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Nicole HaverlySenior Portfolio Manager Affinity Plus Federal Credit Union ($1,839M) Saint Paul, Minnesota
"A penny saved is a penny earned:" Savings Accelerator Program
2016 CUES NTCUE Competition
Nicole Haverly - Senior Portfolio Manager October 24, 2016
• Past Inspiration to Current Motivation
• Evidence through Data
• Concept and Strategy of Program
• Quantitative Statistics
• Impact: Employees, Members, Organization as a whole
• Looking Ahead
Overview
Past Inspiration to Current Motivation
Past Inspiration: Goal to Reality
"Develop your dreams. Advertise your goals. Execute your plan. Close the sale."
Michael Dooley
Traditional Strategy vs. Strategic Innovation
Current Motivation
• Where to Play: Member needs and experience • How to Play: What we offer is a win-win-win • How to Win: Value all around
Sniukas, M., Lee, P., Morasky, M. (2016). The Art of Opportunity. Hoboken: Wiley.
Evidence through Data
Survey Results
Google Consumer Surveys Sample: National adult Internet population
Are you satisfied with the amount of money you save each month? [Results for all respondents]
Survey Results
Google Consumer Surveys Sample: National adult Internet population
Are you satisfied with the amount of money you save each month? [Results for 25-34 yr olds]
Survey Results
Google Consumer Surveys Sample: National adult Internet population
What percentage of your income do you put into savings in an average month? [Results for all respondents]
Survey Results
Google Consumer Surveys Sample: National adult Internet population
What percentage of your income do you put into savings in an average month? [Results for 25-34 yr olds]
Survey Results
Google Consumer Surveys Sample: National adult Internet population
If your bank or credit union built in an automatic savings plan with your regular car payments, would you choose this product as a way to grow your savings?
[Results for 25-34 yr olds]
Survey Results
In general, how secure do you think your members feel with their current savings balance?
Do you feel that a lack of adequate savings account balances contribute to auto loan delinquencies and
defaults at your credit union?
SurveyMonkey Sample: CU employees and executives
Concept and Strategy of Program
Savings Accelerator: Program of interlocking gears
Large accumulation of savings once you pay your loan off
Reduced rate on
your new auto loan
Increased rate in your new savings
account
Interlocking gears
Up to $2000 = 1.0% APY
1) Increased rate on your new savings
• Unknown savings rates on own accounts
• Millennials have not experienced the magnitude of compound interest
Interlocking gears
2) Reduced rate on your new auto loan
• Thrifty and Frugal: Groupon, Cartwheel, Airbnb, etc.
• No layered products gimmicks
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
0.45%
0.50%
< 620 FICO 620-669 FICO & NoScore Borrowers
≥ 670 FICO
Interlocking gears
3) Large accumulation of savings when loan is paid off
• The "unexpected expenses"
• Laying the foundation with $1000
• Your sinking fund
Quantitative Statistics
Statistics of Savings Accelerator loans
$13,612 Average loan amount
WA FICO: 665 Range: 497 - 850
WA DTI: 30% Range: 10% - 82%
WA LTV: 95% Range: 40% - 141%
WA Term: 61 months Range: 24 - 84 months
WA Rate: 5.40% Range: 1.94% - 11.99%
Goal: Millennials
4%
42%
19%
22%
10%
3% 1%
< 20
20 to <30
30 to <40
40 to <50
50 to <60
60 to <70
>= 70
Goal: Attract new borrowers
9
1
4 2
4
1 2
1 3
1
6
12 13 13
8
13
20
0
5
10
15
20
25
Quantitative Measures
27
71
114
140
0
20
40
60
80
100
120
140
160
June 2016 July 2016 August 2016 September 2016
Loans Originated
Quantitative Measures
$2k
$8k
$12k
$14k
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
June 2016 July 2016 August 2016 September 2016
Interest Saved
Quantitative Measures
$14k
$20k
$32k
$43k
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
June 2016 July 2016 August 2016 September 2016
Savings Accumulated
Impact: Employees, Members,
Organization as a whole
Employee Experience: Corinne Loe
• Champions the concept
• Every member matters; no one left behind
• Passion to create change and imbeds optimism
Member Experience: Ce'Airra T.
• 26 yr old millennial
• "Able to save for certain things, but struggles if not tied to something specific"
• "This forces me to save, regardless of a thought out plan"
• Music career: CiCi Bella http://www.cicibella.com
Organization: Core Values
Organization: Financial Soundness
• Potential of reduced interest income and increase in interest expense
• Offset with reduced probability of charge off and credit union's added protection in event of default
Looking Ahead
CFPB Study
Exposure
Importance of Future Actions
• Provide accessible, robust resources
• Get ahead of the payoff to provide impactful financial advice
• Concept is scalable and relevant
Thank You!
Q&A with
Nicole
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