TUSCALOOSA, Ala.-Tuscaloosa CU has seen a spike in membership and checking growth the past 11 months and attributes a great deal of the increase to members reactivating their CU checking accounts due to unfriendly bank practices.
Comparing growth from October 2011 through 2012 to the same period a year prior, Tuscaloosa CU has seen membership growth (8%) increase by two percentage points, total checking account growth (14%) go up by three percentage points, and checking balance growth (30%) skyrocket by 22 percentage points.
CEO Tommy Cobb said the credit union has not changed its business approach to attract members or build deeper relationships over the past two years. Therefore, he attributes most of increase to Bank Transfer Day affecting consumers' decisions.
"My tea leaf reading of why we've seen the big increase in checking, both in numbers and especially in dollars, is that much of the dollar growth has been from inactive checking accounts that members decided to activate," said Cobb. "From some of the conversations I have had with staff, members that were using a bank as their PFI became dissatisfied and led them to reactive their credit union accounts."
The Importance of Decimals
In the past year, total member accounts of all kinds at the CU have increased by 9%, which is three percentage points better than the previous year. In the same time total deposits have grown by 13%, a jump of six percentage points from the prior 12-month period.
"The bulk of total account dollar increases are in shares and money market accounts. It seems that any rate we offer that has only one zero right of the decimal place beats a bank rate," joked Cobb. "Due to low rates, cost of funds is nominal for this growth, so the CU tries to be among market leaders in dividend rates."
Cobb admitted the $55-million CU underestimated the groundswell of consumer bank dissatisfaction in its region, therefore efforts to deepen relationships are not in full swing yet. "When Bank Transfer Day hit, we just had to rely on positive word of mouth references from members and our reputation as a value-oriented place to do business. Since the initial Bank Transfer Day surge, we have invested in a mobile app, 24-hour call center and an online loan application to continue to provide convenience and value to members while increasing our market reach."