CHICAGO -- Ed Jacob, CEO of the $7 million North Side Federal Credit Union said "mid-tier" financial service providers around the credit union, the payday lenders, check cashers, rent-to-own outfits, and other similar services are his credit union's competition.
"Most of the banks in my area seem to have their sights set on more up-market consumers," Jacob explained. "They run offers for things like iPods for new account openings. They really aren't interested in the sorts of consumer who tend to be my members."
Jacob reported that his thinking on how to compete has undergone some evolution over the years, moving from an attitude of wanting to help his members adopt attitudes he wanted them to have to help his members with the attitudes and situations they actually have.
"Sure, I could say 'I wish you would save more' or 'why don't you work with me to see about meeting some long term goals' but if that's not where they are, that's not where they are," Jacob explained. In response he said North Side has sought out strong partners to help it offer a variety of services, like free or low cost tax preparation, which are not traditional financial service products. The busiest lately, he said, was a housing counseling service the CU started just at the time the current mortgage crisis began. "I'm sorry to say that's been one of the busiest parts of our credit union recently," he said.