By Ray Birch
RACINE, Wis.—Over the last 10 years Educators Credit Union reports it has saved members more than $202 million in loan interest through its “Lending a Hand” program, and in the process also created more than 25,000 ambassadors for ECU.
The $1.95-billion credit union has been growing at 10% for several years, and CEO Linda Hoover said that 75% of the new additions arrive through referrals from “Lending a Hand” borrowers. In 2017, ECU helped 4,700 members save more than $35 million.
“This program generates fantastic word-of-mouth advertising for the credit union,” said Hoover. “It’s a great program for our members, because we are saving them a lot of money, and it’s a great program for the credit union because we’re growing thanks to it.”
Lending a Hand encourages members to visit Educators Credit Union to see where they can save on interest for loans from other lenders. Educators Credit Union employees pull a members’ credit report and then review outstanding loans to see if the member could get a better rate by refinancing. Members can also earn $25 for themselves and a friend if they refer someone else to refinance.
Referrals, Referrals, Referrals
While the credit union advertises, it does not take much to encourage members to refer others to ECU, said Hoover.
“They love the Lending a Hand program and they talk a lot about it,” said Hoover. “After we save them money and they have their new loan we simply ask them to tell a friend, colleague or family member about us.”
Hoover told the story about how one member recently came to ECU for a reason other than to refinance, but ended up through Lending a Hand saving $60,000 in interest over the life of the loans she refinanced.
Linda Hoover
“Certainly, we talk a lot about Lending a Hand over social media and share testimonials,” said Hoover. “Outside of referrals, social media and the testimonials on our Facebook page and credit union site have the biggest effect.”
Marketing SVP Shannon Hout told CUToday.info that ECU had no idea Lending a Hand would become this big and this successful.
“It started 10 years ago just as a simple way to help members save money and address the recession,” said Hout. “We focused first on car loans, trying to find innovative ways to help our membership and bring over car loans during the recession. It was successful right off the bat. The first year’s goal was to save members $1 million in auto loan interest, and we reached that goal in well under 12 months.”
Due to the strong interest, along with members telling the credit union how much they appreciated the program, ECU then opened up Lending a Hand to all credit union loans.
Program Growth
The program has grown over the last 10 years, from saving members $3 million in 2008 to $37 million in 2012, $36 million in 2016 and more than $35 million last year. Lending a Hand has saved more than 25,000 borrowers $202,151 million in interest in that time, according to ECU’s calculations.
“Our Goal in 2018 is to help 6,000 members save $40 million,” said Hoover.
Hoover said the most common loan refinanced is auto, but the biggest savings, of course, come from first mortgage refinances. She said members also refinance a significant number of credit card balances.
ECU’s rates are very competitive—auto loans are as low as 2.45% APR, credit cards at 8.9% fixed, and a five-year ARM is 3.5%.
The members who are saving the most are lower-score borrowers who have extremely high rates from banks, Hoover said.
“We have seen some C and D borrowers come to us with auto loans as high as 28%,” said Hoover “We can save them a lot. If members have paid us on time in the past and are in good standing, we will help them out and give them a good rate that can’t get anywhere else. In these cases, we place less emphasis on the FICO score and more on the members we know.”
Same Concept
Hout said the concept behind the success of Lending a Hand’s has remained the same over the years, and is based on an educated staff looking for way to save members money.
“We have conversations with our members, and sometimes we find we can’t save them money and we tell them that,” Hout said. “We tell them they already have a good deal, and they appreciate that. They know that what Educators Credit Union is trying to do is improve their financial lives. So if they get a new loan or not, that makes for some great ambassadors for the credit union.”