LIVE OAK, Texas—Simplicity in its offerings—especially in new accounts and lending—as well as high checking penetration are being cited as among the key reasons Randolph Brooks FCU has been recognized as outperforming peers in a new analysis.
The credit union won a Crystal Performance Award from Raddon Financial Group, which recognizes credit unions for achieving a Top 10 ranking within the company’s Performance Index, a balanced scorecard measurement of growth, income, efficiency and margin management. Randolph-Brooks received an award for CUs above $500 million in assets.
Simplicity of products, pricing, and operations is behind the credit union’s strong financial performance, said Mary O’Rourke, EVP, chief of staff. That has households averaging more than four products—including a lot of checking accounts. Seventy-eight percent of the membership have an RBFCU share draft product.
“It’s all about saving members time and money,” said O’Rourke. “We want to make it as easy as possible for members to do business with us, and provide the best products and services we can.”
High Ranking
O’Rourke cited checking penetration as the main reason Randolph-Brooks stands high in the Raddon rankings. “We clearly have the best checking account in our market, and the easiest to understand and use,” she said, adding that RBFCU landed in the 99th percentile in Raddon’s checking rankings.
The $6.7-billion CU offers one checking account that carries no minimum balance requirement, no monthly service charge, pays 0.05% interest, and gives 10 cents back on every debit swipe. “And that is for signature or PIN transactions. So no hassle, no confusion,” said O’Rourke.
What also makes the checking account a big seller, said O’Rourke, is that it’s easy to open.
“Go to other financial institutions around here and you first have to choose from a number of checking products—find where you fit—and then go through a cumbersome opening process,” she said. “With our account, you can go online, click a button that says ‘open a checking account,’ and we pretty much do the rest for you.”
Checking Made Easy
When existing members click on the button they are asked if they want an individual or joint account and the rest is handled by the credit union.
“We immediately order them a debit card,” said O’Rourke.
The cash-back debit card is appealing to members, according to O’Rourke, who said members like the simplicity of the deal.
“It’s not like having one of those high-rate checking accounts where you have to use your debit card so many times a month, it can’t be for PIN, and you have to have other products,” she said. “That is confusing. Here, members swipe their card and get ten cents back. That’s all. The approach really has members swiping their debit card a lot—we gave back almost $12 million last year, while making a nice amount of money on debit ourselves.”
Randolph-Brooks heavily markets the checking account, using electronic media, newspapers, direct mail, billboard and cross sales.
Auto lending is streamlined, as well. In addition to offering a very competitive 1.65% rate up to five years for the best paper, the risk based pricing is the same for new and used vehicles.
“We don’t have a different rate for used, or for the year of the car, or for the model,” said O’Rourke, who noted that the credit union is averaging about $100 million a month in new consumers loans, with auto making up the majority of the portfolio.
The credit union does not do indirect lending, but allows members who are preapproved for a car loan to close the deal at the car store.
“We also have a vehicle buyer’s check, where a member is preapproved for a certain amount and we issue a check that is then taken to the dealership,” explained O’Rourke. “Then, you write the check to the dealership for the amount you need and we follow up later with the paperwork.”
Simplified Operations
CU member-facing operations have been simplified by centralizing lending and new accounts staff into one location at the credit union’s headquarters. Members access the support teams via video conferencing rooms set up at each branch.
“You walk into a branch and need to open a new account or take out a loan and you are not tied to how many employees are working that day or how many are available,” O’Rourke explained, noting that the CU opens about 20% of its new accounts online.
Taking a simpler approach to products and pricing makes staff training easier and employees more effective, said “O’Rourke. “It’s easier for the employee and for the member—we are more efficient and effective on both sides.”