Name Droppers

Minus their once-restrictive affiliations, credit unions create new identities—and new opportunities.

Bill Virgin | September 2011 | FROM THE PRINT EDITION

This should be a great time for credit unions to grab market share. Consumers are angry at banks anyway, and not too pleased about rising fees and paltry interest rates. Credit unions largely dodged the real-estate lending woes that required massive bailouts of the banking sector, and as member-owned cooperatives they tend to charge less and pay more. But credit unions have their own competitive challenges—as in, who are these guys?

Run your finger down the list of credit unions in the region: Verity. Qualstar. Prevail. Watermark. Woodstone. Red Canoe. Do you know who they are? Are they even financial institutions?

Not only are they operating under generic names with little heritage, but they’re also operating with comparatively small marketing budgets to go up against the likes of Bank of America, KeyBank, U.S. Bank and Wells Fargo Bank, all with substantially greater resources and more powerful marketing legacies. BECU—the former Boeing Employees’ Credit Union—is one of the largest credit unions in the country and one of the few with enough heft to compete on that scale when it comes to marketing.

So what’s a small or medium-size credit union to do?

In the case of Seattle-based Salal Credit Union, the answer on how to grow is retrench and refocus.

You might not recognize the name Salal, but you’d almost certainly recognize its old name—Group Health Credit Union—reflecting an affiliation with a major health care institution that, like the credit union, is also a cooperative.

Like many credit unions, Group Health Credit Union started with employees at a single workplace, then expanded to include members of Group Health. It gradually added other employer groups or merged with other institutions. In 2004, Group Health Credit Union went to a statewide charter, opening up membership to any resident of Washington. Today, only about a quarter of Salal’s members are affiliated with Group Health as employees or members.

The broader field of membership was one reason why the credit union changed its name to Salal last year. That move, the credit union said in a blog note, was designed to “clear up lingering confusion about who we serve and who is eligible to become a member.”

But while Salal is open to all, it has returned to its historic base—health care—in its recruitment of new members.

“We’ve refocused our membership outreach,” says interim CEO Carol Belland (the previous CEO, John Iglesias, left in July to join a larger credit union in Oregon). “We were