Posted by Nathan Quade, Senior Account Executive, Catalyst Corporate FCU on 5/31/2018

For many college-bound students, the homework doesn’t stop when school is out of session. Students and parents are spending a lot of time and energy trying to find financial aid options to cover the growing cost of college. After all, a higher education now requires a higher price tag.

When seeking ways to cover this growing cost, it’s best to look first for scholarships and grants—money that doesn’t need to be repaid. Then, explore federal student loans. In most cases, however, these options don’t cover the full cost. To tackle the remaining balance, families can consider a private student loan.

According to a national study by Sallie Mae, the average American family paid more than $23,000 in 2017 in college expenses. Nearly a fifth of those expenses are covered by loans. Additionally, 84 percent of students receiving loans expect to be solely responsible for repayment – even if a parent or guardian initiated the loan.

Can a credit union help?
As credit unions, we try to meet members’ needs. And as student loans become a bigger part of what members need, credit unions recognize the imperative role they can play in that process.

Why should credit unions offer student loans?
Student loans allow a credit union to expand its product line and membership base simultaneously. Many students seeking loans are currently unaffiliated with a financial institution. A student loan gets them in the door to become a member. Student loans also benefit current members seeking out responsible financial aid options.

Imagine increasing your credit union’s product line and membership base without increasing the balance sheet risk. With loans like the Smart Option Student Loan, offered through a partnership between Catalyst Corporate and Sallie Mae, it’s possible.

Such an arrangement allows credit unions to provide referral-based student loans to members without taking the credit risk associated with private student loans. It also provides a great resource for members and fee income for credit unions, as credit unions receive a referral fee for each loan.

What can members expect?
Students who choose to take out a Smart Option Student Loan may receive funds applicable to any accredited U.S. institution; other loans may have limitations. Schools receive the approved funds directly from the lender, so borrowers don’t have to worry about disbursement dates and amounts. This particular type of loan has no origination fee, no prepayment penalty and offers a 0.25 percent interest rate reduction if the borrower enrolls in monthly automatic debit payments.

Do student loans only apply to undergraduates?
That depends. Some lenders have loans designed for graduate students, too. It’s just as important to look for responsible private loan options for:

  • Dental School

  • MBA Programs

  • Health Professions

  • Law School

  • Medical School

  • Graduate School

How can I learn more?
Now is the busiest time of the year for student loan requests. Take a few minutes and check out this free webinar explaining student loan options for credit unions.

College students are under enough pressure. Let them know your credit union is here to help!

 

Categories: Business Partners, Education & Training, Sales & Service, Strategic Planning & Consulting
Posted by Alison Barksdale, AVP of Mktg, CU Members Mortgage on 5/3/2018

Remember playing softball as a kid? You’d be in the outfield and end up kicking stones most of the game. Then, all of a sudden a ball would fly your way and you’d position yourself just right to catch it. As you stood there, you would tell yourself don’t drop the ball, don’t drop the ball, don’t drop the ball. Really, all you were hearing was “drop the ball” over and over in your head. Go figure you would end up dropping the ball.

Self-talk has a huge impact on the way we view ourselves and how we push ourselves to reach goals. It affects how we motivate ourselves to move forward and it can deter us just the same.

In the world of loan officers, it can help you talk yourself into making the call, or it can deter you from asking for business. You can justify why you aren’t prospecting more and create self-doubt which prevents you from taking the steps to grow your business. The reluctance created affects your service levels, reaching your goals and your overall success. So, how do you push past this reluctance that’s holding you back? Here are some easy steps towards focusing your mindset for success.

Change the Conversation

You can’t move past reluctance, if you don’t change your self-talk. It’s replacing your negative “don’t drop the ball” to something a bit more positive like “catch the ball” which encourages your actions to reflect your mindset. Imagine how many times you’ve told yourself not to do something, which is exactly what you ended up doing. By changing your inner conversation with the specific action you want to do, you will position your mindset with achievement.

Create a Plan of Action

By creating an action plan and holding yourself accountable you can push through your hesitation. Every Friday create a plan of action for the following week that includes specific actions you will take toward your goals. For a loan officer, it might be scheduling two appointments the following week or making two follow-up calls. Set your action or goal and complete it, and as you push past your aversion, grow your goals to include more. Put the actions on your calendar to help hold you accountable. Do whatever motivates you, to keep the plan of action.

Create a Script

If part of the reason you are reluctant to ask for business is a fear of being pushy or fear of the phone conversation itself, a script will help you think through what you want to say and help you be more confident in your message. This doesn’t have to be a cookie cutter approach to conversation. It is simply a foundation to keep you talking and push past any fear. Remember, you are a brand ambassador and you need to let others know who you are and what you have to offer them. Find confidence in your script by using positive language and phrases that get you excited about your brand.

Find a Way to Compete

Sometimes all you need is a little friendly competition to push yourself to where you want to go. It might be that you have a co-worker that struggles with the same obstacles you do and you can work together to push past them with a friendly competition. It might be a department that struggles with specific tasks or deadlines that you want to improve. It could be a specific self-improvement you want to make and setting a specific goal and deadline will help push you there. Competition can motivate you past any reluctance you have.

Reluctance and self-doubt impede your success more than you realize. They become a silent barrier that sneaks up on you and throws you off course. If you implement ways to push through these challenges, you’ll find it easier to reach your goals.

Categories: Business Partners, Marketing & Printing, Sales & Service
Posted by Mr. Jim Griffis, Regional Director, John M. Floyd & Associates on 5/1/2018

By Jim Griffis, Regional Director, John M. Floyd & Associates (JMFA)

There are myriad reasons why organizations fall behind when it comes to updating their products or improving existing services. Regulatory uncertainty, budgetary constraints, insufficient staffing, technology concerns, outdated business philosophies and a fear of the unknown are reasons I often hear from credit union leaders who aren’t satisfied with their existing performance. Yet often they are hesitant to revisit their overdraft program strategy to increase revenue and improve member service.

But maintaining the status quo in an increasingly competitive industry can have far-reaching consequences. And the results may not only negatively impact the credit union’s performance, but also prove detrimental to its workforce and the level of service provided to members.

For instance, while waiting for new regulatory input on overdraft strategies over the past several years, some institutions have allowed their program to become stagnant or have decided to forego implementing a compliant overdraft solution until a final ruling was announced. As a result, many existing programs are most likely outdated which creates increased risk for examiner scrutiny and sub-par results. Both of which can be perilous in regard to reputational and competitive capital.

Following are a few examples of the cost of complacency when it comes to your overdraft strategy:

1. Failure to meet members’ financial services needs

Let’s face it, if you aren’t offering an overdraft service, your members are going someplace else when they need funds – whether to your competition, a high interest rate short-term loan, a payday lender or something else. Not only is this diminishing your value as their financial institution of choice, someone else is benefitting financially from your members. 

A disclosed overdraft program offers consumers an option they can use in the event they need additional funds or make an error in their checkbook. If they don’t use it, they won’t ever be charged a fee. The important thing is, when they do need it, it’s there. And that is the kind of reassurance that many consumers value today.

2. Non-disclosed programs risk regulatory and legal exposure

The recent release of the Consumer Financial Protection Bureau’s five-year strategic planany new rulings a priority at this time, credit unions still need to be vigilant in regard to maintaining fully disclosed overdraft procedures.

During the past few years, there has been an uptick in activity related to consumer litigation against financial institutions for using unfair and deceptive practices, such as: 

  • failing to obtain affirmative opt-in consent from account holders before charging overdraft fees on ATM and electronic transactions;
  • utilizing misleading advertising practices that don’t disclose fees;
  • re-ordering transaction processing that results in maximizing overdraft charges; 
  • implementing sales incentives that encourage deceptive product marketing practices; and
  • failing to clearly disclose information relative to overdraft processing and procedures.

So, even though it appears that no new overdraft regulations are being considered at this time, failure to properly disclose information to members can lead to substantial risk.

3. Lack of proper training negatively impacts employee morale and program results

I am often surprised when I have the opportunity to chat with credit union employees about how they present their institution’s overdraft program to members during account openings. If they haven’t been properly trained on the value the program provides when a member is faced with a financial hardship, they are not prepared to explain the program accurately and confidently. Or, they may let personal biases against individual members cloud their willingness to offer the program at all. Such uncertainty can result in frustration for employees who want to provide good service. It can also lead to compliance violations for the credit union if all members are not treated consistently.

Following a recent client training session, I watched as employees walked out of the training room after having that “aha” moment. I could see on their faces that they had gained a new understanding of what an overdraft program means for a member who is dealing with unexpected medical expenses or the loss of employment. They realized the importance of offering products based on what is in the members’ best interest, not their own. They understood the importance of fully disclosing what the program is, how to use it appropriately and how much it costs – so members can decide whether or not it is right for their situation.

Taking advantage of ongoing, professional training opportunities helps to solidify important program aspects that staff members may lack from any previous understanding of how a compliant program works. And role-play opportunities help staff learn how to present the program effectively to members. 

4. Maintaining the status quo can lead to mediocrity

While you may think you are currently earning adequate fee income each month from an existing strategy to stay on your current course, what would an extra 25 to 50 percent in non-interest income each month mean for your credit union? Are there things on your wish list – such as updating technology, initiating facility improvements, hiring new personnel to help grow your loan portfolio or maintain more efficiency in your branches – that you have been putting off because of budgetary constraints? Are there mobile-based services that your members obtain elsewhere because you are stalling on updates or new implementations?

According to information from the Pew Charitable Trust,12 million Americans take out payday loans each year to cover their financial needs.How many of your members are using competitive resources when they have a shortfall in funds, instead of relying on your credit union to provide a full range of services? Think about the good you can do to better serve your members’ financial needs – while keeping your credit union competitive and top-of-mind in your market.

A commonsense approach to overdraft services reaps the most rewards

A professional overdraft service provider can take a look at your existing program or help you implement a new one. They will make sure the procedures are member-friendly, review your fees to make sure they are fair and advise you how to maintain effective communications policies that provide the information members need to use your program wisely. They can provide an estimate of your earning potential, guide you throughout the implementation process and provide on-going advice to keep your program on-goal. In either case, the resulting revenue stream generated by a well-maintained, fully disclosed overdraft program can support strategic improvements that will enhance member service and keep your credit union competitive for years to come. 

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ABOUT THE AUTHOR

Jim Griffis is a regional director for John M. Floyd & Associates (JMFA). He joined JMFA with more than 20 years of expertise in sales and marketing strategies, operations, project management and new product implementation. As a Regional Sales Director for JMFA, Jim works with community banks throughout the northeastern states to help them achieve their profitability goals. Learn more about Jim.

ABOUT JOHN M. FLOYD & ASSOCIATES (JMFA)

For the past 38 years, JMFA has been considered one of the most trusted names in the industry helping community banks and credit unions improve their performance and profitability. Whether it’s recovering lost revenue, uncovering savings opportunities, serving account holders better, finding the perfect personnel fit or delivering a 100% compliant courtesy pay program, JMFA has the right solutions to help you not only meet, but exceed, your goals. We are proud to be a preferred provider among many industry groups, including CUNA Strategic Services. To learn more, please contact Thomas Aleman, JMFA Regional Director,or visit www.JMFA.com.

Categories: Business Partners, Compliance, Education & Training
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