Credit unions decline in number, but not in presence

The number of credit unions in Colorado has steadily decreased the past 15 years but their presence and people’s awareness of them continues to grow in Northern Colorado and along the Front Range.

“There’s certainly been branch growth and things like that,” said Scott Earl, president and CEO of the Mountain West Credit Union Association, a trade association that serves 125 credit unions in Colorado, Arizona and Wyoming. “I think the bottom line for us is consumers are discovering credit unions more and more. We believe they are the best choice for almost all consumers. They have higher savings rates, lower loan rates and fees because of the member-owner structure we have. And we are not-for-profit.”

Most credit unions were formed around employer groups such as the Bell Telephone Co. or Public Service, the local electric company, years ago. It wasn’t until the 1980s that regulators started allowing for multiple fields of membership so that a credit union formed to serve the steel industry, for example, could also take in employees of a local manufacturing company, Earl said. They became more community-based.

Now, Colorado has credit unions that serve multiple counties so people are noticing more credit union branches popping up in their cities and towns.

Blue Federal Credit Union has eight locations in Northern Colorado and recently announced it is opening a branch in Lafayette. In October, the organization was approved for expansion into six Colorado counties, said Patti Hazlett, director of corporate communications for the Mountain West Credit Union Association. Elevations Credit Union, which is based in Boulder, announced it is opening three new branches, including a multi-story structure in downtown Fort Collins, where it already has two other branches.

“What you’re seeing is a lot of our statewide credit unions seeing that market is a good place to put a branch and serve the members who are there,” she said.

Earl agreed, saying that credit unions “usually will move into an area where they have got a good chunk of members.”

The state has 81 credit unions in the state with 1.93 million members and $25.2 billion in assets.

According to Mountain West Credit Union Association, credit unions in Colorado have seen a 6.1 percent increase in members and a 6.5 percent increase in assets over 2017. Many are expanding their branch networks into areas that hold a large cluster of their membership. A large part of that increase in membership is coming from the younger generations.

“I think that one of the significant challenges we’ve talked about as an industry for a long time is that we are the best kept secret,” said Tansley Stearns, chief people and strategy officer for Canvas Credit Union, formerly Public Service Credit Union. “We, as an industry, I don’t think we’ve done a good job of telling our story. It is a pretty humble group of organizations.”

In the past, credit unions were content to serve the populations they were founded to serve. That didn’t entail a lot of marketing.

As the industry has gotten more complex and credit unions have grown to serve wider audiences, they now aren’t just competing with the credit union industry but banks, Amazon, Apple and more.

That’s a major reason why Public Service Credit Union decided to rebrand as Canvas Credit Union. It wanted to reflect its transition to a community-chartered credit union.

“We are looking for ways we can tell our story,” said Stearns. “One of the ways we can tell that story better and attract a younger demographic was through a partnership with Colorado State University.” Canvas recently purchased naming rights to the new Colorado State University stadium, but instead of just slapping their logo on the facility, the credit union wanted it to be a true partnership with the university. In 2019, the credit union will open a branch on the CSU campus.

Currently, Canvas has 26 branches in Colorado. It plans to open more in 2019 and beyond.

The average credit union member is north of 47 years old, Stearns said, but millennials and Gen Z “are interested in doing business with organizations that do right by the world.”

And even though these younger generations are very technologically savvy, they are still interested in seeking support and guidance about different products and services, like their first checking account, from a physical, bricks and mortar location.

“I think that coming out of the Great Recession, consumers were hungry to find a financial institution they could trust and rely upon,” said Stearns.

Candice Aragon, vice president of marketing for Bellco Credit Union, said her organization is also looking closely at Northern Colorado because of the population growth in the area.

“Millennials are so attracted to this area. They have different expectations of the businesses they are going to partner with,” said Aragon. “They are the most philanthropic of any generation yet.”

Aragon said that people across the financial industry are saying that branches are dead because people are moving to digital but “our branch transactions are still high and profitable.”

Bellco opened a branch in Louisville in 2016 and one in Longmont in 2017. It is also exploring locations in Weld County.

She said that after the Great Recession, many smaller credit unions had a hard time surviving.

“What is nice for Bellco is that we are a pretty large credit union. We have the resources to deal with those challenges. We are also getting savvier with our marketing and knowing how to attract members. We don’t have to be something we’re not but get better at telling the story about what makes us so special,” she added.

Elevations Credit Union said that its members really like interacting with the organization through its digital options and call center but they “also want a local presence and branch networking environment,” said Gerry Agnes, president and CEO of Elevations Credit Union. The branch with the highest transactions by teller hour is located on the University of Colorado Boulder campus, which is geared toward serving students.

Elevations started as a single employer credit union serving the University of Colorado. It transformed to a community-chartered organization in 2003.

“Since that time, we’ve grown considerably. Most of that growth has happened in the past decade,” Agnes said.

Elevations has 14 branches along the Front Range, including locations in Westminster, Louisville, Lafayette, Boulder, Longmont, Loveland and Fort Collins. It recently opened two locations in Fort Collins and is in the development phase of a third, which it hopes to build next year. It also has a loan production office in Windsor.

Agnes said that many prospective customers find Elevations because of its residential mortgage lending rates. It is the number one mortgage lender in Boulder County, Agnes said, “which is no easy feat when you look at number one and two, which are Wells [Fargo} and Chase, respectively, and we are beating them 3 to 1 in Boulder County.”

Elevations also developed a small business banking platform this past year to do commercial real estate lending.

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