ST. PAUL, Minn. — Amid the new anxiety over the economy, the $705 million Hiway Federal Credit Union is discovering that its year-old credit counseling program is paying off after it signed on with a Minneapolis agency.
Its linkup with the nonprofit Lutheran Social Service Financial Counseling in which the CU pays for free counseling and budget sessions to members, including at home phone calls, has doubled participation and is reducing expenses.
LSS, a member of the National Foundation for Credit Counseling, said its partnership with Hiway involving regular workshops, seminars and the home calling represents an expansion by the agency as it signs up more Minnesota CUs for its Financial Choice program.
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A second CU and early partner in the LSS program along with Hiway was been USFCU of Burnsville.
In a statement, Jeff Schwalen, the president/CEO of Hiway, said its use of LSS reflects a proactive approach to counseling by helping debt-stressed members "before they are in over their heads."
In adopting LSS in January 2007, the CU said the program also has been favorably received by employees who like the local nature of dealing face-to-face with members.
Hiway, like USFCU, had previously used BALANCE, the San Francisco firm that offers a broad counseling package and long distance counselors.
BALANCE, which started 11 years ago and has mushroomed to more than 475 CUs, acknowledged that CUs have freedom of choice when it comes to picking counseling programs, but that its services are more extensive and customized for local application.
For its members, Hiway said it has been using LSS budget counseling as a requirement to modify their car loan or other products. The St. Paul CU said it also has found LSS helpful in its knowledge of local resources and laws.
In addition to basic financial counseling, said Hiway, LSS provides four free financial education workshops per year plus seminars on such topics as improving credit and identity theft prevention.
"LSS has also presented multiple training sessions to Hiway employees to develop confidence in referring members and promoting the service as a free benefit," said Hiway.
Hiway said momentum has been building in the program over the past year with LSS serving approximately 50 Hiway members per quarter for in-depth budget and financial counseling. For its part, LSS contends the Hiway venture is a model for other Minnesota CUs and that it counts 165 separate member participations or attendance in its Hiway application.
The firm, which has offices across the state and major operations in Duluth, also provides a counselor on call service, phoning members at home who seek help during 10-15 minute coaching sessions, said Darryl Dahlheimer, LSS Minneapolis program manager. Dahlheimer compared the service to first or second line health care in which "if you can't reach the doctor you can talk to the nurse."
Hiway has said its counseling program usage "has doubled from the previous year and we attribute this in part to the strength of the relationship between Hiway staff and LSS counselors."
Without mentioning BALANCE, Hiway concluded its positive experience has occurred "at a lower cost than our previous provider, decreasing by 40%"
Joanne Budde, the president of BALANCE, said in San Francisco she understands the value of the LSS program to local CUs but that "we have a proven track record adopted" successfully by the largest CUs in the nation.
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