The time was right for a change at First Citizens’ Federal Credit Union, its executives decided.
Yes, there’s uncertainty in the financial world, and consumers are hunkering down to ride out the recession. Yes, the credit union itself was forced to absorb a $3.1 million hit in the first quarter as part of an industrywide bailout of large “corporate” credit unions.
Nevertheless, in April, the Fairhaven-based First Citizens’ – which has branches in New Bedford and Taunton – moved forward with an overhaul of the institution’s logo and tagline, and other things, too.
The purpose: To broaden the credit union’s appeal to younger, upwardly mobile members.
That meant shedding what First Citizens’ executives termed the “old-fashion maroon” logo, changing to a more modern-looking sky blue with a new typeface. Another revision: The tag line has gone from the little-used “You belong here” to “Think First.”
“We asked ourselves: Does our look and feel really reflect our capabilities? No, it didn’t,” said Frank Almeida, vice president of retail and marketing. “If you’ve had the same look for 20 years, you probably need to do something else.”
First Citizens’ isn’t much different from most other credit unions across the country.
For years, there has been hand-wringing in the industry about the aging of its membership, how younger people have less of a connection to credit unions, which once were part of many people’s lives through their workplace.
According to industry data, the average age of a credit union member is over 47, older than what banking and credit union executives consider prime borrowing age.
And the average continues to climb, according to the Filene Research Institute, a Madison, Wis.-based think tank focusing on credit union issues.
In the last 10 years, the average age of credit union members nationwide has risen three years, says Filene spokesman Ben Rogers.
“It’s a real problem,” Rogers said.
But industry advocates say the recession and turbulence in the financial sector are creating a situation that could turn the tide.
A recent report by the Boston-based research firm Forrester claims that membership at the nation’s 8,000 credit unions grew 1.57 percent between December 2007 and December 2008 – the largest uptick in growth since 2003. There are now more than 90 million credit union members.
Credit unions, charged with acting in the best interest of their members rather than increasing profits for shareholders, largely avoided the subprime mortgage meltdown last year, which enhanced the perception that they act more conservatively.
In light of this, Keefe said, credit unions should be acting to enhance their image in the communities they serve. “If they have the capital to do so, it makes good sense to do it now,” Keefe said.
Almeida agrees.
With some consumers giving credit unions a look, the timing seemed right for First Citizens’ to act. “Safety and security seems to be a huge mantra we’re hearing [from potential members],” Almeida said.
At Pawtucket Credit Union (PCU) – Rhode Island’s largest credit union at $1.13 billion in assets – President Karl Kozak was caught off guard recently when he looked at his membership statistics.
From 2003 to 2009, people ages 25 to 44 dropped from 42 percent of PCU’s membership to 35 percent. At the same time, people 45 and older jumped from 50 percent of PCU’s membership to 58 percent.
While credit union executives like to have members in any age group, the 25 to 44 group is vital because those people are more likely to borrow to buy cars and houses.
“I can’t make any money unless I make loans,” said Kozak.
That’s why Pawtucket Credit Union has taken steps over the years, such as adding more ATM locations – the convenience younger consumers desire – and offering a debit card. “Younger people would not do business with us without debit cards,” Kozak said.
Still, it’s been an uphill climb for credit unions, which typically have fewer branches than even many community banks.
The marketplace for credit unions used to be different.
Many credit unions were established in workplaces, introducing employees of modest means to the credit union concept. Most of the company ties no longer exist. “That connection with younger generations is not as automatic,” said Rogers, from the Filene Research Institute.
While many employee-based credit unions have merged with others, some community-based credit unions, such as PCU and Navigant Credit Union, based in Smithfield, have thrived.
Navigant was founded in the basement of a Central Falls church in 1915 and did business for years as Credit Union Central Falls before undergoing a major facelift a few years ago.
The $1.09 billion credit union is now headquartered in state-of-the-art offices in Smithfield, and instituted a name change, along with a logo overhaul, in 2007.
“They wanted to be more accessible,” said Robert Kimmett, senior vice president at the Credit Union Association of Rhode Island.
At First Citizens’, rebranding wasn’t nearly as extensive.
The $466.56 million credit union, which has about 50,000 members, won’t say how much the change of logo and tagline cost. But so far, executives have done it as inexpensively as possible.
While the Web site features the new logo and tagline – “Think First” is a play on the credit union’s name as well as a reminder of the conservative nature of the 71-year-old institution – First Citizens’ is phasing in new office supplies as the old ones run out.
New exterior signs haven’t been installed, either.
While First Citizens’ already offers touches such as online banking and e-mail newsletters, Almeida said plans are in the works for more high-tech features such as the capability to send out alert notices to members’ cell phones.
“A lot of these efforts are focused on the next wave of people,” Almeida said. “But at the same time, we’re not becoming something else, either.” •
