LEBANON, Ind.–NorthPark Community Credit Union said it has now gone fully virtual and has closed its three branches, creating savings it said allowed it to pay a bonus dividend.
The $46.6-million NorthPark Community said it is the first to go 100% virtual in order to better serve its low-income community.
“We serve low-income individuals, and when we spoke to our members they were saying, ‘We can’t take off work to come to the credit union,’” said CEO Carma Parrish. “They work the same hours as us, and they don't get a long enough lunch break to be able to come in, so that's really hard for them.
“They also do not like to apply for a loan in person, because they're so afraid of being rejected and the embarrassment of having to walk out after being denied,” Parrish added. “They are used to applying online because it's easier and faster.”
‘Makes Sense’
Parrish further noted that many of its approximately 5,000 members also don’t own cars, which makes it difficult to visit its offices in person. “This is a good strategy that makes sense for who we serve,” she added.
NorthPark CCU reported it began its journey of transitioning to being virtual in 2015 when Parrish came to the credit union.
“Every piece of hardware we purchased we made sure was compatible for virtual,” she stated.
In 2018, the board agreed to transition the membership to virtual, as well as the staff, to position the credit union for growth.
“As a small credit union, we can’t add staff easily, so we needed a way to reallocate our most expensive resources,” Parrish added.
The credit union began educating and encouraging members who came into its physical branches to do their transactions virtually.
‘Far Ahead’ of the Challenge
The credit union said by the time the pandemic hit in March of 2020 it was “far ahead” of the demand to switch everything virtual.
According to the credit union, in early 2020 it had already shut down the first of three branches and was planning to shut down the second. The third branch, with a significant amount of traffic, only began the remote transition mid-year 2019 and within six months was able to reduce branch traffic by 25%.
NorthPark Community is reporting that in the time it has gone virtual it has saved more than $100,000 in operating expenses, increased direct new loan volume by 80% and has hired employees for “quality without being confined by geography.”
In addition, NPCCU was able to pay members a $50,000 bonus dividend due to the cost savings, while also extending its service hours.
Communications Firm Retained
To assist with the effort, the credit union has retained Your Marketing Co. in Greenville, S.C.
“We are very excited to start working with Carma and her team at NorthPark,” Your Marketing Co. CEO Bo McDonald said. “Her credit union has seen the future and taken the bold and necessary steps to preserve the future of the credit union for its members. Moving fully remote is only proving its relevance to its members and that’s what we like to see from all credit unions, but especially smaller ones like NorthPark.”
NorthPark Community is a designated Community Development Financial Institution through the U.S. Treasury Department and low-income designated. The credit union serves the Indianapolis area, which has an average income of less than $30,000 annually according to the 2019 US census data, significantly below the national average of $36,000.