Lilly Credit Union Embarks on Major CUSO Expansion
INDIANAPOLIS -- The $727 million Eli Lilly Federal Credit Union may represent the most venerable of single sponsor credit unions in the U.S. and this year the Indianapolis CU is on a roll toward enlarging its Indiana profile under the CUSO umbrella.
Indeed, LFCU said last week it expects to add 15 CUs by yearend to a specialized auto buying service as well as expand a CU product line in such areas as mortgages, marketing, investments and legal advice.
"Based on our own track record, we feel we have something quite valuable to share with others through our CUSO," explained the energetic Lisa Schlehuber, the president/CEO who for months has embarked on an ambitious effort to reshape the CU drawing more CUSO income based on its field experience.
So far, Schlehuber is enthused about the reception the CUSO revamp has received as it has signed CUs across the state on a near weekly basis for its "Members Auto Source," a service to help members buy and price both new and used autos.
Since April, the Lilly CUSO, LCU Financial Services LLC, has partnered with 20 central Indiana dealers "to offer negotiated, no haggle pricing" to participating members.
At the same time, officials of LCU Financial Services have been in touch with the Indiana Credit Union League about further product linkups with CUs in the state.
On that score, the league has said it is exploring Lilly proposals and on a broader scale is looking to conduct a first-time gathering in November of all Indiana CUSOs which offer needed products to small Indiana CUs.
As for Lilly, Schlehuber, who became president/CEO of the CU two and a half years ago and is a former corporate finance executive for the drug maker, said that despite the CUSO overhaul the CU itself remains committed to its sponsor and nothing can change "the very strong and close ties" to the parent.
Still, the board and senior management of EFCU realized more than a year ago that the parent, while satisfied with the CU's product "really had no plans to expand its work force," she said.
The CU was already doing business with 80% of the firm's employees and so the CU felt it needed to find new opportunities to grow, thus deciding to market its own experience to small CUs, she said.
ELFCU, she said, has long been "inwardly focused" though it has broadened its services to become full service and now "we are more than just a company benefit."
The challenge "was to figure out how we can support the industry while maintaining ELFCU's strong financial position" and so the CUSO has become the prime vehicle or visionary instrument to work with other CUs.
The industry is based "on cooperation and collaboration" and so why not pursue that mission with a vigor and at the same time bring in revenue, she said.
Formed 10 years ago, the CUSO apart from the auto buying, investments and mortgages also peddles insurance services and provides Dell computer discounts and loans. "These services are primarily offered for the benefit of ELFCU's membership but they also may be utilized by individuals outside our FOM and by other credit unions," said Matt Snively, senior vice president of sales.
On the investments side, the CUSO, he said, employs four career professionals who manage $225 million in client assets and produces $1.7 million in GDC annually. The firm uses CUNA Mutual for broker/dealer services.
On legal services, the CUSO, he said, has partnered with two Indianapolis law firms to offer legal counsel in such areas as trusts, estates, real estate, adoption and family law.
And on Members Auto Source, the CUSO has four reps who request multiple prices on trades from retailers and wholesalers to ensure competitive bidding on trade-ins.
The CUSO, he said, earns a referral fee from its dealer partners "so the member does not pay any fee." There are presently eight CU partners for MAS with a combined audience of more than 200,000 members.
On insurance the CUSO offers AD&D and P&C policies through Ameriprise and pet insurance from PetFirst Health Care.
The partnership with Dell, he said, evolved when the computer maker approached the parent about offering discounted pricing to Lilly employees.
"Lilly did not see this offer as a core function of their benefits department so they referred Dell to us," said Snively. "We are able to offer a 12% discount on all Dell products with very favorable lending terms through a partnership with Dell Financial Services."
Underscoring its reach-out to other CUs, Schlehuber said though "I did not 'grow up' in the credit union industry" she has appreciated the collaborative effort within trade groups. Her CU belongs to CUNA, CUES, NAFCU, Filene Research and Callahan and thus "I am trying to learn as much as I can from industry and there are many."
She has been a member of the i3 Filene research group, is a member of the Indiana League's Finance and Audit Committee and was recently asked to serve as an advisor to Members United, the ELFCU corporate and to its core system provider, IntegraSys. She also participates in the MidWest CEO Roundtable.
Snively said one new area where ELFCU expects to expand is in marketing since the Indianapolis CU has already demonstrated what he said is a successful branching record in central Indiana.
"Let me tell you the people at Eli Lilly were a great help to us at our Greenwood branch where we had overlapping membership at a GM plant," said Tim Sallee, vice president-human resources/marketing at one of ELFCU's clients, the $70 million Horizon One Federal Credit Union of Indianapolis.
ELFCU turned out "to be a really good fit for us," in its ability to provide new services that his CU could not have afforded on its own, he said.