WINSTON-SALEM, N.C.-One credit union has learned just how much better it is to be proactive and seek out refinancing opportunities than to just advertise it offers great rates.
Allegacy FCU jump-started slow lending and now is on pace for 5% loan growth in 2011 because it instituted a new refinance campaign, one in which the credit union's staff actively reviewed members' financial situations when they stopped into the branch, looking for ways to save them money on loans they had elsewhere.
Vice President of Consumer Lending Ken Elkins said Allegacy already had Total Loan Management in place, which advertised how the CU could help members reduce their debt burden. "But we realized our efforts could be more proactive. Our new Conquest Lending campaign was a refocusing. Conquest Lending works the opposite way of Total Loan Management. Now when people come in, say for a car loan, we look for other loans that can help the member."
The new approach generated $4.5 million from 382 single-person loans over five months and gave Allegacy's lending program a shot in the arm, said Elkins, who offered an opinion on why the proactive approach to loan recapture works best. "People will go through all kinds of pain to redo a first mortgage, but they won't get rid of those 21% credit cards," he observed. "Most people do not pay close enough attention to loans outside of their mortgage. Ninety percent of people have a loan set and just keep on trucking."
Getting The Public To Move
Elkins believes that type of consumer mindset is much harder to change with just advertising-the $900-million credit union has to seek out the opportunities and talk to members about how it can put $300 more a month back into their pocket. "That's how you get more of the public to move," insisted Elkins.
To ensure staff had the skill and motivation, coaching sessions for the lending staff and other members of the front-line team supported Conquest Lending. "The sessions created excitement about the product and enthusiasm regarding the ability to help members tackle their financial problems," Elkins said.
Conquest Lending kicked off in January 2011 and Allegacy termed its already low debt consolidation rate (averaged 8% to 10% based on risk through the promo) the "Killer Rate Loan. Not only a killer-low rate, but a rate that will kill off all those other bad credit card and loan rates," said Elkins. "We got $4.5 million we would not have otherwise had, plus we got a lot more car loans and HELOC's in addition."
Allegacy Federal Credit Union is currently running a second Conquest Lending program and will begin another in the first quarter of the year to help members who may have piled on debt during the holidays.