AUSTIN, Texas—The $29-million Travis County CU increased its loan portfolio by 51% over the last five years and boosted assets by $6 million, thanks to a little sacrifice and a plan.
“The loan portfolio had been flat for years,” said CEO Wayne Watters, who stepped in to lead the CU a little more than five years ago. “We had been taking advantage of our good, dependable borrowers, but we had not been reaching out to more of our members and to the community.”
Watters said that led to loan growth remaining flat for about 10 years.
“As loans paid off from this group of members we got new ones, but not much more,” said Watters, adding that in 2015 alone the one-branch CU grew loans in excess of 16%. Assets improved to $29 million from $27.5 million the previous year.
“Until we made some changes, and we knew it would mean attacking this issue on all fronts, we just could not get past $10 million in the portfolio,” explained Watters, noting that loans on hand now exceed $15.5 million.
Finding The Dollars
But to make its moves, the small credit union had to find the money to finance the new objectives—the most critical being online opening and closing of loans and a coordinated marketing campaign.
“We had to make some sacrifices,” said Watters. “Instead of sending our board offsite for training, we now use NAFCU’s online training tools and conduct board training onsite. That saves us airfare and other travel costs, as well as individual registration for each training event.”
The credit union also re-assessed vendor contracts and reduced the number of phone lines coming into its office to save on the monthly phone bill. TCCU switched to a voiceover IP instead of paying for multiple phone lines.
A portion of those savings paid for technology to make the loan experience easier and simpler for members. The credit union added remote signature, and with new online loan applications TCCU began opening and closing loans remotely. Now 75% of its loans are closed online.
“We also added online payments, so members don’t have to interrupt their daily routine to utilize the services of the credit union,” said Watters.
Tech Curve
But there was a learning curve to the technology, with staff and members having to orient themselves to the new procedures.
“It wasn’t simple at first, and we knew that would be the case,” said Watters, adding that the TCCU knew a big payoff was coming. “Both sides had to learn—staff had to become comfortable with the online opening and closing procedures and not default back to paper.”
Then there were the members, who had to be coached.
Wayne Watters with staff member on 'Theme Day'
“In many situations, the first time one of our members used the new service, the experience of going through the loan process was about the same,” explained Watters. “We would be on the phone with them as they pulled up the link to the e-signature and online account opening process and authenticated themselves. Then we went through the documents and coached them as to where to sign and what fields to complete. So in the beginning, it was actually taking us as long—or longer—than using the old paper process.”
The budget was redirected, as well, to invest more dollars in the marketing of loans, which included a “high-quality” coordinated e-mail campaign that the CU had not executed before. Travis County Crdit Union also started using Melissa Data to capture addresses of those new to the community, sending them postcards that welcomed them to town and letting them know about the credit union and its services.
“We really had not been getting the word out about the credit union and our loan products,” said Watters. “Now we are.”
Theme Days
TCCU also started using “theme days” to make the average trip to the credit union a different experience, said Watters. Theme days often focus on different types of vacations. Forexample, to get members thinking about a trip to Las Vegas staff dress up as casino dealers. For a Yosemite trip, tents are pitched in the lobby and employees wear hiking gear.
“The staff and the members enjoy these experiences, they make the credit union stand out,” said Watters, who noted that theme days, as well, often create a buzz throughout the CU’s SEGs.
Just as important as the new technology and marketing was getting the eight-person member-facing team to buy into the new lending emphasis, said Watters.
The CEO explained that before the changes were made, staff often did not see the “big picture” goals of the credit union and simply focused on “doing their specific jobs.” Watters now makes sure all employees understand the CU’s key goals for the year and how the credit union is progressing each month against them.
Staff now fill out weekly “report cards” that list what they have accomplished each day, such as new accounts opened and loans processed. That information is then use in coaching sessions.
Loan Push
When the loan push began five years ago, sales incentives were added for the first time, explained Watters. Each of the credit union’s products and services has a point value associated with it. Employees accumulate points that are turned in quarterly for cash.
Watters emphasized that the lending growth has not come with higher delinquencies. TCCU’s current delinquencies stand at 0.0%, and charge-offs were .04% at the close of 2015.
“We take loan payments via ACH, by phone and via our website,” said Watters. “The minute a member is late we contact them and give them an avenue to make the payment.”
In addition to improving lending, the changes the CU has made have improved its image within the community, key to the small credit union’s future, said Watters.
“In my mind we need to impress our members enough so they stay,” said Watters “We are littered with banking options in this town. So, although we are small, we have to give members the feeling we are bigger than we are. That means not just home banking but remote deposit capture, remote signature, mobile—all the tools the big guys have so we feel like a $500-million credit union to our members.”