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Membership Growth Series Generations FCU
SAN ANTONIO (8/11/08)--Participation in the Volunteer Income Tax Assistance (VITA) program and increased emphasis on print and broadcast advertising over the past several years has led to solid membership growth for Generations CU, a $316 million asset, San Antonio-based credit union. The credit union realized 7% membership growth from 2006 to 2007. Anyone who lives, works, attends school, worships or volunteers in Bexar County, Texas, is eligible for membership. This is the seventh installment of the News Now Membership Growth series of interviews with fast-growing-membership credit unions. The series is part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. The series focuses on fast "organic" membership growth, not growth by merger or indirect loans. The task force, chaired by Dick Ensweiler, president of the Texas Credit Union League, was convened at the request of CUNA's Immediate Past Board Chair Allan Kemp McMorris. Its purpose is to investigate, report on, and encourage credit unions to embrace opportunities, techniques and processes that will increase credit unions' membership retention and growth. “One of the primary growth engines for our credit union has been the VITA program,” Eve Hernandez, Generations vice president of marketing, told News Now. “Not only has it brought in new members, but it also has been part of the commitment from our board to serve the underserved. So it fulfills our growth strategy and serves low- and moderate-income members.” In 2004, Generations significantly stepped up print and broadcast advertising efforts. In 2005, the credit union began to see a return on the investment--not only from advertising but also from the VITA program, Hernandez said. Earlier this year, the credit union changed its name from San Antonio City Employees FCU to Generations FCU. “Those three things [VITA program, advertising, name change] improved recognition, and awareness of our credit union helped our membership growth,” Hernandez explained. Generations specifically targets the 18-34 age group, Hispanics, immigrants and African Americans. Hispanics are a majority population in San Antonio, Hernandez noted. While Generations sees that other financial institutions target 18-34 year olds because they are less educated on financial products and services, the credit union targets this group to provide products that are more easily understandable. Two such products are: the Alternative Refund Anticipation Loan sponsored by the Internal Revenue Service (IRS) through the VITA program, and the Second Chance Checking Program. With the Alternative Refund Anticipation Loan, the credit funds a 0% annual percentage loan once it gets IRS confirmation of the member’s tax refund. The Second Chance Checking Program is geared toward members who have had past financial difficulties. There are several parameters affixed to the program, Hernandez said, including: Participants are limited to 10-15 checks per member, they can incur no non-sufficient funds fees, they must attend financial literacy classes and they must pay off any balances that they owe merchants. “Once members are successful with the second chance program, they can migrate to a traditional checking program,” Hernandez explained. Generations targets 18-34 year olds because it is the credit union’s mission, Hernandez said. “We can make a real difference for them,” she added. “We see a lot of young families and we see a lot of individuals using non-traditional financial services, so their income is chipped away by high-interest loans, money orders and check-cashing places. “By providing traditional financial services to help them, we’re turning that relationship into a more long-term and beneficial one. A lot of the parents of these members always used cash, so they don’t understand direct deposit, and different financial products and services offered,” she said. An example of a product that helps this younger group is an alternative to payday loans that charges an 18% interest rate, and is a more traditional, humane loan, Hernandez said. Generations became a community credit union in 2006, serving residents of Bexar County after starting out as a credit union for municipal employees in 1940. Hernandez explained the reasoning behind the charter change. “We found that the credit union was very successful having its roots as a good community service for city employees,” Hernandez said. “Our board of directors is really dedicated to providing public service--bringing down interest rates on loans, as well as debt consolidation and interest-rate relief. We looked for ways to extend our positive influence on the community.” Between 2001 and 2006, before the switch to a community charter, the credit union was part of a National Credit Union Administration program called Investment Area. Under the guidelines of the program, the credit union could serve census tracts--based on income level--within three-and-a-half miles of each credit union branch for members who earned 80% or less of the median income in the area. “That program was so confusing and cumbersome to manage,” Hernandez said. “That’s one of reasons we switched to community charter, so we could more easily serve the underserved in our area.” For credit unions, there always has to be a balance between getting new members and deepening that relationship with new members, Hernandez said. “While membership growth is good, we want to build relationships with members early on and retain them for as long as possible,” Hernandez explained. “To serve the underserved, you need a board commitment to do that. You have to take some risk on the loan side. My hat is off to our board for doing that. That comes from our VITA and Second Chance Checking programs.” Anyone who wants to contact the CUNA Membership Growth Task Force can e-mail the account established for this purpose at


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