Bancography | Branch Planning, Marketing Research, Brand Strategy, Products & Profitabilty

What Does The Word ‘Federal’ do for FCUs?

Federally chartered credit union have a few more options with their names than their state chartered counterparts.

Fed logosThe huge number of federal banks and federal agencies using the word ‘Federal’ in their name creates a layer of credibility or added security. Credit unions bearing the ‘Federal’ moniker are (intentionally or unintentionally) suggesting that their brand is backed by some connection to the U.S. Federal Government. (Of course, in the case of federal credit unions insured by the NCUA, this is essentially true.)

For federal credit unions, the word ‘Federal’ is almost like a middle name, wedged in between their first name and the common ‘Credit Union’ surname. Some credit unions choose to emphasize their middle name, others downplay it.

The most common way for federal credit unions to treat their federal status is to tuck “Federal Credit Union” under their main name:

Traditional FCU logos

Other credit unions embrace their federal status by elevating the word ‘Federal’ up to the same size and level of importance as their main name.

Federal Credit Union logos

This treatment encourages staff and the general public to see and say the name differently, as in the following examples where the ‘Credit Union’ surname was dropped altogether.

FCU logos with ‘Federal’ only

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Federal credit unions can also abbreviate their names, like ‘Bay Fed’ and ‘USA Fed,’ to make them more casual and friendly while still preserving the strength and stability implied by the ‘Federal’ brand.

Many federal credit unions can use the abbreviated ‘fed’ in their website domains. This can make it much easier to obtain a short, relevant and intuitive URL, even when you have a common word in your name such as ‘Bay.’

On one extreme end of the spectrum, there are credit unions who have dropped not only ‘Federal’ from their logos, but ‘Credit Union’ as well.

Logos with no FCU

Some would argue that it’s a mistake to shed ‘Credit Union’ from their names, saying you should embrace the credit union difference because that is what makes you unique. It is certainly what makes you unique from banks, but not from other credit unions. When you are a credit union like Allegacy and ENT with billions in assets, you’re not only big enough to have your own brand (one with a shorter name), you’re big enough to support it with the right amount of advertising.

Bottom line: Your name may always be ‘ABC Federal Credit Union,’ but how you choose to treat your logo and refer to yourself is a strategic decision. As a federal credit union, you have options.

One of the biggest benefits federally chartered credit unions enjoy with respect to naming is that they can change names much easier than state chartered credit unions because federal credit unions are exempt from any state laws and DFI requirements to hold member votes to get name changes approved.

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  1. By law, federally chartered credit unions must use the words “federal credit union” in their name, and state chartered credit unions must use the words “credit union” in their name. In the case of these credit union nicknames, you get the weird situation where the largest credit union in Michigan refers to itself as “DFCU Financial” (and sometimes “DFCU” for short), yet it is officially named “DFCU Financial Federal Credit Union” which you will see when you sign loan papers.

  2. Jeffry, what a thoughtful and interesting post. I agree that the placement (and size) of “Federal Credit Union” in a logo does make a difference. UFirst FCU chose to take the middle ground. “Federal Credit Union” is smaller but set in a block for prominence.

    Morriss, it’s interesting that you would have used DFCU as an example. We have a DFCU ( here in Plattsburgh but in this case the “D” stands for a federal prison instead of a place like Dearborn. I’ve been told that our DFCU has a membership that’s very resistant to a name change.

  3. True, credit unions are required to refer to themselves using their full legal name in certain documents. But to my knowledge, they are not required to include either “Credit Union” or “Federal Credit Union” in their logo and other general marketing applications, such as building signage. This is how more and more credit unions have become “Newname Financial.”

  4. Excellent post Jeffry. I am really enjoying your blog. You clearly do a ton of research for every post and it shows. Keep up the great work.

  5. Thanks a bunch for the positive feedback Tim. It’s really appreciated.

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