The Rundown

• Membership growth doubled in October.
• CU sees shift toward local choices with financialrelationships.
• Building relationships, existing penetration amonglong-term goals.

For many credit unions, Bank of America's failed attempt tocharge a $5 monthly debit card usage fee sent their membershipnumbers up the charts.

The $1.3 billion Arizona State Credit Union likes to think thatits recent uptick in new members is more connected to the wayconsumers are starting to view their relationships.

“We have been seeing a swing in buying habits to more localchoices in doing business. Consumers see the real value in doingbusiness locally, whether it's buying produce from local farmers orchoosing a credit union,” said Paul Stull, senior vice president ofstrategy and brand at Arizona State CU.

Nearly 2,000 members joined the credit union in October,according to Stull. That's 1,000 more new members than what ArizonaState CU normally added each month. Since September, there has beena 25% lift in new accounts, and Stull expected this effort tocontinue up to Bank Transfer Day on Nov. 5.

Founded in 1951, the credit union serves more than 128,000members and has 21 branches across the state.

Stull said while the Bank of America proposed fee increase wasthe catalyst for some of the membership growth–one branch reportedhalf of its new accounts were caused by the backlash toward thenational, multibillion dollar bank–securing those alliances mayprove to be the real long-term test.

“Local deposits mean local loans and that creates jobs. Consumers are looking forthat kind of value,” Stull said.

Generally, Arizona State CU seeks to exceed the 3% industryaverage when it comes to membership growth, Stull pointed out. Thatbeing said, it still would target higher numbers in growth markets,he added. With less than two months left in 2011, the credit unionis ahead of its growth goals. Still, focusing on reaching a certainpercentage does increase prospects. but the credit union tends tolook inward to build.

“We would rather look at our ability to penetrate existingmembers and markets than track membership as an indicator ofsuccess,” Stull said.

As for Bank Transfer Day, Stull said the credit union didn'tplan any specific links tied to the call for consumers to switchtheir financial institutions. For several months prior, ArizonaState CU ran a major media campaign with the message “I Don't Bank,I Credit Union!” He said the message had perfect timing, and thetelevision spot resonated very well, leading to an increase inawareness of what the credit union had to offer.

Over the past 10 months, Stull said Arizona State CU also loanedout more than $227 million to help businesses and membersthrough a still troubled economy. The credit union also touts nothaving any restrictions on debit card use and its free electronicservices.

“Banks have done a good job of showing how different they arefrom credit unions. Consumer sentiment around too big to fail banksis clear,” Stull said. “They are tired of higher fees, less serviceand billion-dollar bonus packages at the same time banks areposting record earnings.”

On the other hand, not-for-profit financial cooperatives “areeasy to understand and promise an outstanding value propositionthat benefits both the consumer and the community,” Stulloffered.

In a market where Arizona State CU competes with banks such asBofA, Wells Fargo and JPMorgan Chase, Stull said in the midst ofso-called anti-bank sentiment, credit unions have once again becomean alternative for consumers.

“Credit unions are an important part of the American financialsystem. They have provided an opportunity for consumers to makechoices and have served as a way to balance the unilateraldecisions of the too big to fail banks,” Stull said.

He called on credit unions to highlight how they are valuablelocal resources that offer alternative fee choices and otherbenefits to the community.

“These are the new values that continue to deepen among many keyconsumer segments,” Stull said.