In a “Shark Tank” themed showdown this year, several credit union CEOs presented member engagement ideas that contained a “wow” factor. One cooperative, Opportunities Credit Union ($37.0M, Winooski, VT), presented on its aptly named WOW Auto that is loan aimed at car owners who are underwater in their loan. Borrowers can secure a WOW loan for up to $30,000 on a 2010 or newer vehicle that’s worth at least 70% of the loan amount. The new loan requires a checking account and direct deposit, and, depending on prior payment history, might also require financial counseling from the credit union.
Diamond Lakes Federal Credit Union ($67.3M, Malvern, AR) presented on its Wheels to Work auto loan promotion. The promotion is basically a remarketing of the credit union’s standard auto loan with more than 20% of loans going to C, D, and E tier borrowers. This gives the LICU and CDFI credit union strong loan yield and a lot of drivers in the credit union’s rural six-county FOM a new lease on their work life.
Caprock Federal Credit Union ($30.2M, Lamesa, TX) has gotten creative in helping repair the credit of many of the estimated 60% of its membership that are single mothers with three or more children at home. The credit union lets its members use their earned income tax credit as the basis for a loan that the credit union then uses to pay off other debt owed by that member.
The process of credit repair can take two or three years, says Caprock president and CEO Dale Hansard, and the credit union has a running portfolio of $300,000 to $400,000 of the loans.
“A lot of these small credit unions are doing awesome things,” says Stephen Nelson, vice president of credit union support at the Utah Credit Union Association. “They may feel like underdogs, but they show how a little creativity can go a long way.”
That's the same story for at least one of the suppliers that attended the roundtable, a young entrepreneur who cut his teeth in the movement as the CEO of the 3,500-member Georgetown University Alumni and Students Federal Credit Union ($17.0M, Washington, DC). Nikhil Lakhanpal’s experience heading up student-run cooperative convinced him there was a better way, and opportunity, for a new entry in the digital banking industry.
Lakhanpal is now a co-founder of Narmi, a developer of mobile and online banking software that he co-founded in New York City with Chris Griffin, his CTO at GUASFCU. Agile use of consumer data is at the heart of what Narmi does, and that’s true of many of the other better-known suppliers on hand at GAC.
This year’s buzzword, according to a quick tour of the exhibit floor Sunday night, appears to be AI (artificial intelligence).
Last year, it was machine learning.
Next year it likely will be another iteration of using advanced data analytics to better target member needs via a credit union solution.