NORTHVILLE TOWNSHIP, Mich. – CUcorp, the wholly-owned subsidiary of the Michigan Credit Union League, and AAA Michigan have had a relationship since the early 1970s that let credit unions, through group referral programs, enjoy exclusive discounts from the company for various services. Now the two organizations have taken their relationship to a new “unprecedented” level. Effective Feb. 1, CUcorp and Auto Club Group, the holding company for AAA Michigan, announced a long-term joint marketing contract through which AAA Michigan will serve as the preferred provider of AAA Michigan membership, travel, insurance and investment services to Michigan credit union members. In addition, AAA Michigan will use various marketing tools to showcase Michigan credit unions for the 1.7 million AAA members in the state as the preferred solution for deposit products, consumer loans, mortgage loans, and other depository institution services. The collaboration is called “Members Together.” “This is an extremely exciting opportunity for credit unions. I've been a league president for 17 years and I've never seen anything like this for impact and opportunity to drive membership and products for credit unions,” says MCUL President/CEO Dave Adams, who was president/CEO of the Washington Credit Union League prior to his current position. AAA has 59 million members in the U.S. and Canada. Though the association is often associated with travelers' assistance/planning and automotive services, AAA Michigan also has the leading market share in auto insurance and runs neck-and-neck with State Farm in auto and homeowners insurance. Adams, who is also CEO of CUcorp, says one of the factors that has helped AAA Michigan build such a “commanding lead” in the state is the relationships it has with credit unions by offering them exclusive member discounts for auto and home insurance as well as Auto Club membership. “Over the years AAA Michigan has established relationships with banks for credit cards and auto loans, but they were looking at how to provide depository services for their policyholders,” says Adams, adding that despite AAA Michigan's bank relationships, the association “had indicated a willingness to us to exit those relationships in favor of working with us.” Adams continued to explain that, “It was a friction point for Michigan credit unions to be partners with a company that was also partners with banks. With our new long-term contract, we're taking the bank referral relationship out of the equation, with that business now going back to credit unions, and credit union business going to AAA Michigan. So it's going to go in both directions.” According to Adams, CUcorp's role will be to channel business back to Michigan credit unions as being the AAA Michigan preferred financial provider. Under the terms of Members Together, AAA Michigan will work with CUcorp to create marketing strategies that promote credit union loans and deposits to members of the Auto Club. “AAA is perceived as a strong value brand, and so are credit unions. So now they'll be more closely aligned,” he says. Michigan credit unions have about 4.4 million members in total. The unified product lineup will be marketed through 370 credit unions in the state, at each of AAA Michigan's 156 office locations and through call centers. “The strength of the credit union and AAA Michigan brands will create valuable synergies for consumers,” says Adams. “More than 260 Michigan credit unions already market AAA Michigan products to their members. This agreement will create a new model that is more credit union-friendly, allowing greater opportunities for the promotion of credit union services to AAA Michigan club members.” While CUcorp and AAA Michigan have had a relationship for more than 20 years, Adams said the Michigan League pursued a more extensive relationship more aggressively recently than in the past because of the way financial services has evolved. “AAA was at a critical turning point and had to decide whether to strengthen its relationship with credit unions or be aligned with banks. They chose credit unions, and CUcorp will be the catalyst for product available and also to make the partnership stronger,” he says. Adams says the new extended partnership will be a “fully integrated approach.” While there are still a lot of details still in the strategy phase, he shared one of them with Credit Union Times – CUcorp is going to see if it can get credit union shared service centers in “some or all” of AAA's 156 field offices. “If we're able to get a credit union presence in each of those then that will expanded the credit union shared branching network tremendously. Imagin the AAA Web site with promotions of credit union products,” says Adams. The Michigan League CEO said the technology interface still needs to be built and CUcorp also wants to get input from member credit unions, but it hopes to have all the pieces in place within the next six months. If everything goes as planned, Adams says CUcorp will be able to structure any inquiry from credit union members or non-members in such a way that all credit unions, regardless of their asset size, will have equal opportunity for member business. In addition, non-members will be matched up against a database of credit unions they're eligible to join based on their personal information. Adams says a planning team has already been set up consisting of senior staff of AAA Michigan and CUcorp to work through the logistics of shared service center, call center and Web site opportunities. The partnership is an opportunity not only for credit unions to generate new products, but also a membership opportunity, says Adams. Now that the long-term contract has become effective, he says the next step will be setting up an advisory group forum to discuss strategies because “we want to make sure the strategizing is credit union driven.” “Just imagine the volume of business that will result for credit unions and AAA if we do this right,” Adams says. “We think there will be a huge volume of business created for both partners.” -

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