Instead of retreating as the impact of the recession spread, Erie (Pa.) Federal Credit Union made a strategic decision to extend the reach of its lending programs.
Erie Federal’s multi-faceted loan outreach efforts resulted in a 22.7% increase in loan volume in 2009, earning the $324 million asset credit union a 2010 Excellence in Lending Award from CUNA Mutual Group and the CUNA Lending Council.
Erie Federal built on business lending services launched a year earlier with the introduction of a Merchant Loan Program to allow current and potential members to apply for credit union financing at 18 participating merchants.
In 2009, 27 Merchant Loan Program loans totaling $208,566 helped foster a stronger working relationship with local businesses.
Erie Federal also introduced a Home Rebate Program to encourage local realtors to bring mortgages to the credit union. The four realtors who joined the program in 2009 offered a 25% rebate on their commission to Erie Federal members who worked with them to purchase a home.
The credit union originated 123 mortgages in 2009 totaling $14.9 million.
The expansion of Erie Federal’s community charter to include Crawford County also offered opportunities for expansion, as 13 new auto dealers joined the indirect lending program.
While new programs were supported by a slight increase in its budget for traditional advertising, Erie Federal used free or low-cost marketing options whenever possible.
- Listing all credit union activities in the local newspaper’s free weekly calendar of events;
- Expanding the use of press releases to local media;
- Increasing the use of e-mail marketing and website banner ads; and
- Cultivating media relationships, leading to a CEO interview and additional coverage of its financial programs.
Erie Federal also looked for new ways to use traditional promotions to boost loan volume. For example, auto loan coupons once reserved only for newspaper ads are now used to offer a 0.25% interest-rate reduction at trade shows, community events, and seminars.
Combined with other measures, the coupons helped the credit union obtain almost 500 auto loan applications per month. It approved 3,400 auto loans in 2009.
Risk and referrals
Erie Federal enhances its risk management efforts with new positions, including a lending audit supervisor, a lending quality control specialist, a collections employee, and an indirect lending employee.
This proactive approach resulted in loan delinquency of only 0.64% and a net charge-off ratio of 0.25% in 2009.
Behind the scenes, Erie Federal introduced the Synapsys enhancement to its Symitar operating system in August 2009 to make it easier for front-line employees to refer prospects to loan officers.
The auto lending department also uses Synapsys to track progress on loan applications, ensuring a significantly higher volume of indirect loan applications.
In lending and throughout the credit union, Erie Federal achieved record growth in 2009. At the same time, it embraced new strategies for reaching out to the community.
For example, the credit union lowered the minimum balance requirement for savings accounts from $50 to $5.
By making it easier for area residents to become members, Erie hopes to continue to expand the number of current and potential members seeking credit union services.
View the award-winning entry here.