers,” you will never convince the community that “everyone can join.” Adding the word “Community” to your name doesn’t work either. And you can’t go with an acronym, because every possible combination is already taken by a dozen other credit unions.

3.  Estrange your sponsor
To your original sponsor, a community charter can be a slap in the face. It may look like you’re deliberately trying to distance yourself from them. As you change names and market to the general public, the feeling you were a “special club” disappears right along with that exclusive access you had to your sponsor’s employees.

4.  Massive marketing muscle
Building a mass-market brand and generating name awareness takes a lot more than newsletters and postcards. It's a whole new level of marketing -- TV, radio, online -- along with a shocking new budget.

5.  Cooperation becomes competition
Don’t be surprised when your pals at the credit union down the street give you the cold shoulder. You are, after all, trying to poach their members now.

6.  Fuel for the ABA
The ABA opposes all forms of credit union expansion. Each new community charter fuels their fight for taxation: If every credit union had a community charter, then why shouldn’t they be taxed?