COLUMBIA, S.C. — In a state with an unemployment rate running as high as 14%, credit unions stepped up their financial counseling programs at year-end as they also searched out new ways to ease member pain on auto, mortgage and consumer loans.
"I can't say things will get better any time soon, but we are working very hard to keep those many unemployed members in the mills from losing their home or auto," said Bruce Brumfield, president/CEO of the $1.5 billion Founders FCU of Lancaster, which witnessed its delinquency ratio climb in 2008 to 1.3%, above the national 1.0% average.
The only good news, said Brumfield, is that Founders' real estate portfolio has remained stable even though the CU waives payments and cuts rates as it counsels working couples "to give up the extra car so they can keep the home from going into default."
Underscoring beefed up financial education and counseling, the $1.4 billion South Carolina FCU of North Charleston said it witnessed a whopping 60% increase in attendance at its free financial education seminars during 2008.
And for the first time, the $220 million Family Trust FCU of Rock Hill said it would be paying for free credit counseling services for its members under a newly inked contract with a local agency. Family Trust recently dropped the phone-based BALANCE program used by scores of CUs across the U.S.
"There's nothing wrong with BALANCE, but in our area we felt we needed to take this to a new level with a more personal, face-to-face approach with our members as we try to control delinquencies," said Ronald Miller, senior vice president of loan administration.
And elsewhere, the $10.5 million Greater Abbeville FCU said during the holidays, it began offering its members the option of two skipped loan payments for one fee as compared to the standard one-skip practice.
"This may not sound like such a big deal at first, but our members tell us it allows them to fund their family's Christmas and get through the year-end period of unemployment," said Faye Crocker, president/CEO.
Regarding the big spike in financial education programming, South Carolina FCU, for one, said its original goal for free public and in-school seminars for 2008 was 2,100 participants but by June that was surpassed, "winding up with 4,906 attending by the end of November," said Kimberly Riggs, public relations manager.
Separately, the $1.4 billion CU in November also tapped one of its marketing managers, Leslie Howard, to devote full time to meeting with SEGs "to extend free financial workshops to their workforces."
"We know that employees burdened by financial strain are less productive, less likely to reach their full potential, and more likely to be absent from work," said Howard.
Howard's department has been distributing financial education tools on a monthly basis to the SEGs, and the material has included advice tips for company newsletters, posters, break room fliers and Internet data, all aimed at reaching employees.
Additionally, Howard, who is bilingual in Spanish, has served as a general financial education contact for HR departments.
Effective last month, SCFCU, also launched Quicken's FinanceWorks online program to help members track their finances and control spending and saving. "We are the first in our market to offer this tool live to iTeller, our online bank system, making it visible on our Web site on Jan. 5," said Riggs.
In discussing SCFCU outreach, President/CEO Scott Woods said that CUs "now, more than ever, are being called to serve an important social purpose," and "social responsibility is a key differentiator that distinguishes credit unions among financial institutions."
Founders in Lancaster, which has experienced 12% unemployment, said its efforts to help struggling members were underscored by a special year-end dividend of $6 million paid Nov. 30. "We do it every couple of years, but we decided 2008 was certainly the right year for that," said Brumfield.
For its overall efforts to aid communities, Founders also received favorable media coverage including a featured article in The Chester News & Reporter, highlighting the travails of a 61-year-old mill worker, Virginia Miller who was laid off from her job days before Christmas and found only "compassion, understanding, comfort and hope" from Founders' employees who helped reorganize her debts.
In assessing the causes of what one official of the South Carolina Credit Union League called the state's "economic crisis," Crocker of Greater Abbeville FCU blamed the loss of jobs on so many manufacturers "moving out of the country." Crocker added that the state's many rural towns are now dying because so many were developed around manufacturing facilities.
–jrubenstein@cutimes.com

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In Hard-Hit South Carolina, CUs Stake Out Loan Relief, Counseling

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