While many consumers still see credit unions as small financial institutions that offer a narrow range of products, such as basic savings accounts and auto loans, the expansion of products and services embraced by credit unions today is much broader. Although there are still a few credit unions that offer only the basics, they are in the minority. Many have blossomed into offering a wide range of products, including business services, financial offerings such as insurance and annuities, and a variety of mortgage loan products.
For example, Icon Credit Union expanded its mortgage department last year, contributing to an increase of more than 100 percent in originated loans this year. Many consumers don’t realize that credit unions now offer full mortgage products, including FHA, VA, 30-year conventional mortgage loans, and low-cost home equity lines of credit (HELOCs). Many come with lower rates, fees, and faster turnaround times.
In order to be competitive and be known as full-service providers, credit unions realized they had to beef up their mortgage offerings. Even more important, consumers are enjoying the local decision-making and continued servicing after the loan is made. This is what credit unions do best. Members are enjoying going to the same place their loan was originated to make their payments and obtain local advice. Credit unions know their members and can tailor mortgage loans to the borrower’s needs, often better than at other institutions.
The new “hot button” demanded by consumers today is business services. They are turning to credit unions to fulfill their business needs not being met by other financial institutions, and it is a natural transition. Icon is not alone in having small business owners anxiously asking for business services. Therefore, we are ramping up our efforts to offer an expanded suite of business products later this year.
Although many credit unions have offered business services in some form since 1906, more are stepping up to the plate and adding the expertise and technology to meet the increased demand, including deposit services, SBA loans, and more affordable lines of credit. Credit unions are filling this need with what they do best; they are finding that niche in serving the small business owner locally.
Credit unions are not-for-profit financial cooperatives owned by their members, and that cooperative nature is becoming more compelling as they move forward. Some credit unions are combining forces by joining credit union service organizations (CUSOs), allowing them to offer expanded services that may not otherwise be possible.
Icon recently joined forces with other credit unions in adding the financial adviser platform to its array of services to assist members with investment, annuity and insurance options. Members have responded very positively to the increase in expertise available.
The industry is even seeing credit unions offer alternatives to get members out of the payday lending cycle – just one example of the value of this “people helping people” industry. You will see credit unions offering more today in the way of financial education to help consumers make wise financial decisions for their future, such as budgeting, understanding credit scores, and planning for college.
Credit unions face two key challenges today in consumers’ minds. The first is getting consumers to see beyond the perception that credit unions are more than simplistic financial institutions.
The second challenge credit unions face is that consumers believe it is difficult to join a credit union. Many credit unions have changed their field of membership qualifications so a broader population may join the credit union to receive the benefits. For example, Icon has changed its field of membership qualifications over the years from the Idaho Transportation Department, as its original employer group, to those who work or have families in several counties, such as Ada and Canyon counties in the Treasure Valley area, to name a few.
Next year, Icon will be celebrating its 60th anniversary in Idaho and certainly, like most other credit unions, we are much more relevant to the average consumer today. Credit unions are recognizing the value of sharing their story so consumers can discover what they have to offer, experience their expanded product offerings, and build consumer confidence.
Consumers are finding credit unions to be pertinent solution providers for all their banking needs. In 2010, there were 59 credit unions in Idaho with 538,000 members, and they’re growing stronger each day.
This column was written by Connie Miller, president and CEO of Icon Credit Union, headquartered in Boise, with $140 million in assets and 14,000 members.