TARBORO, N.C. (6/16/08)--One of the biggest challenges Telco CU, Tarboro, N.C. faces in regard to membership growth is space. Telco CU grew its membership 19% from 2006 to 2007--to 10,929 members by focusing on select employee groups (SEGs). While the growth is welcomed, the more members Telco brings, the more space and back office support it must retain.
“At first, when we grew our membership, they were coming in so fast it was hard to keep up. So the challenge is having enough space,” Telco CEO Charles Johnson told News Now
. Telco recently added a new location--a combination call center and branch. It was built with the intention of freeing up space in Telco’s main branch and is used by members for basic transactions. “We were bulging at the seams at the main location,” Johnson said. This is the fourth installment of News Now's
Membership Growth weekly interviews with fast credit union growers. The series is as part of an initiative of the Credit Union National Association (CUNA) Membership Growth Task Force. It 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. With Telco focusing its membership growth strategy on SEGs, Johnson, who started his post as CEO in March 2005, made a point to talk with all local businesses within Edgecomb County about sponsorship. As a result, the credit union went from about 25 SEGs to 100, he said. The SEGs vary in sizes. “We have large plants and small businesses,” he said. Telco is looking to target SEGs in three nearby counties in the future. Johnson conducted a study of the other counties to see what opportunities are available, and the credit union will begin pursuing relationships with those businesses. Population-wise, the counties are bigger, but geographically they are about the same as Edgecomb, he said. Within the SEG growth is a second challenge--serving a diverse group of people. Some credit unions have single sponsors, so they can specialize in one group’s needs, Johnson said. But with a diverse membership base, “you have to be alert to different needs of people,” he said. “It keeps you on your toes to make sure you’re serving all of the people you need to.” Telco offers a standard package of savings, checking and loan services and a credit builder program for those with weak credit history. The credit building program has four steps and members can start at any step as determined by the credit union. In the program’s first level, a member can take out a $500 loan. The member “walks out with $250 in his or her pocket, and retains the other half in savings,” Johnson said. The loan has a sixth-month repayment period. “It’s not so far out that they lose on interest,” he said. After they pay off the loan, they receive the other $250. They can withdraw that amount, or keep it in savings. After passing Level 1, the members can start Level 2, and follow the same process with a $1,000 loan. Level 3 offers a $1,500 loan and Level 4 offers a $2,000 loan. The credit union went to a risk-based lending program because members with low credit sometimes wanted up to $5,000. “It they stick to the program, they’ll get that amount. It’s just staggered in increments,” Johnson said. While completing the levels, the member has a four-year relationship with Telco. “We’ll then consider them for the standard loan package,” he said. Anyone who wants to contact the CUNA Membership Growth Task Force can e-mail the account established for this purpose at firstname.lastname@example.org