SMALL CREDIT UNIONS ROLL OUT BIG CARD PROGRAMS

Four of Delaware’s small credit unions are rolling out card programs that previously only larger credit unions could afford to offer. Wilmington Newspaper FCU ($6M) is now issuing credit and debit cards to their members through the League’s Apollo Credit and CU Check/CU Cash card programs. These programs, which are processed by Certegy, are administered by the Illinois League. The Delaware League has a special arrangement with the Illinois League to market these programs to Delaware credit unions. “Several credit unions, like Wilmington Newspaper, have had share draft accounts but have been waiting a long time to begin a debit card program. Finally, we are able to offer one that is priced and structured especially for the smaller credit union,” states Jane Bailey, executive vice president of the Delaware League. Wilmington Newspaper is also introducing a credit card program. “We hope that the income earned from the credit card program will more than offset the expenses of our debit card program,” says the credit union’s assistant manager, Meredith Jeffries. “We are very excited about providing these services to our members.”
            Wilmington Postal FCU ($9.6M) will be training their staff on their new debit card program in August.  “Our members have been asking for share drafts and debit cards for quite some time. We are so happy that we can finally offer these services,” states manager Susan Winward. Nancy Gregory, manager of Pipefitters FCU  ($7M), is hoping that their new debit card program is as successful as their credit card program is. “We earned more income from our credit card program than we anticipated. I think our debit card program will do great, too,” she says.  G.C.B.A. FCU ($3M) will be rolling out their new Apollo Credit card program in the fall, just in time for holiday purchases.
             For more information on these card programs, contact Jane Bailey at (302) 322-9341, (800) 292-7875 or jane@dcul.org.

Directors’ Digest:
“Specific Board Responsibilities—Part 5”

Borrowing – The credit union may occasionally experience a need for extra funds. This may be due to heavy loan demand, seasonal cash shortages, or external factors such as sponsor strike or layoffs. Borrowing is one way a credit union can raise extra money and smooth out the peaks and valleys of cash supply.
             There are several sources from which the credit union may borrow. Your corporate credit union is an obvious choice. But regardless of where you seek to borrow, it will be easier to do if you have established a solid relationship with the institution. A record of steady deposits at your corporate, for example, will make your next loan easier to come by.
             The Board should have a written policy to govern borrowing and to control the details surrounding it. The policy should include interest rates, prepayment terms, and the authority of committees or employees to participate in the borrowing activity.
             Insurance and Bonding – Providing for adequate insurance and bonding is a basic Board responsibility. Without proper coverage, your credit union may be open to serious legal problems.
             Officers and employees who handle funds must be bonded. The extent of bonding is determined by the board of directors and by regulatory agencies. Directors must review, at least annually, the existing bond coverage. If it is inadequate, your duty is to obtain more. For a federal credit union, the surety bond coverage must be a type approved by the NCUA.
             The board is responsible for seeing that each employee is aware of their obligation to reimburse the credit union for losses caused by dishonest or negligent conduct. In most cases, bonding only protects the credit union from damage performed by the official or employee. The bonding company may take action against the official or employee of the credit union to recover its costs of paying the credit union claim.
             Directors must determine that the credit union has adequate insurance to cover the effects of fire, natural disaster, liability, etc.

This article is from the Board of Directors:  Duties and Responsibilities module of the Volunteer Achievement Program (VAP).  Call Bernadette Hines, at the League office, for more information about this program.

    DELCU Financial Services, LLC, in partnership with INATrust, fsb, is making trust services available to your credit union members. Personal trust services is a product that federal credit unions are prohibited from offering directly. But, now through the CU Members Trust Servicesã, your members may take advantage of personal trust services.             

With a trust, your members can: 

·         Set aside assets for young children or family members who may not be able to manage financial matters.

·         Minimize tax liabilities and simplify record keeping.

·         Protect assets from claims against their estate (divorce, malpractice, creditors) and minimize probate.

·         Manage their investments and financial affairs after their death or in the event they become disabled.

Your members may establish a trust with as little as $250,000 of investable assets (including real estate, investments, life insurance, etc.). Once their trust is established, the member controls how their assets are invested. In addition, the fees are considerably lower that those charged by other trust firms.
            The DELCU Financial Services, LLC, Trust Program is available to offer for only a $50 monthly administrative fee and the cost of the marketing materials, if you choose to order them.  In addition, each trust that is written and renewed annually earns income for your credit union.
            Let your members know that you are looking out for their financial future.  There is no need for them to go anywhere else for financial services.
             For more information on the benefits of trust services for your credit union and your members, contact Bob Walls at the League on (302) 322-9341, (800) 292-7875 or bob@dcul.org.

Supervisory Specifics
Annual Audit Work Program 

The word audit means different things to different professionals. To a CPA, a certified audit is a review of financial statements and the underlying records for the purpose of expressing an opinion that the statements constitute an adequate presentation of all financial disclosures. The resulting “unqualified opinion” merely attests that a credit union’s financial statement and the records give a complete picture of the financial strength and the stability of the credit union.
             To the supervisory committee, on the other hand, an audit is a means to help ensure the security of members’ savings and provide a practical way for members to check the accuracy of reports received from elected officials.
             More specifically, the credit union audit is designed 

This article is from the Supervisory Committee:  Duties and Responsibilities module of the Volunteer Achievement Program. 

TIPS FOR FINDING A MENTOR
From CUNA Mutual Group

Mentoring can help smaller credit unions offer their members more products, secure free help during shortages, add new technology, develop effective marketing, and achieve much more than they could alone—all while maintaining their own identity with members.
             Here are some tips to help you find the right mentor and to develop a productive mentoring relationship, based on successful cases we’ve seen.

Objectives First

·          Define your credit union’s objectives for a mentoring relationship.  What are you most interested in achieving from such a program?

·          What specific operational strengths and skills should your ideal partner credit union bring to the table?

·          By identifying your top needs right away, you’ll be much better positioned to find a good match.

Starting Your Search

·          Your league is a good source of leads about other credit unions interested in mentoring.

·          Approach this process as if you were interviewing job candidates.

What To Look For

·          A credit union with the specific skills and strengths you need most.

·          A candidate that is truly interested in helping you and not in absorbing your membership.

·          Good personal chemistry with the CEO and other top management.

·          Someone you feel comfortable treating as a sounding board, feeling that you could confide in that person occasionally.

·          Sometimes it helps to find a mentor that uses the same data processor or whose staff are familiar with your system, especially if you plan to use their help during staff shortages.

What To Remember

·          You remain in control of the matchmaking decision and of the mentoring relationship.

·          The relationship is based on your agenda and your objectives on behalf of your members.

·          Members might be using services or technology provided by the larger credit union, but their actual relationship is with your credit union.  The new products offered via the mentoring arrangement should appear to be coming from you.

·          You actually bring something to the table, too.  You offer the larger credit union a chance to give its employees some exposure to the workings of a small credit union.  Some large CU managers see this as a great training experience for their staff.

What Mentoring Can Help You Accomplish

Here are some of the things successful mentoring has produced for smaller credit unions:

·          Offering new services, such as home mortgages, share drafts or debit cards, by piggybacking on the larger credit union’s program.

·          Leveraging the larger credit union’s advertising program to obtain marketing materials for your members.

·          Staff fill-in during vacations and other occasions.

·          Assistance with strategic planning process.

·          Vendor relations (purchasing power, troubleshooting, etc.)

·          Assistance with policy language.

·          Back office support functions (accounting, reports, etc.)

·          Training and education.

·          Website design.

·          Loan participation.

Contact the League for more information on mentoring.

CREDIT COMMITTEE CONVERSATIONS

Eligibility For Credit Union Loans 
            Credit unions are established for the benefit of their members; thus, only members may borrow. Membership is limited to groups having a common bond of occupation or association, or to groups within a well-defined community. Organizations are also eligible for membership, usually when their participants fall within a common bond. If bylaws permit, credit unions should encourage family membership.
            Only individuals (not organizations) qualify for consideration for a loan if they have been accepted for membership, have paid their entrance fee (if any), and have purchased their first installment on a share. The board of directors will determine how soon a new member may borrow from the credit union. This policy must be reasonably related to creditworthiness. For example, a policy of making no loans to new employees during an employer’s ninety day training or orientation period would be reasonable, whereas making two years of employment a prerequisite would not. 

Need For Loan Policies
             Policies will guide you in your decisions, enabling you to act consistently and promptly in judging loan applications. When the need for further definition in matters such as loan officer appointments, lending limits, and collateral becomes apparent in the course of the Credit Committee’s work, the board should be informed so revisions can be made. In this way, you will ensure that members receive the most efficient loan-granting service at all times.

For more information, see the Credit Committee:  Duties and Responsibilities module of the Volunteer Achievement Program.

 
Education Opportunities

NEW!

            Valerie Hughley, CU Consultant for the League, will be offering credit unions specialized training courses designed to enhance their professional skills. These economically priced courses may be held at individual credit unions or as group sessions at the League office depending on the credit union’s preference and staff size.  (For smaller credit unions a group session at the League is more practical.) 
                Below is a listing of the course titles and a brief course description.  For more information on any of the sessions, contact Valerie at cuconsultant@hotmail.com.  For scholarship information, contact Alice Smith at the League – info below.

COURSES

Cross Selling Financial Products and Services
Defines and teaches the importance of cross selling and how to recognize cross selling opportunities.

SERVICE Excellence*
Illustrates methods, strategies and solutions which will help the participants to provide member service excellence. 

Time Management and Organizational Skills
Helps participants gain control of their workload, increase efficiency and assesses your current time management effectiveness.

Business Etiquette and Professional Presence
Helps participants conduct business confidently, comfortably, professionally and correctly under all circumstances.

Team Dynamics
Thoroughly teaches the skills and behavior to become team players and work better as a group, staff or board, building morale and improving cooperation.

Managing People Effectively
Provides immediate solutions to basic workplace problems and reveals success strategies for managing your staff.

Powerful Presentation Skills
Participants will learn practical tips and strategies that enhance the impact of presentations whether they are delivering to groups of 1 or 1,000 (or a board of 7).

Leadership Development
This workshop provides participants with the tools and necessities of leadership development. 

* SERVICE Excellence training was held at the League on June 26.  This course will be repeated in Dover and in Georgetown.  Contact Alice Smith at (302) 322-9341, (800) 292-7875 or alice@dcul.org for more information.
 

MARKETING MOMENTS
Developing A Sales Culture

          Increased choices and complexity of financial products call for a shift in selling technique.  Mass advertising can’t delve into the diversity of choices and product detail and relate that information to each person’s unique situation.  More and more, the financial marketplace calls for personal, one-on-one selling.  By providing top-notch personal service, you can stay one-up on your competitors, but to do that you need to develop a sales culture in credit union.
             Let’s define the term “culture”.  A “culture” is a total environment –everything that surrounds a living organism and influences development.  To a society, culture is everything that defines the society, from its art forms to its eating habits.  The culture that exists in your credit union is the sum of everything that goes on in and around it.  It includes staff attitudes...members’ perceptions of your institution...even what you have hanging on the walls in your lobby.  Your credit union culture is the total environment that your credit union creates.
            What’s a “sales culture?”  An environment in which selling—through educations and service—is the focus of every element in that environment.
            Selling, for our purposes, means sustaining an atmosphere and personal attitude that makes members feel welcome, comfortable and open to learning the facts about your credit union’s products and services.
            Whether you’re persuading people at a board meeting, greeting members in the lobby or answering the telephone, you and your staff are selling the service and image of your credit union.  Everyone in the organization is part of the process of attracting good members and keeping them satisfied.
            A selling culture is built from the top.  You can’t tell your staff to develop a selling culture and an atmosphere of personal service and expect that it will be done.  It’s like trying to lead a horse by pushing on the rope instead of pulling it.
            A selling culture is developed from a way of thinking, and that attitude must come from top-level commitment, enthusiasm and constant encouragement.  To keep everyone in your credit union dedicated to the selling process, you must lead by example. 

Essentials is published quarterly by:

 The Delaware Credit Union League 
4 Quigley Boulevard
New Castle, DE  19720
(302) 322-9341 or (800) 292-7875
Fax:   (302) 322-9354
Editor:  Jane Bailey
E-Mail:  jane@dcul.org