Guest Author Melina Young: Get a Coffee – Save $300 Million

Melina Young is an owner and president of Credit Union Strategic Planning. Her research has been featured internationally and most recently at a symposium in India. She is a regular guest lecturer at the University of Washington. Melina is the project lead for one of the fastest growing small credit unions in the world. She bats 1000 at grant writing, securing six figures annually for credit unions. Of the five grants she authored in 2008, all have received funding.

Melina is also one of the bright minds behind the American Debt Relief challenge, the widget of which recently debuted at the top of CUJournal.com. To give you more information, we asked Melina to be a guest author and walk you through the ADR - how it came to be, who's behind it and where she and her group hope to go.  

Get a Coffee – Save $300 Million

"You won't believe the 4-hour coffee conversation I just had," my business partner Jamie Chase said to me a few months ago. "We are going to help credit unions grow their net revenue while saving consumers $300 million." Intrigued? So was I...

Over that coffee our friend Scott Butterfield described a balance transfer program to Jamie which saved the average family $200 a month. That's a table full of groceries or a car payment for most families. "Credit unions across the U.S. are running balance transfer programs," Jamie said excitedly. "What if we measured the national savings?"

So we reached out to as many smart people as we knew at the time to help create the American Debt Relief Challenge. We roped former NASA employee, now CU tech guru, Jason Green into making an interactive savings map and ticker widget that shows the millions credit unions are saving consumers nationally, by state and by credit union. Together we will:

• Increase credit union net revenue 
• Attract new credit union members  
• Save consumers money  
• Promote the credit union difference

In his speech at the CUNA GAC, NCUA Vice Chairman Rodney Hood called the American Debt Relief Challenge "bold" and "something every credit union should look at."

How it works (bold, but simple logic): The average bank default rate is 26.8%. Credit unions don't punish members with default rates, and I don't know of any credit union with a rate even close to 26.8%! 

People with good credit are being punished with these default rates. When these consumers transfer their cc debt to your credit union, more of their money goes to the principle and less to cover a high interest rate. The average total savings over the life of a card is $13,000.

If you're already doing balance transfers, but want to do them even better, you've got to check out Filene Fellow, Robert Manning PhD's Responsible Debt Relief Algorithm. We encourage credit unions to use it as new means of underwriting. National media covers the millions saved, while local papers cover local CU stories. The millions saved is an easy media pitch, and we've got credibility firepower. Manning, author of Credit Card Nation is taking the ADR Challenge to the national media during his regular interviews. He has already mentioned ADR on "respond" NPR. The truth in the news shows consumers they can get help from credit unions. Credit unions attract new members, help more consumers and grow net revenue. Need an advertising campaign? The best advertising agencies in the nation are getting into the ADR Challenge. Currency Marketing was the first agency to design several campaigns for ADR Challenge participants.

You can join the ADR Challenge without changing anything at your CU. Even the reporting is easy. Just have your card processor send us your weekly or monthly balance transfer report.

Leave a comment for the ADR team, or visit their website at ADRChallenge.org.