Credit union troubles

Tom Dougherty, CEO – Stealing Share

11 July 2019

The reasons for many credit union troubles

I think everyone knows what a credit union represents. For many, they are just another BANK. For the loyal credit unioners (my word), they represent much more. But there are credit union troubles everywhere you look.

The credit union troubles started when the idea of a credit union first surfaced. What was once a benefit is a hindrance today.

The credit union model

Credit Unions are non-profit or not-for-profit entities. They feature most if not all the services needed in banking. But members mutually own them. The drive to make windfall profits through fees is gone.

When you open an account with a credit union — albeit a checking account, savings account, certificate of deposit or even a personal or commercial loan — you become a member (read owner). In many ways, they are co-ops. Those that use them own them.

Credit union troublesBut the model creates credit union troubles. In short, the troubles are found in something called charters.

Large companies created credit unions

Here in NC, as elsewhere, employees at certain companies band together to create a mutually owned financial entity. For example, here in tobacco country, RJR Reynolds employees founded a credit union.

Membership (what credit unions call depositors— as mentioned above) was limited to RJR employees. By the way, that credit union still exists today. Allegacy Federal Credit Union. We did work for them some years back.

Great folks. Look them up.

Charters. The root of credit union problems.

Many credit unions in the last 25 years have altered their charters. Some adopt community charters, with membership open to almost anyone.

Some recast charters to include almost everyone. Even left-handed Buddhists who once sniffed chicken salad. And anyone the chicken salad sniffers ever bumped into.

The world of SPAM

You would think with lower fees, local roots, altruistic goals and sophisticated banking services, credit unions would be beating up on the self-serving for-profit banks. It’s hard to find a day when there isn’t news about banks and complaints over usury fees.

But not so. Credit unions are often left on the periphery of banking. Not mainstream. They are invisible to prospective members.

Credit union troubles arise from messaging. And naming.

Today, banking customers ignore bank (and credit union) messages. There is so much marketing noise, human beings naturally ignore most of it. It is how we survive. And banking is so utilitarian in form that it is an emotionally un-intensive category. Everyone believes a bank is a bank. Once you open an account you stay put.

Credit union’s marketing self-destructs

Talk to any credit union and they all have the same main problems (credit union troubles).

  • Younger folks are not joining them in high enough numbers. Their membership is aging.
  • Most members do not consider the credit union as their primary bank. Members keep their serious money at a traditional bank.
  • Bank customers don’t switch. Most credit union marketers blame this on the prospects. “They don’t understand the credit union difference” is the internal refrain.

But ask most to explain the credit union difference in a few words and you get paragraphs.

That is the disaster recipe. Complicated and poorly communicated.

But it gets worse.

“The majority of prospects overlook the credit union importance. They erroneously look at credit unions as banks’ ugly cousins. Those are the primary credit union troubles.”

Credit union names

The majority of prospects overlook the credit union importance. They erroneously look at credit unions as banks’ ugly cousins. Those are the primary credit union troubles. But why?

Look at some of the credit union names in the market. To call them trite is understating the issue.

So, you want to be taken seriously? Then find a serious name. Not some trite contrivance. Some of the moment nomenclature that ages out in a few years.

Most are so bad, I won’t list them. Look them up as a party joke.

Name your charter

Make it easy to understand that the credit union is for me. Choose a community name, a geography — choose something that says, “you can join.”

Then build your brand around your values and goals.

Here is my all-time favorite credit union joke name. Self-Help Credit Union.

I understand the sentiment. It reflects the desire for members to help themselves. To be self-reliant. To control destinies.

But, would you want that name on the checks you send? Imaging if my company, Stealing Share, paid its bills on checks drawn from Self-Help.

Sounds like the inner confines of a drug rehabilitation property.

Sorry, but no thanks.

Credit Unions — no trite names

Any name would be better than Self-Help. John’s Credit Union would be better.

The idea of self-help should be in the theme line. Something like “be the boss of your finances.”

Of course, if your name is John’s Credit Union, it would be difficult to not put parking decks on the roof. Everyone would like to say they are parked on the john.

Well, maybe I need to work more on that one.

See more posts in the following related categories: credit union marketing


  1. tarry truitt

    It’s true about the names but my experience has been better service, and better rates on car loans. But more important, due to my community work, Credit unions have offer accessible for low-income households! I gave interesting data we have colkected about banking and bill paying practices. it will be interesting to see more people just use online banking. yes, credit unions need better names!

    • Tom Dougherty

      Credit Unions are trying hard to be good citizens. But, that mission is lost on most prospects. A name change is a symptom, not a cause. When you feel important, as they should, they should never treat their brand as trite in anyway.


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