The ‘Community Credit Union’ fallacy
For many credit unions, expanding their charters is a common growth strategy. Often, a credit union’s first reflex after getting a community charter is to add the word “community” to its name.
The reasoning goes something like this: “Our community charter should fuel future growth. The only problem is, people don’t know they can join. We need a way to say, ‘We’re open to everyone!’”
The solution: ‘[Fill-in-the-Blank] Community Credit Union.’ The word “community” represents a “community charter,” and everyone knows a community charters are “open to the community,” right?
Wrong.
Reality check: Industry insiders often make the mistake of crediting the general public with more knowledge about credit unions than they actually have. We forget that Joe Average struggles to grasp the basic concepts of “joining” and “membership,” much less subtler credit union terminology, like “shares” or “CUDL.”
There’s nothing inherently wrong with the word “community.” There are plenty of successful credit unions incorporating “community” into their names. Just don’t be fooled into thinking the word “community” will help the general public realize they can join.
Over 500 credit unions have slipped the word “community” in their names – that’s one out of every 16. Yet after changing names, many are still frustrated by stagnant member growth. This is most prevalent among credit unions who retain their main sponsor’s name — for instance, turning ‘Company Employees Credit Union’ to ‘Company Community Credit Union.’ It seems logical, because this formula preserves heritage in the old name. 
The big problem is that no matter how many times you say “everyone can join,” people just can’t get past the ‘Company’ name. They understandably assume that only employees of the Company can join. Research bears this out over and over.
Bottom line: You can’t just tack a word like “community” onto your name and hope it works. Supporting a community charter takes good old-fashioned marketing muscle.
Most credit unions with newly-minted community charters don’t have brands that are ready for primetime. If you’re going to go through the process and expense of changing your credit union’s name, embrace the opportunity to truly rebrand your identity.
This article © 2012 by The Financial Brand and may not be reproduced.
Related Articles From The Financial Brand:
- 6 Reality Checks About Credit Union Community Charters
- Credit Unions Dropping ‘Credit Union’ From Their Names
- Q&A: The Strategy Behind UMe Credit Union’s Rebranding
I would like to add… Reality Check: Some states in this fine country require a credit union, if they are chartered in that state, to put “community” in their name.
Hi George. Good point, you’re right. Oregon is one state that I know of that requires “Community” be added to names of credit unions with community charters. Are there others that you know of?
It doesn’t change the primary point, however: That with the general population, the word “community” doesn’t translate to “we’re open to everyone” the way credit unions would want. There’s still a lot of marketing, communicating that needs to occur to get any traction with the “you can now bank here” message.
[...] unions pursue the “Community” naming strategy to reflect a more open charter, but few find that it works as well as they hoped. It’s worth pointing out that Iowa credit unions are required to have members approve name [...]
[...] argue the name lacks relevancy, but at least it isn’t an acronym, nor does it try to squeeze in the word “Community.” It is unique, memorable and legally available in the financial [...]
[...] credit unions included the word “Community”: Arlington Community, Champion Community, Community, Community Driven, Memberfocus Commmunity, My [...]
[...] credit unions think adding the word “Community” in their names connotes an open charter, but that never works as hoped. You can try switching to an acronym — AECU, BECU, CECU, DECU, EECU, etc. — [...]
[...] Tacking the word “Community” on to your name never works. People don’t equate the word “Community” with “open to the [...]