PLEASANTON, Calif.—Membership growth took off last year for Patelco CU, and so did a new program designed to save members money and drive deeper relationships.
Patelco’s Switch to Save program, which reviews members’ auto loan and credit cards they have elsewhere to see if the CU can lower rates, has saved members $11.6 million since it as introduced in late 2013.
“If the person is approved but we can’t lower at least one rate, they walk away with $25,” said CEO Erin Mendez.
In late February, the $4.2-billion Patelco charged a fixed 8.15% APR on its Visa card and 1.99% APR for its best auto rate.
Mendez said it is important that members and prospective members know the Switch to Save review moves quickly.
Speedy Decisions
“In 15 minutes or less we pull a credit report and go over credit card and auto loan statements to see if the person has any non-Patelco credit card with current balances that have a higher rate than 8.15%, any auto loan from another financial institution with a rate higher than 1.99%,” said Mendez, who added that the program does not charge a balance transfer fee.
At the end of the evaluation Patelco runs its “Switch to Save calculator” to show members how much they will save on a monthly payment and over the life of the loan. Non-members who choose to open an account have their membership fee waived.
Mendez said the program played a big part in the CU’s 22% loan growth last year.
“Approximately 15% of our 2014 auto loan origination balances came through the Switch to Save program, as well as approximately 21% of our 2014 Visa Platinum disbursements,” Mendez explained. “In 2014, we booked approximately $98.4 million dollars in credit card and auto loan dollar amounts combined.”
Patelco first piloted the program in the Sacramento area in early 2013, and due to its success, decided to roll it out to the entire branch network later the same year.
But Mendez emphasized there are no CU bottom-line dollar goals determining Switch to Save’s success. What’s most important, she said, is how much money the program saves members.
“By doing what is right for the member and helping to enrich their financial well-being we gain instant loyalty, which drives participation in our products and services,” she said. “By participation we mean offering specific products and services to our members at the time that makes the most sense for them – not selling them something they don’t need.”
Feel-Good Factor
There is also a “feel-good factor” in knowing that the CU is helping to improve the financial well-being of members, said Mendez. “The gratitude from our members after we have helped them with their financial fresh start keeps our teams motivated and encouraged to drive participation in Switch to Save.”
Mendez acknowledged the relationship-driving program is well-timed.
“We have had steady growth in our membership since 2012 with the largest increase in 2014—3%,” said Mendez. “We attribute this spike in membership to our focus on returning to our roots of member centricity, being focused on what our members’ needs are.”