Credit unions often carry the name of a business or a labor union. But the fastest-growing type of credit union carries the name of a community.
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The National Credit Union Foundation has chartered a new financial institution on Chicago’s Southeast Side: the South Side Community Federal Credit Union.
A few miles away, the North Side Community Federal Credit Union is moving into a new building to meet increased demand.
Congress loosened restrictions on community-affiliated credit unions in 1998, and since then their popularity has soared, said Deborah Matz, a board member with the National Credit Union Administration.
They account for about 17 percent of all credit unions, up from less than 4 percent in 1998, she said.
Credit unions affiliated with businesses or unions require that members work at the business or be a member of that group. Community credit unions have their own restrictions: Members have to live, work, volunteer or worship in the area the credit union serves.
North Side was founded 29 years ago, but demand for its services has taken off in recent years, said Chief Executive Ed Jacob. It has grown from about $4.8 million in assets in 2002 to about $8.3 million.
“We’re not in an underbanked area, we’re in Uptown,” he said.
Still, many of his customers are people who haven’t used traditional banks and instead might turn to higher cost payday loan centers or currency exchanges if the credit union wasn’t there, Jacob said. North Side has 3,300 members, and half have less than $100 in their account.
The credit union serves the Lakeview, Uptown, Edgewater and Rogers Park neighborhoods
While there is still competition with banks, there is also cooperation.
Bank One Corp., for example, has invested $100,000 with the credit union at just 2 percent interest for 10 years. The money helps North Side’s bottom line and helps Bank One meet its federal mandates to help low-income people get housing loans.
Harris Bank has provided North Side with a teller machine that doesn’t add a surcharge for customers of either the credit union or Harris. And Northern Trust has provided a grant to cover losses in a program that offers quick loans of less than $500.
Matz will be in Chicago to congratulate North Side on its move to a new home at an open house on Wednesday. It will be from 4 to 6:30 p.m. at 1011 W. Lawrence Ave.
Banks boost marketing: Get ready to see more of an effort by banks to target their pitches at different ethnic groups. The American Bankers Association surveyed its members and found they plan to increase marketing budgets by 7 percent next year in an effort to boost “multicultural marketing.”
Hispanics, African-Americans and Asians are all groups banks are tailoring their message to in an effort bring in new business, the ABA found.
Harris opens branches: Aggressive branch expansion continues, this time in the western suburbs. This month Harris Bank opens four new offices: two in Aurora and one each in Naperville and South Elgin. The latest additions bring Harris up to 151 branches locally, with plans for an additional 50 in the next three to five years.
Big-time barbecue: Washington Mutual has only been a retail banker in Chicago for a few months, but the Seattle-based bank has proven itself to be an aggressive marketer. The bank’s next effort may be one for the record books.
It is planning to throw the world’s biggest barbecue and land itself a mention in the Guinness World Records book. The event is planned for Oct. 18 in Grant Park, and tickets are available at Washington Mutual branches.
The event is part of what Washington Mutual is calling “Teacherpalooza,” an effort to honor the area’s educators. A concert featuring Tim McGraw and Michelle Branch will be part of the festivities.
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