The subject of a national campaign for credit unions has been widely debated over the years. Some argue about whether it should be a brand campaign or an awareness campaign. Others dispute what such a campaign should say. And a few even question the very need for this sort of campaign.

Regardless of who supports- or opposes the idea, one question bothers everyone: How would such a campaign be funded?

Here’s the easiest funding formula. Every credit union could contribute a proportionate amount relative to their asset size — a proposed multiple of 0.005% of assets. That’s 1/200th of a percent.

Where does this 0.005% number come from? Simple. As a rule of thumb, the marketing budget for a financial institution should be around 0.1% of its assets (it can be a little more for smaller financial institutions, and a little less for bigger ones). For example, a $500 million credit union should spend around $500,000 per year on marketing. That means if credit unions contributed 0.005% of their asset size to fund a national campaign, it would work out to around a 5% slice of their annual marketing budgets.

Key Question: If you’re a $100 million dollar credit union, could you afford to contribute $5,000 from your marketing budget to a campaign that benefits all credit unions? If you’re a $1 billion credit union, can you make a $950,000 marketing budget work while contributing $50,000 to a national effort?

Reality Check: Some credit unions are still spending almost 0.005% of their assets on advertising in the Yellow Pages.

If credit unions would contribute only 5% of their annual marketing budgets to some sort of nationally-organized effort, they could collectively build a $50 million annual war chest. Keep in mind that this isn’t additional marketing dollars; this would be a reallocation of money that’s already being spent. It’s simply about achieving economies of scale… and “credit unions helping credit unions,” as the expression goes.

What could credit unions do with this $50 million budget? Certainly they could run ads in print and on TV, as some credit union experts have suggested. But what if $50 million was spent all online (ads, SEO, etc.), pointing towards a website like JoinACreditUnion.com? How many Gen-Y members would credit unions draw? Or what if credit unions used the $50 million all for a coordinated public relations effort? How much more good press could credit unions pick up in the mainstream media? And what would happen if credit unions sustained this for five years?

Reality Check: This isn’t likely to happen — especially now. Beyond the massive pressure on everyone’s capital, CFO’s everywhere are wondering if- and when another “special assessment” might be coming. The notion of a national campaign probably just sounds like one more hit to the bottom line. The last thing most credit unions feel like talking about is another way to spend money. Don’t expect to see a flood of credit unions volunteering anytime soon.

Bottom Line: The majority of consumers have no clue about what credit unions really are, and/or don’t include credit unions in their list of primary financial options. Credit unions could afford a national campaign that addresses this reality…that is, if they really wanted one.

Key Questions: Can credit unions afford to not run a national campaign? What are the opportunity costs? What would have happened if credit unions had been running this sort of campaign throughout the financial crisis?

There is little doubt that social media is here to stay. As the list of organizations jumping on the bandwagon grows every second, the same business questions continue to arise:

• How do we execute it effectively?
• How do we justify the time and personnel expense (ROI)?
• How do we use it to support other initiatives?

To answer these questions, Callahan & Associates Internet Strategy Consortium conducted a social media survey involving over 11,000 credit union members.

Key Fact: This is the most comprehensive social media study ever conducted in the credit union industry.

The study measured members’ use of social media, including visited sites and online activities, communication preferences and desired topics on social media sites. Among the findings:

• More than 82% of credit union members ages 18-60+ use Facebook.
• About half of all members surveyed said they would read a credit union’s Facebook page periodically.
• Among credit unions with a Facebook presence, only 5-16% of their members were aware their credit union had a fan page. Most members reported learning of Facebook pages through credit union websites.
• Of Twitter users, 34% use it to follow companies with which they do business.
• Twitter’s overall familiarity among members was 14%, but only 2-7% reported being “very familiar” with the service.
• Members using Twitter expect their credit union to provide information such as fraud alerts (71%), special offers (60%), financial tips (58%), and rate specials (57%).
• Nine-in-ten online members are interested in receiving email from their credit union.
  

  

  The Callahan & Associate study including 11,000 credit union members revealed interesting differences between age groups and usage of certain social media channels.

Readers of The Financial Brand are invited to enjoy a special webinar, “Engaging Members through Social Media Challenges & Opportunities,” hosted by Callahan & Associates that presents the study’s conclusions and recommendations.

$50 Off the playback of this webinar!

Just type the promo code FinancialBrand in the
highlighted area of your shopping cart.

The webinar should provide you with a clear picture of what your organization can expect from this growing trend:

• Critical considerations as you plan your social media initiative
• How to use social media to monitor the health and stature of your brand
• Where different audiences should be engaged differently
• Who you should (or could!) be targeting
• Examples of how credit unions are leveraging social media

[Note: This is a companion piece with today's other story,
"Credit unions on YouTube: 2008 vs. 2009."]

Meet David Jimenez

Are Hispanic robots common at credit unions?

Banks Suck

Literally… as in a vacuum sucking bills out of your wallet.

Novella Parody

A bizarre analogy, shot with a hand-held.

Superbowl Rap

One of the most controversial ads in the credit union industry ever.

Football Fingers

Football-playing fingers celebrate a new branch location.

Cornhole Contest

Credit unions try to out-cornhole banks.

Credit Unioning

Credit unioning is better than gold — a classic TV ad from 1985.

Crazy People

Two so-called “actors” play therapist-and-patient in this real TV spot.

Screw the Bank I Work For

Not to leave banks out, here’s a strange but funny Kids in the Hall sketch.

The Financial Brand first looked at the core values of 50 banks. Now, we’re repeating the exercise, but this time we’re looking at credit unions’ core values. How are they different? How are they similar?

Generally speaking, banks and credit unions see pretty much eye-to-eye on their basic core values. Both give high rankings to Honesty, Commitment, Respect, Excellence and Service, and both put Integrity at the top of their lists.

The most common core values cited by credit unions are depicted in the Wordle diagram at the top of this article (click to enlarge). The more common the word, the larger it is. For easy comparison, here is yesterday’s Wordle diagram for banks’ core values (left), next to the one for credit unions (right):

The relative emphasis (or frequency) of the core values of banks and credit unions are
fairly comparable, as indicated by the relative size of the words within each diagram.
(Note: You can click on both images to enlarge.)

What’s striking about this comparison isn’t the similarity in core values. It’s the core values that aren’t shared by both credit unions and banks that are most interesting. Here are some of the core values listed by credit unions that weren’t listed by banks:

1. Cooperation, Democratic Principles
This isn’t the same thing as Partnerships, something that both banks and credit unions listed. This goes beyond mere collaboration. And this is as it should be. Credit unions were founded on the principle of “people helping people,” so one would expect to see credit unions value things like Cooperation and Democratic Principles. However, there seems to be fewer and fewer good examples of credit unions exercising their democratic processes. Mostly, members vote on board members, name changes and mergers/conversions, as mandated by law.

2. Ethical
Six credit unions said “operating ethically” was a core value, while no banks listed it. But don’t fault banks for excluding Ethical from their core values. It’s not like you can say, “Well, banks didn’t put Ethical on the list, so that means they’re out to break the law.” The bigger question is why do credit unions feel the need to say they will “operate ethically?” Isn’t that a given? It’s kind of like Accuracy — you just expect a financial institution to be ethical. Maybe the word is Responsible, something listed by seven credit unions but only one bank. Or Prudence (credit unions = 2, banks = 0).

3. Environment
The Environment was such an important issue to two credit unions that they listed it as a core value. Again, no banks.

4. Employees
A few credit unions said their Employees were among the things they value the most. Perhaps banks, by their very nature, are forced to put Shareholder Value first?

5. Fun
Only two credit unions said Fun was important to them. No banks. What’s sad about this is that only two financial institutions out of 100 believe in Fun. Financial services are as boring as it gets. It’s too bad more banks and credit unions don’t see the opportunity to make banking more pleasant and entertaining for both consumers and employees alike.

Conclusion

Corbin Rusch, commenting on The Financial Brand’s study of banks’ core values, sums it up pretty well:

“Integrity, Teamwork, Excellence, Commitment, Honesty, Respect, Service, Professionalism, Customers, Trust, Community, Loyalty, and Innovation should be applicable to most every kind of business. A hospital, a paper supply company, a construction company, even an exterminator could share these values. As a consumer, I expect businesses I deal with to have these values at their core.”

It might help to think of the financial industry’s common core values as more of a generic Banking Bill of Rights — something that applies equally to every financial institution and every banking customer. Throw out all the cliches; they’re just antes — chips you’ve got to throw in just to play in the financial space. Then, you can finally be free to explore some of the more interesting core values that your organization could be considering.

Here’s some thought-provoking core values that could help differentiate a financial institution — things you don’t expect from every bank or credit union:

• We believe in being Proactive.
• We believe in Work/Life Balance.
• We believe in Accountability.
• We value Transparency.
• We believe in fostering Engagement.
• We value Relationships.
• We believe in financial Knowledge and Education.
• We believe in Diversity.
• We believe in Nimble/Flexible and remaining Agile.

Note: Dupage Credit Union, who had the brass to list their Image as one of the things they value the most.

Filene recently released an excellent report that tackled this question: “What is ‘the credit union brand’ good for?” It’s a fair question. In the war for retail financial services, the battle line between banks and credit unions has become increasingly murky over the years.

How are credit unions any different than banks? You hear a lot about the not-for-profit structure of credit unions. Or as a member, “you’re an owner.” Even “one member, one vote” is sometimes mentioned. Is this what make credit unions special? Maybe, but none of that really makes any difference to most members.

“With the economic times we’re in, other institutions may be increasing their rates and their fees for services. Instead, you’re reinvesting in your members as a ‘thank you’ for their loyalty.”
– Jim and Terrie B, members
Wright-Patt Credit Union

But here’s a concrete example of “the credit union difference” Filene was searching for: member dividends.

Granted, not all credit unions pay dividends. But for those that do, like Eastman Credit Union, who just distributed a $4 million dividend to its 107,000 members, an average of $37.38. This is the 12th year in a row the credit union has paid a dividend. Since 1998, a total of $37 million has been paid out.

Delta Community Credit Union just paid a $5.0 million “Patronage Reward” to its 177,00+ members. Members with deposits earned a bonus of 4.50% of the total interest they earned in 2008. Borrowers received a rebate of 2.50% of the interest they paid on their loans during the same period.

And Western Division FCU paid over $1 million to 9,700 members — a whopping $103.10 average payout per member. The dividend equaled 33% of all interest earned on savings, certificates and money market accounts during 2008. It was the sixth year in a row that the Williamsville-based credit union has declared a bonus dividend.

Bottom Line: There is no better way to tell the world you are safe and sound than sharing your profits — something both banks and credit unions can do.

But as a bank, it’s shareholders — not customers — who are the beneficiaries. With credit union dividends, members are directly rewarded for the size of their relationships. And the mass media, happy to report any good financial news in a recession, eats this stuff up.

Key Questions:

• What will happen to credit union dividends in 2009? WIll fewer credit unions pay out? Will the economy put dividends on hold for a while?
• Has a bank ever tried something this? Giving back money to its customers on such a wide scale?

“Credit unions have
joined the long line
of bailout recipients.”
– NPR’s Marketplace

For the past few months, the mainstream media had been heaping mounds and mounds of glowing press on credit unions. But last week, the TARP got thrown on credit unions and what happened? Poof! The good news is gone, and now articles with a much more somber, sober tone have taken their place (something The Financial Brand predicted would happen last month).

Take this example from Time magazine. There’s a stark contrast in these two Time articles, one from late October and the other from mid December. The first article is markedly upbeat, where a playful picture accompanies a glowing story about credit unions (click on the images to read the complete, original story):

Their latest article is much more dour:

NPR’s nightly business show Marketplace chimed in with a similar slant: “Credit unions have joined the long line of bailout recipients.”

What makes this particularly newsworthy is that the mainstream media basically never runs a story about credit unions — ever — much less outlets with the prestige of Time and NPR.

The details of the credit union TARP plan itself are actually quite clever and creative, if not a little complex. The way it works is that corporate credit unions get $41 billion. The corporates will lend this sum to their members, “natural person credit unions,” who will turnaround and deposit the borrowed money back with the corporates. It’s fancy accounting footwork that supposedly doesn’t cost taxpayers anything…that is, except for some confidence in the credit union system.

Reality Check: It doesn’t matter that corporate credit unions are the ones directly receiving TARP funds. The news media doesn’t care. The story is too complicated to explain. Paraphrasing, reporters will sum it up this way: “Credit unions are getting bailout money.”

The credit union TARP scheme is somehow supposed to generate interest-income along the way. The interest is to be matched by credit unions, who will use the money to lower mortgage payments for distressed members. This plan to recalculate mortgages raises some big questions:

• Who gets their mortgage reduced? How are they chosen?
• How do people qualify?
• How many people will this money really end up helping?

Key Fact: 36% of mortgages modified in Q1/08 had a 36% redefault rate after 3 months. 53% redefaulted after 6 months. [Source: CNBC]

If credit unions have indeed found a way to trickle TARP money down to regular folks in the form of mortgage reductions, then they will have figured out how to do something that banks, Hank and Bernanke couldn’t.

Just the same, that isn’t the side of the story that the news media is likely to report.

[Editor's Note: This is a guest article from William Quinn, an associate at Callahan & Associates.]

No matter how the financial rescue plan unfolds, the financial industry as a whole will not go back to the way it was. This challenging economic climate provides a historic opportunity for the credit union industry to step out from the shadow of banks and take a prominent place in Americans’ financial futures.

With this in mind, credit unions need to decide today where they want to be when it all shakes out. They must position themselves correctly to succeed. Let’s look at the three ways to reach your market:

1. Marketing to existing members
2. Marketing to potential members
3. Member-employee interaction

1. Marketing to Existing Members

There is opportunity in enhancing relationships with existing members, and current statistics certainly show room for much greater penetration:

Back in September, as the economy began disintegrating, an unusual trend began to emerge. The media — who had been ignoring credit unions for decades — all of a sudden started talking about these member-owned financial cooperatives that had managed to avoid the economic catastrophe. Hundreds of articles later, it doesn’t appear that the trend will stop anytime soon.

Reality Check: The biggest PR bonanza to hit credit unions — ever — will come to a screeching halt if they take TARP bailout money as part of a “rescue plan” to address “toxic assets.” Expect all the good news stories about how credit unions are “safe and sound” to evaporate. Poof! Gone.

This is Part IV of The Financial Brand’s on-going coverage of the media’s lovefest for credit unions. Here are the other installments in case you missed them: Part I, Part II. Part III includes a summary of the main themes the media has been hitting in their articles.

“Downturn sparks credit union rush.”

– BBC America

“Credit unions weather downturn.”

– San Luis Obispo Tribune

“Credit unions become new safe harbors.”

– Fort Worth Business Press

“If you think credit unions are single-location dinosaurs available just to employees of certain firms, it’s time to think again.”

– Yahoo! Finance

“As U.S. banks retreat, credit unions step up loans.”

– Reuters

“While banks struggle with risky investments, credit unions avoid the fray.”

– Business West

“A credit union can help you through these tough times.”

– Easier.com

“In today’s economic times, credit unions offer some better options.”

– Naperville Sun

Before September 2008, you would almost never see a story about credit unions anywhere in the news. For decades, the mainstream media essentially ignored this sleepy sector of the financial industry. But these days, the news media is pouring piles of positive press on credit unions at a dizzying pace. And from the looks of it, news outlets won’t stop singing the praises about credit unions anytime soon.

Reporters, eager to report on any ray of sunshine they can find in this dour economy, are frequently touting the safety, strength and stability of credit unions. There is a wide range of points these articles make, but the main themes include:

• Credit unions are not-for-profit and owned by members (no shareholders)
• Credit unions typically offer better rates and lower/fewer fees
• Credit unions have money to lend
• Credit unions are more willing to look at an individual’s credit situation when making loan decisions
• Credit unions have insulated themselves from the subprime mess
• Credit unions often service their own mortgage loans, requiring them to be more prudent in their lending practices
• Credit unions are local, and not run by Wall Street bankers
• Credit union deposits are insured through the NCUA up to $250,000
• Credit unions are well-capitalized compared to their bank peers

If you’re a credit union, these are the things you need to be telling your audience.

Here are some of the headlines and excerpts from mainstream news outlets… in just the last two weeks.

“Bad times for banks means boom times for credit unions.”

– Time Magazine

“With banks reeling, depositors turn to credit unions.”

– Triangle Business Journal

“Credit unions offer alternative to skittish banks.”

As the banking industry stumbles through the crisis that has gripped the financial world, consumers have a viable alternative to a traditional bank: a credit union.
– Chicago Tribune

“As economy swoons, more people are joining credit unions.”

With all of the troubles taking place in the financial industry these days, one sector that appears to have avoided the mess of subprime and other shaky loans is credit unions.
– Bellingham Herald

“The uncertainty surrounding banks is proving to be a blessing for credit unions in the state.”

– New Jersey Biz

“Banks’ losses prove to be credit unions’ gains.”

For the most part, area credit unions have sidestepped the worst of the financial upheavals that have taken down some of the largest banks.
– San Diego Business Journal

“As banks tighten credit, credit unions booming.”

The only trouble they have, they say, is getting the word out to more people that they are sitting on money and eager to loan it.
– Crain’s Detroit Business

“Credit unions a refuge in dodgy times.”

– News Wales

“Credit unions show stability in crisis.”

At a time when banks are staggering under losses from the subprime mortgage meltdown, most credit unions are dodging that bullet.
– Inland Valley Daily Bulletin

“In these rocky financial times, with banks going belly up, more people are turning to credit unions.”

– Fox Atlanta

“Credit unions increase in popularity.”

These days, a bank’s loss could be a credit union’s gain.
– Syracuse 10 News Now

“Credit unions are one division of the financial services industry insulated from recent chaos.”

– Seattle Post Intelligencer

“Credit unions a conservative alternative.”

– Maryland Gazette

People still argue about whether credit unions should use the word “banking” or not. The concern is that if credit unions use the B-word, they make themselves more like banks. If legislators can’t see any difference between “banking” at a credit union or a bank, they may decide to tax credit unions…at least that’s how the argument goes.

Reality Check: Credit unions will not be taxed because of semantics.

A whitepaper commissioned by CUNA back in 2005 acknowledges the B-word’s ubiquity and the futility of trying to fight it:

1. Trying to ban “banking” it is a fruitless task — not worth the trouble because it is no big deal to consumers.
2. Bank is a generic term, and there is no reasonable alternative.
3. Creative and clever marketers can, and should, take on the challenge of finding words to describe the credit union experience, and establish “credit union” as a brand.

CUNA acknowledges that there is no “reasonable alternative” for the word “banking” and trying to ban it is pointless. Keep in mind, this is CUNA talking.

Reality Checks:

• Consumers are going to refer to basic financial services as “banking.”
• Credit unions do struggle with a different B-word: “Branding” — real, meaningful differentiation.

Credit unions, especially those with broad community charters and billions in assets, have an increasingly tough time distinguishing themselves from banks, not to mention each other. As they continue to expand, they match most banks’ product lineup all the way down to business banking.

Key Question: If credit unions haven’t been able to successfully communicate the fundamental differences between them and banks in the last 50 years, how can they ever hope to train the public to use whatever substitute verb for “banking” the CU industry may prefer?

There is certainly a difference between using the noun “bank” and the verb “banking.” But if the differences between banks and credit unions boils down to rhetoric, everyone (taxed or not) will be competing on things like rates and how many branches they have.

I just gave another webinar through CUES titled “The 7 Deadly Branding Sins.” These are the 7 biggest strategic errors financial institutions make. They are broad generalized observations based on my first-hand experience evaluating 75 financial brands over an 8-year period.

Here is the executive summary:

1. DELUSIONS OF BRANDEUR
   Thinking you have a brand strategy when you really don’t.
2. TOXIC SAMENESS
   Looking, acting and sounding like everyone else.
3. LCD SYNDROME
   Trying to appeal to everyone (e.g., the Lowest Common Denominator).
4. CRIMINAL NEGLECT
   A failure to commit. Not supporting the brand with time, energy and money.
5. CULTURAL AUTISM
   Staff don’t know what the brand is or understand how to live it out.
6. BRANDING SCHIZOPHRENIA
   Delivering an inconsistent look-and-feel and/or experience.
7. COSMETIC FIXATION
   Undue significance or attention placed on the brand’s identity (it’s look and feel).

Tip of the Hat: To Ron Shevlin, for his coining of the phrase “Delusions of Brandeur.”

Need more proof that existing market conditions are creating an optimal environment for credit unions to flourish? Here it is.

“As banks struggle, credit unions get rush of new customers.”

— The News Tribune

“Credit unions make sense now more than ever.”

— Wall Street Journal MarketWatch

“Consumers are now thinking seriously about switching
their cash from banks to credit unions.”

— Northwest Cable News

“Wachovia customers use their feet, head for credit unions.”

— Wall Street Journal MarketWatch

“We’ve run out of switch kits.”

— TAPCO Credit Union, in the News Tribune

“Credit unions have a chance to attract new members to savings accounts right now.”

— Seattle Times

“There is going to be tremendous loan demand. You’re going to have to tweak your strategies, and let more members know you’re there.”

— Dave Colby, CUNA Mutual’s Chief Economist in the Seattle Times

“Despite national downturn, local credit unions are thriving.”

— Wisconsin State Journal

“Credit unions are attracting new deposits.”

— Santa Cruz Sentinel

[The Financial Brand has another article about the opportunities credit unions have in this economy: The media falls in love with credit unions.]

Here are recent stories of interest from around the web.
Click on the hotlinks to read the full story.

Taking the Initiative: Credit unions don’t wait for leagues to run ’soundness’ ads

Wanton Wants: Americans’ addiction to borrowing root of crisis

Allegedly Expensive: BofA’s Countrywide settles fraud case for $8.4 billion

Post-Bailout: Financial brands twist in the wind

Carpe Diem: Wall St. woes create opportunities for a new level of dialogue

Fail! 75% of online banking sites can be hacked

What Can I Say? Advice to financial brand marketers

Meltdown Fallout: How the crisis morphs the online banking landscape

Denial: People think banks are bad, but “Not my bank!”

Pre-PR: EON Bank suggests a name change is on the horizon

Buck the Norm: A brazen Gen-Y promo for credit unions

U Can: An empowering campaign from an African bank

Squat: Cybersquat your own names and thwart crisis-phishing scammers

Here are over a dozen references to credit unions in the mainstream media in recent weeks. Most of them stop shy of outright endorsements, but many of them unabashedly urge people to make the switch.

[The Financial Brand has a similar article on the media's newfound love for credit unions: As if credit unions need another reminder...]

“Credit unions, not-for-profit financial institutions owned by their members, may be among the safest financial institutions in the nation, despite our nation’s current economic struggles.
— West Orlando News

“As banks fail, credit unions deserve a look.”

— News Observer

“Forget banks, join the credit union.”

— West Orlando News

“Ditch your bank for a credit union.”

— MSN Money

“Wall Street turmoil is credit unions’ ‘golden opportunity.’”

— Seattle Times

“Who says you have to settle for a bank? Relief could be as close as the nearest credit union.”

— MSN Money

“Oregon credit unions boom as lenders flee some banks.”

— The Oregonian

“Anxious consumers, looking for save havens for their money, are steering millions of dollars into Oregon’s credit unions.”

— The Oregonian

“Credit unions are gaining recognition among consumers for not only having avoided the problems that created today’s financial mess, but for being a huge part of the solution.
— West Orlando News

“Local credit unions benefit from customer ‘exodus’ from national banks.”

— Register Pajaronian

“Credit unions, having escaped the financial crisis, are chipping away at their larger rivals’ customer base.”

— TheStreet.com

“If there’s a calm in the economic storm, it may be credit unions, whose investors are sleeping through the night.”

— CNN’s Susan Lisovicz

“Most of the folks I talk to who have abandoned banks for credit unions are thrilled they made the switch. If you’re sick of your bank, why don’t you follow suit?”

— MSN Money

“If you want to own part of the financial institution that you do business with without buying their stock, it’s time to look at a credit union.”

— The Star Ledger

“Data show credit unions to be an appropriate, safe choice among financial institutions.”

— The Washington Post

“This is a good time to consider an alternative to for-profit private banks—like credit unions.”

— Lifehacker (the 6th most-respected website on the internet)

Oh, how times have changed. Less than a year ago, you’d almost never see an article about credit unions in the mainstream media. These days, in the wake of a massive economic meltdown, it seems the press can’t stop itself from singing the praises of credit unions’ “safety and stability.”

To the Credit Union Industry: This is your wake-up call. Market conditions for credit unions have never been more ripe. (If there was ever a time for a national credit union campaign, this is it.)

Bottom Line: If you’re a credit union, the smartest thing you could do is double your marketing efforts — right now — including the budget.

Orange County Teachers becomes SchoolsFirst (April)
“After years of research,” the nation’s largest credit union for school employees picks a new name that is more geographically representative and inclusive of all school employees, not just teachers.

METRO Credit Union becomes Extra Credit Union (May)
What was the reason for this name change? The credit union serves the educational community in Southeast Michigan. What was wrong with “Metro?” There isn’t much information out there on this name change. Making the tie back to the credit union’s educational roots, the name is actually “Extra Credit.”


Marion Schools Employees CU becomes Via (May)
The interesting thing here is that the credit union gave members a choice of two names and let them vote. The change takes the credit union’s name from 33 characters to three, and from 12 syllables to two.

Bank of Eureka Springs becomes Cornerstone (May)
The bank changes names so it can expand beyond its Eureka Springs roots. The only problem is that the Cornerstone name is pretty popular in the financial industry.

Tooele FCU becomes HeritageWest (June)
TFCU was originally formed in 1948 as Benicia Arsenal Federal Credit Union in Benicia, California. In 1962, the name changed to Tooele Army Depot Federal Credit Union. This latest name change reflects a consistent pattern of credit unions tied to military bases changing names, many due to base closures or “realignments” (i.e., “cuts”).

Jefferson County Teachers CU becomes eCO Credit Union (July)
Designed to remove perceived barriers the new name is derived from a blend of ‘Educators’ and ‘Community.’ That may be the credit union’s rationale, but with a name like “eCO,” they better be green, too.

The Education Credit Union becomes Athena (July)
This Ohio credit union picks the name of the Greek goddess of wisdom and warfare to support its new community charter.

Commerce Bank of Folsom becomes SierraVista (July)
Only a year after the bank was founded, it decides to expand beyond Folsom. The CEO also said the old name had too many syllables and too many consonants.

First State Bank becomes Legence (July)
The bank said the name change was made to accommodate future growth outside of Southern Illinois. When First State was founded more than 100 years ago, it was the only bank going by that name South Illinois. Now Googling “First State Bank” generates nearly 20 million hits. A good reason not to pick a safe, “financial-sounding” or geographic names in the first place.

Farm Bureau Credit Union becomes Interra (Aug)
American Farm Bureau Federation tells its largest credit union to change names.
Eventually, every well-established brand will ask their credit union(s) to change names (ala John Deere, Weyerhaeuser and others). If there’s any credit union out there with a name connected to a well-known brand, this is your wake-up call. Most people haven’t even heard of American Farm Bureau, so if they’re out to defend their brand…look out. How many big-brand, single-sponsor credit unions are left anyway?

Two First Federal banks merge
and become RiverWood (Aug)
Two banks in Minnesota with the same name merge and pick a new name. These two join other “First Federals” that have opted new monikers. Apparently, there are just way too many banks with that name.

DOT Federal Credit Union becomes Bridgeway (Sept)
The credit union gets a community charter and changes names. The new name makes a connection back to the credit union’s roots serving the Department of Transportation — a strategy that is usually well-received. Apparently, there are also three major bridges that connect the residents of the three counties the credit union now serves. 3Bridges (or Three Bridges) would have been a cool name too, but there’s nothing wrong with Bridgeway. It looks like a pretty clean trademark.

Conclusion & Analysis

Community charters continue to be the #1 reason credit unions change names, although changes with employee sponsor groups like military bases are another common reason. That’s why Fort Belvoir FCU dropped the word “Fort” from its name earlier this year. Back in 2002, Motorola was cutting jobs and scaling back operations, so its credit union had to change names and became TruWest.

Most credit unions were founded with Where+Who names like Jefferson School Employees, Marion School Employees and Orange County Teachers that clearly say which people in which community they serve. As credit unions expand their reach, they find that the names that once served them well are awkward and confusing. You can’t just tack the word “community” to your name. People will still think Acme Employees Community Credit Union is just for Acme employees.

The vast majority of bank name changes are the result of mergers. Either one bank absorbs the other, or, if the banks are similar in size, they may mashup their names like RBC Centura.

Geographical names make perfect sense and work well in the beginning. But both banks and credit unions alike find geographical names can be very challenging when the expand beyond their initial service area. This is the #2 reason after mergers that banks change names.