WOODLAND, Calif.-Many credit unions have built marketing campaigns around saving their members interest by bringing in loans from outside lenders, but $195-million Yolo Federal Credit Union has taken the concept to a new level while building its portfolio.
Marketing Manager Christina Blackman told Credit Union Journal Yolo managed an online giving program known as "Give A Click" for two years. After reading about other CUs running loan interest savings programs, including New Jersey's United Teletech Financial FCU's "Million Dollar Challenge," an idea was born.
"We revamped our online giving program to work in tandem with an interest savings program for our members," she explained. "We liked the idea of helping members and we typically beat the rates of both the national and community banks that operate in our neighborhood."
Under the Give a Click program, Yolo members nominated worthy nonprofits or cooperatives to potentially receive a $1,500 grant. In this year's twist, Yolo challenged its members to save $1 million in interest by refinancing. When that threshold was reached, YFCU said it would up the ante and distribute a total of $7,000 in grants to five recipients.
$3 Million Saved, So Far
From Feb. 1 to June 30, Yolo tracked the progress of interest saved, Blackman said. Any time a member refinanced a loan from another lender, the CU calculated the interest they saved based on the payoff amount.
"On June 30 the total was a little more than $3 million saved, so we bumped up the money for the grant program," she said. "We are taking nominations through July 31, and we will select five finalists for a public vote. The top vote-getter will receive $5,000 and the remaining finalists will each receive $500."
Of course, while members were saving the credit union was adding to its loan book, reporting a 35% increase in dollars funded compared to the same period last year, while its number of loans funded increased 48%.
According to Blackman, both elements of the promotion are helpful to Yolo County, just west of Sacramento. She said the CU has fielded many requests for donations and sponsorships with local non-profits because there are fewer dollars available in the community to fund those requests.
'A Great Opportunity'
"Our local economy is a little tricky and we have a high unemployment rate, so many of our members are looking to save money whenever they can and increase their cash flow," she said. "We knew helping them reduce their loan payments would be helpful. Many of our members are trying to get out of debt, not purchase more. They are consolidating and refinancing. Mortgage rates are very low right now, so many people have a great opportunity."
As of June 30, the official loan refinance program is over, she said, adding Yolo FCU always encourages its members to bring in their loans.
"Right now our marketing efforts are geared toward generating nominations of deserving non-profits," she said.