No Frills Approach Spawns Niche Market Success

Tom Geggel, Callahan & Associates
February 4, 2005

Whitefish Credit Union in Montana ($563 million in assets) is proof that success for credit unions is not directly correlated with broad product offerings. Last year, Whitefish CU experienced 20% asset, 29% loan, and 19% share growth while maintaining a 0.8% expense/average assets ratio. Yet it does not offer checking accounts or credit cards and has only one share account.

Whitefish CU has a "plain vanilla" approach, only offering one share account, free check cashing services, debit cards, and bill pay. It focuses its efforts on core competencies to enhance members' return on dividends. The menu offerings are strategically simple to increase member value. For example, it does not offer a credit card program because of the associated fees. It also does not require an application or closing fee for loans outstanding.

The success of Whitefish CU is attributed to its community involvement and consistent operational approach. Both factors have helped attract new and retain current members, as well as generating consistent growth.

Strong Community Involvement

Since Whitefish CU is heavily involved in the community, it has not advertised since April 1984. It relies on strong performance and quality customer service to draw new members.

Whitefish CU has expanded its original membership of railroad and lumberyard workers over time to 45,000 residents out of a field of membership of 150,000 with only 58 employees. It has a community charter to serve Whitefish, Montana and surrounding areas within a 50-mile radius.

Twenty-nine active volunteers with diverse backgrounds serve on the board of directors and various committees for Whitefish CU. Charles Abell, president of Whitefish CU, says he often takes ideas from these committees and enjoys being involved in the community. Abell speaks at local high schools about personal money management and the role of credit unions in students' lives.

Consistent Operational Philosophy

Since 1934 when Whitefish CU was founded, it has focused on returning the most value possible to its members. Excerpts from its operational strategy illustrate the foundation of this:

The Whitefish Credit Union will operate in the traditional credit union fashion; providing the basic credit union services of shares and loans, offering but a few limited services beyond those.

We do not wish to become a bank or bank-like in operation, function, or appearance. We will follow the historical purpose of a true financial cooperative, treating all our members as equally as possible.

Whitefish executives closely monitor cost expenditures on new programs to remain competitive in its local area and maintain aggressive dividends on share accounts. They also make sure that new programs are consistent with their operational philosophy.

Tom Geggel is an industry analyst with Callahan & Associates. This article originally appeared on Callahan’s website and is reprinted with permission.