Single Sponsorship Doesn't Dampen Competitive Spirit
TEMPE, Ariz. -- Sometimes the problem of CU competition is complicated by single sponsor status. Take the $20.3 million Basha's Associates Credit Union in Tempe, Ariz.
Basha's is a 162-store Arizona supermarket chain whose employees are members of the CU but Gloria Mundy, president/CEO, finds her CU competing with Wells Fargo Bank.
Said Mundy, "Our main competition is the Wells Fargo Banks located inside our sponsor's locations. A lot of our members that we approach about a checking account say they have it with the bank in the store. The bank has more branches and ATMs than we do that they can use without a fee. Plus, it is very convenient for the member.
"We stress to our members with direct deposit or payroll deduction they can access their account with a debit card or use another credit union ATM to access their funds. We will be offering a bill payer program in March along with our new type checking accounts. Based on the type of checking account and different services will allow the member to have the bill payer program without a fee.
"To be more convenient we participate in shared branching and our sponsor has allowed us to place ATMs in one of their subsidiaries, Food City Stores, and so we now have 29 ATM's.
"The fact is," she said, "we lose auto loans to banks even with the indirect program. Sometimes our member will finance for 5 basis points less. We now offer a 0.25 basic rate reduction on auto loans with direct deposit to try to be more competitive. We also advertise a 1% rate reduction to refinance your auto from an outside institution. Most auto loans that we refinance are financed with a bank."
Another CU facing bank competition is the $12 million Eastern Panhandle Community Credit Union in Martinsburg, W. Va. where Charlene Gaither, president/CEO finds it a struggle to match up with community banks which have sprouted up in her market.
"We run the gamut of BB&T to Summit plus local banks, and some of these seem to have very deep advertising pockets which makes it difficult for us. We try to promote 'the difference' and hope that the message gets across. The CU has been using newspaper special sections to promote products and has been trying home shows to plug home equity loans.
Charles Cockburn, president of the $486 million Watermark CU of Seattle, says its competitors vary by product whether it be checking account, money market or home equity. "Some managers make the mistake of looking at what other competitors are doing" as the competition, said Cockburn, when in reality "it's what the Charles Schwabs are doing" that remains important.