Are you missing the boat when it comes to youth services?
Miller, Bonnie S
While most credit unions offer a kids’ club program, they’re missing the boat if they don’t provide a teen program to move the kids into a variety of financial services, including education,” says Steve Carr, vice president of business development at Boulder Valley Credit Union (BVCU), Boulder, Colo.
No longer will a basic savings account with coloring books, pencils, or other token awards attract youth and build lifetime relationships. Offering more to minors is the only way to secure the loyalty of young adults, a market in which credit unions have always been weak (Fig. 1).
But does your credit union have the innovative services and comprehensive programs that appeal to members under the age of 18?
Beyond basic savings
Basic savings accounts are a beginning, but it’s time to step beyond. Credit unions cannot ignore the fact that a great number of young members are computer literate and “surf the Net.” Interesting Web pages with a variety of activities educate young members to the benefits of credit union membership, saving and managing their money, and planning for the future. Web pages also can encourage other youth to seek credit union membership.
“Today’s teens want checking accounts, ATM cards, small loans, and Internet banking access,” Carr says.
BVCU, with $82 million in assets and 15,000 members, including 2,500 youth accounts, offers a program called Y.E.S. (Young Educated Savers). Y.E.S. members aged 14 to 17 can open a checking account, obtain an ATM card, and apply for a loan or a VISA card with a parent or guardian co-signer. “We want teens to have the opportunity to experience these types of accounts before they reach 18,” says Carr. While some believe that offering loans to teenagers is reckless, Carr believes that if handled appropriately, loans can be the perfect bridge to successful money management when teenagers turn 18 and typically move away.
Further, BVCU educates its young members to be successful money managers. Carr asserts that providing financial services without education or education without financial services is only half of the equation. He says, “You must provide educational opportunities with hands-on experience to get teens involved and educated.” To that end, BVCU sponsors school programs, assists with fundraisers, offers credit union tours, and awards $300 to the two schools booking the most classroom presentations during the school year.
Savvy choices
Washington School Employees Credit Union (WSECU) in Seattle, with 65,000 members and $370 million in assets, also believes in teaching its young members to make the most of its financial services. WSECU starts them early with Savvy Savers, a savings program for children up to age 12. Members of this youth club pay no monthly service charge, receive quarterly statements, birthday cards, and a Savvy Says semiannual newsletter. They have an area on the credit union’s Web site, which shows young members how to earn and save their money and allows them to check their accounts online.
WSECU, which serves the whole state with one office, also provides a program for young members 13 to 17. Called Choices, the program offers savings and checking accounts as well as an ATM card and co-signed loans up to $ 1,000. Members in this program pay no monthly service charges, receive monthly account statements, and a semiannual newsletter, Choices Connection, which contains helpful financial advice.
The Choices program also has a Choices Connection Web site with topics of interest such as how much it costs to own and operate a car, how loan interest accumulates, and how an ATM card works. Young members can use the Internet for their financial transactions with no restrictions the same as adult members.
With the Choices loan program, a young member with a job, even one as modest as delivering newspapers, can apply for a lowinterest loan from $200 to $1,000. A parent or guardian must co-sign for the loan, of course, and the youth must repay it in 12 to 15 months. What’s more, young members can apply for these loans online.
Currently, WSECU has approximately 3,500 young members in its youth programs. Both are successful and continue to grow because they appeal to young members and the credit union is committed to making them work. In fact, membership in the Choices program has doubled in the last year, and the Savvy Savers Club membership has increased by 50 percent.
During the holidays, especially, the credit union advertises its youth programs to parents and grandparents. It suggests that they “Give the Gift of Financial Security” to a child or grandchild by contributing to an existing credit union account or by opening a youth account. The credit union advertises to its retired members who may have grandchildren eligible for membership.
Joann Blalock, WSECU’s financial services manager, says, “We’re currently looking at the possibility of offering a sharesecured credit card for youth sometime next year.” At one time, this credit union offered only conservative products for adult members. Now its youth programs are up-to-date and growing, an assurance that the credit union itself will continue to grow.
The next generation
Another credit union with insight into serving its young members is Golden 1 Credit Union in Sacramento, Calif., with nearly 400,000 members and $3 billion in assets. Because Golden 1 understands that children under 18 need experience in handling their own accounts, it developed the Next Generation Club. The club offers products and services designed exclusively for young members, including ATM cards, college savings accounts, education IRAs, and telephone and online access to their accounts.
Golden 1 designed its youth programs to teach children and young adults the importance of saving and managing their own money. Growth in the Next Generation Club has been slow but steady. All online services are available to young members who qualify. in the past two months, online access by all members has doubled.
All three of these credit unions are helping their young members learn to manage money through special programs and up-to-date, online services, They’re going beyond basic savings to build relationships with their young members that will last no matter what distant ports they might sail to.
Bonnie S. Miller is the former marketing director for Suncoast Schools FCU in Tampa, Fla. You can reach her by email at bonnie@sunstarcom.net.
Copyright Credit Union National Association, Inc. Jan 2001
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