Education is key to unlocking credit unions home equity loan success

WAYNESBORO, Va. - A lot of promotions just talk about a product but sometimes taking the time to provide a simple definition of the product can go a long way. When DuPont Community Credit Union decided to educate its members on equity, its home equity loan portfolio reaped the benefits. "We have a down home philosophy that emphasizes providing services that our members can use rather than what we want to sell them," said Marketing Coordinator Dianne Reasons. After comparing its first mortgage loans to its home equity loans, DCCU realized 1,400 members had untapped equity in their homes. Reasons attributes the low home equity loan growth to members and staff not understanding its value. "With an APR of prime minus 1/2, the home equity loan should have been a no brainer. We knew the only way to make our members aware of its importance was through member education," said Reasons. DCCU stretched its advertising dollars thanks to in-house printing and the creation of a simple formula and a chart. The formula taught members how to calculate their equity, the benefits of having a home equity loan and how payments will work. The formula, printed on flyers and deposit envelopes, was displayed throughout the branch. Fifty letters with comparison charts of current monthly payments versus home equity monthly payments were sent weekly period to those members with equity over a six to seven month . The grand total of the education campaign-$1,020. "It was important for us to come up with a simple, straightforward tool that would be convenient for members to carry," said Reasons. As of February 29, DCCU's home equity loans totaled $14,177,949. As of March 1, seventy-six more applications for a total loan value of $2,478,000 had been received and nearly one-third had already been disbursed. "Our marketing philosophy is to provide the best service before our members ask for it. We always put everything on the table so our members can know and understand all the services we offer," said Reasons. -mbourjolly@cutimes.com