Posted by Jon Cook, CUES editorial intern
"What are you doing to help members save or spend their federal stimulus rebates?" was the question CUES Editor Lisa Hochgraf posted in early April to CUES Net, a CUES-members-only listserve. (She also wrote about the stimulus rebate support being offered by one marketing firm in this Nexus Connection post.)
CUES Netters responding to Lisa's post reported giving members new savings and borrowing options that coincide with the stimulus package. Other things credit unions can do at this time include pointing members to useful resources (see below) and helping members who wouldn't usually file a return do so, to become eligible for the rebate.
One CUES Net participant reported that her credit union is offering a great savings rate to encourage members not to spend the rebate right off the bat.
"We created a five-month, 5 percent certificate, $1,500 maximum that will be offered during May and June as an alternative to spending the money," replied Ellen Yacovone, interim CEO of $150 million Tucson Old Pueblo Credit Union, Tucson, Ariz. "Our primary focus will be educating our members to first use the funds to pay off debt, but if they don't have [a loan to pay off], save it instead of spending it."
Another CUES-member credit union is offering special programs to try to bolster waning loan demand.
"We are rolling out several loan specials to carry us into the summer," wrote Marshall Boutwell, CEO of $93 million Gwinnett Federal Credit Union, Lawrenceville, Ga. "Hopefully, that will stimulate increased loan demand, because we are seeing loans go down (despite great rates) and deposits are flowing in. Members seem to have stopped spending and they are paying down their debt. While it is not good for the CU over the short run, it is good for the members and the CU in the long run."
And still another is inviting its members to "double their rebate."
"We're offering our members a way to double their stimulus checks by depositing their checks and taking out a partially secured loan for twice the amount of their deposit, up to a loan amount of $3,600," wrote David Lucas, CEO of $54 million Leyden Credit Union, Franklin Park, Ill. "Repayment is up to 24 months and the rate is dependent on the term they choose.
"We're marketing it as a way to double your money and still have the original amount available after the loan is repaid," he explained. "Since the loan is half secured, we'll be able to offer it to members that may be struggling a little bit."
In addition to offering special savings programs or loans, CUs can direct their members to the MyMoney.gov Web site, created to provide access to financial education tools that can help Americans to save, invest and manage money. The site includes a section specific to the stimulus package. It also has warnings about scams that may go along with the stimulus package payments.
Indeed, with about $100 billion going to an estimated 130 million households, there has been worry that scammers will try to snag a chunk for themselves. The Internal Revenue Service urges consumers not to give account or Social Security numbers over the phone or via e-mail, because the IRS will not be contacting anyone by phone or e-mail about the stimulus payments. The only way to get the payment is to file a 2007 federal return, which brings up a question: What about those who don't usually file a tax return?
CUs can educate members about how to get a rebate, and help those who wouldn't usually file a tax return. This could include members on disability, Social Security or veterans benefits. This is a way for many CUs to give back to their members.
The April 15 tax deadline has come and gone, but people can still complete their tax forms and receive the stimulus payment. The final deadline for filing a return to become eligible to receive a stimulus payment is Oct. 15. According to the IRS Web site, the payments will be delayed by an average of about two weeks from previously scheduled payment dates.
Other ideas? What else can credit unions do for members? I look forward to your comments.
