Coordinator & Sales Assistant Training Module 1: Credit Union and CUNA Mutual Group History

Transcription

1 Coordinator & Sales Assistant Training Module 1: Credit Union and CUNA Mutual Group History The Coordinator and Sales Assistant Training Module 1 is a written module, Credit Union and CUNA Mutual Group History. This module will provide you a general background of the credit union environment and the history of CUNA Mutual Group. This module also includes a few standard exercises to help you become more familiar with your specific credit union. The completion of these activities will help you build relationships with the credit union personnel as well as identify additional marketing opportunities. This section includes the following documentation: Credit Unions and CUNA Mutual Group Sample Credit Union Organizational Chart Know Your Credit Union Exercise CU and/or SEG Benefits Exercise Credit Union Website Review Exercise FR E CUNA Mutual Group

2 A Brief History of the Credit Union A federal credit union is a nonprofit, cooperative financial institution owned and run by its members. Organized to serve, democratically controlled credit unions provide their members with a safe place to save and borrow at reasonable rates. Members pool their funds to make loans to one another. The volunteer board that runs each credit union is elected by the members. Not for profit, not for charity, but for service is a credit union motto. The first credit union was created in 1849 in Germany when farmers pooled their money together to escape the hold of local moneylenders. Farmers could gain membership if their neighbors judged them to be "industrious, friendly and of good character". These early credit unions created the building blocks (such as "one member, one vote", and volunteer involvement) which still exist today. The first U.S. credit union opened its doors in One of the first leaders was Edward A. Filene, a prominent Boston department store owner. He was revered by his workers because he was an innovative, caring employer, introducing many polices rare in his day such as paid holidays, employee lounges, free medical care and employee participation in personnel policies. Filene was instrumental in setting the principles to guide the credit union movement. Filene hired the man who started the credit union boom in America, Roy Brenegen. Brenegen was initially a lawyer who represented many poor clients. He saw what could happen when people did not have any financial institutions looking out for them. Brenegen enthusiastically traveled all around the country promoting credit unions and by 1930 had helped bring the total number of credit unions to 1,100. The credit union movement hasn't looked back since. Ironically, the first credit union in the U.S. was called St. Mary's Bank because "credit union" was not yet in the American vocabulary. Chartered by a special act of the New Hampshire legislature, it served the parishioners of St. Mary's Church in Manchester. Today the credit union still serves the community's residents and efforts are underway to create a museum at the original credit union site. The museum will chronicle the progress all credit unions - including ours - have made in improving the financial well being of millions of Americans. The simple, yet powerful, idea that ordinary people could pool their assets, make loans to each other, and learn how best to manage their money has stood the test of time. In fact, today, over 13,000 credit unions in the U.S. serve over 75 million Americans! That is nearly 1 out of every three adults in our country. Plus, an amazing 200,000 members believe so strongly in the credit union concept that they volunteer their time on credit union boards and committees helping prove the credit union motto that "members make the difference." Credit Union Philosophy At the foundation of the credit union concept, credit unions are literally owned by their members. Everyone who saves or borrows (no matter how much or how little) at a credit union is an owner entitled to a voice in how the credit union operates. They do this by being able to run for the board of directors or other committees. And every person has an equal vote no 2

3 matter how much or how little they have in the credit union. Contrast this to banks which are owned by investors who do not necessarily save or borrow at the bank or even live anywhere near the bank or its branches. With that in mind, who do you think will look out for your best interests? As member-owned and democratically controlled cooperatives, credit unions are committed to service. Credit unions all over the world are governed by a volunteer board of directors, who represent the interests of members, not those of anonymous shareholders. As not-for-profit organizations, credit unions return any extra income to members in the form of lower rates on loans, higher rates on savings or improved services. And credit unions strive to educate their members about wise money management and practice social responsibility within their communities. CUNA Mutual is a sure fit with credit unions. Based on the same philosophy, CUNA Mutual is a mutual company owned therefore by policyholders. CUNA Mutual does some sort of business with 98% of all credit union members. A Brief History of CUNA Mutual Group and Affiliates In the early 1930s, after the death of a credit union member left a $ debt that had to be paid by two co-signers, the Credit Union National Association realized the need for an insurance company that served credit unions and their members exclusively. This led to the formation of CUNA Mutual Insurance Society which was incorporated on May 10, 1935 in Madison, Wisconsin. Initially, CUNA Mutual sold only individual credit life insurance policies issued to and paid for by individual credit union members. In 1936, deciding that making individual borrowers pay for their own coverage was contrary to the credit union philosophy of equal service for all members, CUNA Mutual introduced the first group credit life insurance called Loan Protection insurance. The credit union paid the entire premium for this coverage, providing free coverage to all its borrowers. Later that year, CUNA Mutual initiated Total & Permanent Disability coverage under its Loan Protection policy. In 1938, after having helped the credit union borrower, CUNA Mutual turned its attention to the credit union saver and introduced its Life Savings insurance program. This was an innovative group life insurance plan designed to encourage members to save money by insuring the amount of their savings. This program was also paid for by the credit union and available to all members with share saving accounts. CUNA Mutual continued to grow and expand the products and services offered to credit unions and their members worldwide. In 1983, CUNA Mutual Financial Services Corporation started to make insurance and financial planning services available to credit unions and the Member Direct Marketing program was started. The PLAN AMERICA franchise system (which is now the MEMBERS Financial Services Program) was introduced in 1986, using the credit union as a distribution point for individual life and health products. This program was revamped as a result of the affiliation between CUNA Mutual Group and CUNA Mutual Life Insurance Company (formerly Century Companies of America) in Today, CUNA Mutual Group has 5,000 full-time employees and offers more than 200 products and services. 3

4 CUNA Mutual Life Insurance Company In 1879, after the death of a fellow pastor left his family nearly destitute, the Iowa Synod of the Lutheran Church realized that this could happen to any of them and decided to form an association which would permit them to do collectively what they could not do alone. This was the beginning of the Mutual Aid Society of the Evangelical Lutheran Synod of Iowa and Other States. The Society served only Lutheran men and offered $ whole life policies, funded by assessing the members a fee after the death of a member. In 1922, the Society, realizing that the advancing age of its long-time members inevitably would render the assessment basis unworkable, decided to reorganize and a new operating basis began under the name Lutheran Mutual Aid Society. An agency system was established and all certificates were issued on a legal reserve basis with level premiums and reserves. In 1937, the decision was made to mutualize and the entity took on a new name, Lutheran Mutual Life Insurance Company. The operation of the company revolved around members of the Lutheran Church until 1970 when a bylaw change made anyone meeting underwriting requirements eligible to apply for a policy. As the company grew and evolved over the years, subsidiary companies were added to offer more diversified financial products and services. In 1984, Lutheran Mutual Life and its subsidiaries combined under a new name, Century Companies of America. On January 1, 1997, Century Companies of America took on a new name CUNA Mutual Life Insurance Company. In 2008, CUNA Mutual Life Insurance Company merged into CUNA Mutual Insurance Society. The Affiliation In November 1986, CUNA Mutual s CEO Dick Heins and CUNA Mutual Life Insurance Company CEO Irving Burling met at a conference at Harvard Business School. Both CEOs knew their companies needed to make some changes in order to survive and expand. During a conversation, they discovered that CUNA Mutual had a market (credit unions members) for individual life and health products but needed quality products and an experienced marketing staff to sell them. CUNA Mutual Life Insurance Company (then Century Companies) had the products and the staff but needed to find a sponsored market in order to reduce the costs associated with the time and energy spent by agents looking for prospects. Since each company seemed to have what the other needed to grow, the two CEOs began discussing how they could work together. They came up with the idea of a permanent affiliation. Neither company would lose its identity and no money would be exchanged but, through the affiliation, the two organizations would combine their resources to better service individual credit union members. In 1987, the two companies entered into a joint venture agreement to develop and test a new type of distribution system that was patterned after CUNA Mutual s first MEMBERS Financial Services Program. This system was designed to market individual life insurance products and financial services in the credit union marketplace. CUNA Mutual had access to the marketplace while CUNA Mutual Life Insurance Company possessed a strong portfolio of competitive products and marketing staff. 4

5 In 1990 a permanent affiliation agreement between the two companies was signed. The arrangement permitted the companies to share resources and required the sharing of financial results without merging. This was done in part by integrating certain operations functions into single units, which simultaneously serve both companies with a common staff. The CUNA Mutual Group Board of Directors was expanded from 15 to 20, with the additional 5 seats filled by CUNA Mutual Life Insurance Company officials. In February 1995, the CUNA Mutual Group and Affiliates Board of Directors appointed Mike Kitchen as President and CEO of both CUNA Mutual and CUNA Mutual Life Insurance Company effective March 1, In May 1995, Mike Kitchen introduced the following Mission and Vision statements for the affiliated companies at an open forum meeting. Mission: Dedicated to the financial well-being of credit unions and their members by providing valued insurance and related financial services. Vision: Recognized as the premier provider of quality financial services to credit unions and their members; respected as a trusted partner of credit unions; admired for our financial performance; acknowledged as a best cost producer; and valued for our high ethical standards. In 2004, Mike Kitchen retired and Jeff Holley became the acting President and CEO of CUNA Mutual Group until the following year. Then, in January 2005, Jeff Post officially accepted the CEO and Presidential position and he continues to successfully lead our company today. 5

6 Sample Credit Union Organizational Chart To understand who the key players are within your credit union, it will be helpful to make or obtain an organization chart. Credit Unions are organized differently, but below is a sample org chart. If your credit union has a similar structure, fill in the names of the individuals in these positions. If it is not similar, obtain a copy of their org chart and file it in your orientation manual or make your own and file it here. Members Supervisory Committee Board of Directors Credit Committee CEO Branch Manager HR Manager Mktg/Progra m Manager Info Sys Manager Financial Controller Credit Manager Operation Manager Business Development Marketing Loan Officers Collections Officer Network Administrator Accountant Member Reps 6

7 Complete Know Your Credit Union Knowing your credit union is the key to being a successful Coordinator or Sales Assistant. The following fact finder will allow you to learn more about the credit union you will be working with and the associates that are employed there. Make sure that you fully research each question and answer in its entirety. 1. Assets under management? 2. Number of CU employees? 3. Hours of operation? 4. Do they have an Employee Handbook? If so, obtain one. 5. Loan to debt ratio? 6. Number of CU members? 7. Does the CU have a dress code? 8. How many branch offices does the CU have? 9. Where are the branches located? 10. Who are the branch managers? 11. Who in the CU is responsible for SEG /business development? 12. Is the CU actively seeking new SEGs? 13. How many SEGs does the CU have? 7

8 14. Names of top 10 to 20 SEGs and contact person there? 15. What is your credit union s charter? 16. Does the CU grant mortgage/home equity loans? 17. Does the CU have a newsletter? 18. If so, how frequently is it published? 19. Who is the contact person for submitting an article? 20. Can the CU phone system accommodate an on hold message? 21. Is the CU willing to include stuffers in monthly statement mailings? 22. If so, how many statements are mailed each month? 23. Does the CU have space on-site to conduct a seminar? 24. What is the history of the CU? 25. Is the CU willing to provide ongoing lists of maturing CD s, new members, loan approvals? 26. If yes, how do they feel about letters and calls to these people from the MEMFS Rep? 27. Who is the key person for these lists in each area? 28. Is the CU willing to include stuffers in CD maturity notices offering optional investments? 8

9 29. If there was a former rep in the CU, what does credit union management think s/he did well? 30. Who are the Member Service Officers or Reps and who are their managers? 31. Who are the loan officers and who are their managers? 9

10 Review SEG Benefit Booklets/401k Plan Documents There are many mutual benefits to working closely with both the credit union and the major companies that are associated with and support the credit union (SEGs) in providing education and assistance to their employees. It is essential to build excellent relationships and be trusted by key individuals (management, HR staff, union leaders, etc.). Focus solely on what value you can bring to the credit union and companies in providing benefits to their employees and you will be rewarded later because of your reputation as an honest and trustworthy advisor looking out for the best interests of the employees. There are two main areas to concentrate on here, the credit union where you work and the SEGs. You may want to begin by researching the answers to the following questions: Credit Union: Who are the key CU staff members that work with the employee benefit package? Meet with them to ask what you could do to bring value to the employees. Some possibilities may include educational financial seminars (lunchtime?), information about retirement planning and investment options at staff meetings, assisting at new employee orientation sessions to explain the benefits of 401k and other parts of the benefit package, individual consultations about benefits selections and 401k investment allocations, etc. Be sure to stress that any information discussed would be kept in strict confidentiality. Will they give you a copy of the credit union benefits package? You should become an expert at what the credit union offers so you can help promote the plans to the staff and offer advice if asked. Does the credit union offer CUNA Mutual Group products as a part of their benefits package? SEGs Is there a credit union staff member who is responsible for relationships with SEGs? Are they willing to introduce you to key SEG staff and explain your position? Are there others associated with the credit union (such as board members) who have specific roles of importance at a SEG? Are there existing member/clients (if you have a book of business that you are taking over) that have influential positions at a SEG? (work in HR, union leader, management position, etc.) What value can you as a Sales Assistant/Coordinator located at the credit union add to the lives of the SEGs employees? Examples may include assistance to your Rep with education seminars, new employee orientation (coordination of personal and group benefits), preretirement consultations and planning, etc. 10

11 Credit Union Web site Review Get familiar with your Credit Union s website by answering the following questions: Where are the branch locations of your credit union? Find how to get to Members Financial Network (if your CU participates) to see how the market is performing. What is the current rate on a share savings accounts and CDs? Where on the website can you find out more information on all the credit union products and services available to a member? What are the requirements to become a member with your credit union? Can you apply for a loan online? If so, how? 11

12 Key Persons in Your Credit Union There are a number of people within your credit union that you will want to get to know. You ll want to establish a relationship with them and find out more about their job responsibilities. Who are these people? If you are unsure, work with your Program Manager, DM or Rep for direction or clarification. Name Position Phone Number/Ext Branch 12 FR E CUNA Mutual Group