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Financial Counseling Curbs Loan Losses, Helps Members

Members are desperately seeking help to deal with debt.

October 27, 2010
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Offering phone-based financial counseling helps credit unions reduce loan losses while helping members deal with debt, according to a new case study from CUNA Strategic Services and Accel Members Financial Counseling.

“Finding Hope with a Phone Call” studies the experiences of four credit unions that use telephone-based services provided by Accel:

  • DuPage Credit Union, Naperville, Ill. ($272 million in assets);
  • Genisys Credit Union, Auburn Hills, Mich. ($1.35 billion in assets);
  • SECU, Linthicum, Md., ($2.2 billion in assets); and
  • Wanigas Credit Union, Saginaw, Mich. ($230 million in assets).

Subscribe to Credit Union MagazineThe case study reveals that:

Members are desperately seeking help to deal with debt. Case study participants say that more than half of members who contact Accel are seeking debt management plans. Other debt and budget issues account for more than one-fifth of calls.

Debt management plans pay off. Wanigas Credit Union has received $74,000 from members through debt management plans since 2007, when it began offering Accel services. As of mid-2010, Wanigas members were making payments on another $93,069 in debt.

Link members to help before they lose hope. Participating credit unions say telephone access is vital so members can seek help six days a week, including evenings.

Staff referrals motivate members. Staff referrals accounted for roughly half of calls made by DuPage and SECU members. Word-of-mouth recommendations also contribute, prompting 14% of Wanigas members’ calls to Accel.

Improving members’ financial practices helps them qualify for more services.

Offering budgeting and credit score education helps members adopt better financial practices so they can successfully apply for mortgages and other products.

The case study also includes best practices for increasing the impact of telephone-based financial counseling.

Case study participants recommend these best practices to increase Accel’s impact:

  • Educate staff about how and when to refer members for counseling;
  • Promote financial counseling as a member benefit;
  • Build counseling referrals into annual goals for branch managers, collection specialists, loan officers, and other staff who have frequent contact with members;
  • Refer members who fail to qualify for loans to a financial counseling provider;
  • Measure results;
  • Promote counseling services to boost member participation, decrease loan losses, and provide alternatives to bankruptcy; and
  • Use counseling to help troubled employees.

Accel is a division of GreenPath Debt Solutions, which is based in Farmington Hills, Mich. It’s a CUNA Strategic Services alliance provider.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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