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Reinventing/Reenergizing Common Bond

Bob HallComment

Common bond has always been a key characteristic of credit unions. It defines who they are and who they may serve. In too many cases today, common bond is seen merely as a legalistic and regulatory barrier to growth. This is a mistake. Instead, credit unions should think about how common bond can be a growth strategy. 

Take a look at how NCUA defines common bonds. In the context of an associational common bond, NCUA says (among other things) that its members “share common goals and purposes.” For a community common bond there is a similar requirement, “individuals have common interests and/or interact.”

Common goals, common interests, interaction – these can be important concepts in reenergizing credit unions. They are things that also define relevance to the lives and hopes of their members and potential members.

We’ve seen the burst of activity following recent moves by banks to charge their customers monthly fees for using their debit cards. Aha, we say, here is an opportunity to market the credit union difference – “we don’t nickel and dime our members with excessive fees” or ”we offer lower rates on loans.” These are very good things, and as recent experience shows they offer reasons for people to take another look at joining or using a credit union. But are these the only ways credit unions want to attract members and to be relevant? What about identifying and being meaningful to common goals or common interests?

There are an endless number of things that people care about. Are there things your credit union can do to make a difference with some of these? Here’s one example. Many people care about the environment or energy security. How about aggressively marketing loans specifically for lowering energy consumption in homes and businesses? The average cost of “whole house” energy efficiency retrofits to a home is $8,000 - $10,000. Many credit union members’ have lost equity in their homes and may not be able, or want, to take out a home equity loan right now. But they would like to lower their monthly utility bill; they would like to end cold winter drafts; they would like to be able to make a small difference in lowering greenhouse gas emissions or improving the nation’s energy independence. You can offer these homeowners low rate, unsecured energy improvement loans. 

Banks aren’t interested in making that kind of loan. But a recent study by the Filene Research Institute, Finding Sustainable Profits: Green Lending in Credit Unions, finds that this is exactly what some credit unions are doing. What’s more, these loans are profitable, have no/low delinquencies, attract new members, and are sometimes offered in partnership with local businesses, utilities, or state and local governments.

In addition to finding new partners that can help market and in some cases subsidize, these kinds of loans, credit unions can tap into a broader community of people that would like to find ways to use their deposits to support things that are good for the environment. A credit union in Virginia created a special share certificate that was used to secure a local solar energy initiative. It found a lot of people were willing to make a long-term, low-interest deposit in the credit union to enable it to offer a secured loan for the project.

"This is a new type of common bond. Credit unions are becoming more relevant to their members and their communities by focusing on ways deposits can support things their members care about." 

This is a new type of common bond. Credit unions are becoming more relevant to their members and their communities by focusing on ways deposits can support things their members care about. These activities don’t have to be speculative or risky. These credit unions are not using exotic new products. They don’t have to go to NCUA to amend their fields of membership. They are finding safe and sound ways to use basic credit union products and services to tap into common goals and common interests shared by a number of their members, and that attract new members that share these goals and interests. And, did I mention that these loans are profitable?

It is hard to find a credit union conference today that doesn’t include some discussion of social media. One of the things we hear about social media is that it is used by younger people…the kind of demographic that is increasingly needed for the long-term financial integrity of credit unions across the country. But what do you do with your Twitter account? Tell people that you don’t rip them off with debit card fees?

There is nothing wrong with that; but how about telling them how deposits in the credit union are being used to accomplish something bigger that they care about – rather than just avoiding a $5/month nuisance fee? What if you told people how you use money that they have on deposit to cut greenhouse gas emissions in their community. What if you told them that their deposits are helping area homeowners install solar panels? What if you told them about your special loan program for fuel efficiency vehicles? In short, what if you told them how you are part of something they care about and their savings account can be part of something they care about?

Many people care about these things, but they don’t know what they can do to make a difference. Tap into this; help advance their common goals and common interests – their common bond. Give them something they can do – join the credit union that shares their values. Almost everyone has a savings or checking account; show them how that money can be put to use accomplishing something they care about. Most people have to put fuel in their vehicle or heat their home; show them how you are working to help them save money in ways that are relevant to something bigger and something they care about.

Common bonds don’t have to be a curious legal requirement for credit unions; they can help your credit union define your relevance and significance to your members. You don’t have to compete simply on prices and fees; you can compete by doing something people care about. Identify new common bonds and make them real.


The author of the Filene Research Institute’s recent study, Finding Sustainable Profits: Green Lending in Credit Unions, W. Robert Hall is a longtime credit union expert with extensive experience in credit union law, regulation, and business operations. As president of Hall Associates Consulting, LLC, ( he works with the credit union community to take innovative ideas and translate them into effective business solutions. Hall successfully chartered the first Internet- based credit union (REALTORS FCU) and is the organizer of a new credit union, Green Energy FCU. He advises credit unions on topics including FOM expansions, developing new products and services, accessing the secondary mortgage market, and managing effective advocacy campaigns.