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Ask Jack: Explaining the Current Financial Crisis on Vimeo.

1n 1953, the hard-working employees of McLean Trucking Company grew tired of being abused by big banks. The traditional whipping boys of the banking industry, working class Americans had one of two options for their financial services: become the unwilling cash cows for bankers and their investors; or get shut out of the industry altogether. You see, banks are in business to make money – and lots of it. Helping the little guy meant profiting off the little guy. Not profiting off the little guy meant not serving the little guy at all.

McLean employees knew that they needed a third option. They knew that they needed to find a financial institution that would look out for the little guy – not look to destroy them financially. So they looked to themselves for the answer by organizing their own financial institution. Member owned, not-for-profit, and guided by a democratically elected, volunteer Board of Directors, this organization would seek to serve those needs not met by banks – and do so with it members’ best interests in mind. This not-for-profit financial cooperative is now your very own Members Credit Union.

Though a lot has changed in the past 55 years, one thing certainly has not. Members Credit Union still prides itself on looking out for the little guy. We still make small loans. We still offer low loan rates and high deposit returns. We still provide friendly, local service whether you have $1,000,000 on deposit with us or $25.00. When you call our offices, you get to talk to a real, live person – not some machine.

We offer as many services as humanly possible at no charge. That means checking accounts, savings accounts, membership, life savings insurance, MCU@Home, Tell-Com, eBill@MCU, your first box of checks, ATM withdrawals using a Visa Debit Card, MEMBERS Financial Services consultations, and many other great services are absolutely free to members. Those services that we cannot offer for free are available at the smallest charge that can be justified given their operating costs.

When you are approved for a loan with Members Credit Union, you always get our best rate. When you open a savings account, IRA, or certificate, you always get our best rate. No negotiating is required. No secret handshake. You don’t have to be the President’s second cousin. We treat all members as equals. That means the little guy gets the same treatment as our wealthiest of members. Why? Because it’s the right thing to do.

Members Credit Union has never strayed from the path of doing what is right for members, even if that meant leaving millions of dollars in income on the table. We have never offered teaser rates or other misleading incentives to earn your business. Behind every decision to offer a new product or service to our membership is the sincere belief that our offering will save our members money.

We keep operating costs low. Sure, other banks and credit unions can claim more extravagant branches, richer executives, and splashier marketing. The way they choose to direct their expenditures is their business. Our approach is dictated by the simple realization that every expense we incur is money rightfully owned by our membership. It is our distinct duty to be as thrifty with these expenses as possible so we can continue to provide the most beneficial portfolio of financial products and services you will find anywhere. This means we build simple, yet convenient branches in as many locations as possible. This means we stock them full with employees whose passion is serving members, not serving themselves. This means that our most effective marketing tool is, and always will be, the recommendations satisfied members make to their co-workers, family, and friends.

You see, we look out for the little guy because we are the little guy. Even though we have grown to serve over 52,000 members with 19 branch locations, we have not changed our makeup, the type of employees we hire, or our mission. We are your safe haven from profiteering banks, economic hardship, and usurious fees. We are Members Credit Union, and we look forward to another 55 years of looking out for members like you.

A trip through the grocery store checkout lane can sometimes feel like a game of Twenty Questions. Paper or plastic? Debit or Credit? PIN or pen? Even more frustrating, while you are trying to decide which payment option to use you may be missing the “Latest Weight Loss Sensation” or “Elvis Fathers Britney Spears’ Third Child” articles in the adjacent magazine racks. Does it have to be like this? Absolutely not.

Let me walk you through a typical shopping trip to illustrate the difference between payment options. Last Saturday’s agenda: pick up the dry cleaning, find a new car seat for my granddaughter, buy some groceries at the local Harris Teeter, and bring home lunch for my family. In my tool belt (read “wallet”): a Members Credit Union Cash Card and Visa Debit Card.

I started my travels on Winston-Salem’s Stratford Road being careful to avoid the drivers who insist on multi-tasking (the bumper sticker “Hang Up and Drive” could not be more appropriate). Arriving at the dry cleaners, I received a bill for $31.28. Three payment options were available: cash, credit, or debit. With only $12.00 or so in my wallet, the cash option would not work, so I needed to decide between using my Cash Card (debit transaction) or my Visa Debit Card (credit transaction). Knowing that a Cash Card transaction requires a retailer be on the Star Network, I look for the Star logo. There it was, right on the cash register. Easy decision for me, then; small transaction amount, retailer accepts cards on the Star Network, I use the Cash Card and type in my PIN.

Now it’s off to Target to find a car seat. The intersection of Stratford Road and Hanes Mall Road never fails to produce amazing human behavior. The game, it seems, is to see how many people can run a red light. There were many winners this day – I was not among them.

My bewilderment about the overwhelming number of car seats must have been glaringly obvious because a friendly Target employee quickly offered her assistance to me.

“I’m looking for a Zephyr car seat.” I told the nice lady, remembering my wife’s strict instructions.

“Oh, a Graco Platinum Zephyr Cargo Forward-Facing Car Seat?” she asked.

“Uhhhhh…yeah.”

The cashier scanned my purchase and informed me of the damage: $106.99 with tax. Target accepts cards in the Star Network, so my Cash Card was still in play. However, this was a purchase of returnable items. With my Visa Debit Card I can get what are called “chargeback rights”. This is a fancy term for consumer protection. With chargeback rights, I can dispute charges to my card for a variety of reasons: product/service was damaged, not delivered in a timely manner, or the purchase was not authorized. If this car seat turns out to be defective, and Target disallows a return or exchange, I could use the power of Visa to help me pursue a refund. This was an easy decision: I pressed credit, swiped my card, and signed the receipt.

Then it was off to Harris Teeter for bread, milk, and some random other groceries (four words: Cherry Garcia ice cream). I zoomed down the aisles like a Cub Scout in a soapbox derby, my empty stomach reminding me of the time Mafia-style. Shopping while hungry is a serious offense, to be sure, and may cause full shopping carts and depleted checking account balances. I resisted as well as could be expected, laboring into the checkout lane with “only” $53.17 of groceries.

I knew that I still had to stop and pick up lunch, so this payment method would be an easy choice. There was no way the $12.00 in my pocket would buy lunch for four, so I needed to pick the option that allowed cash back from my purchase. The only way to do this with a Members Credit Union plastic is to use the “ATM/debit” option with a Cash Card. The Visa Debit Card will not allow this type of transaction. So, I informed the cashier I would like cash back, pressed “ATM/Debit” on the POS terminal, swiped my Cash Card, and entered my Cash Card PIN.

With $52.00 now in my pocket, I needed only to drive over to Moe’s Southwest Grill to unofficially be crowned the weekend’s King of Shop. I placed my order, paid $29.46, and drove home to receive my reward.
“Jack, you forgot the laundry detergent.”

Every year about this time, there is a distinct buzz around Members Credit Union. As the leaves in this part of North Carolina start turning beautiful hues of yellow, red, brown and orange, a palpable excitement fills the air. This energy has nothing to do with the moderation of temperatures or the peaceful views of piedmont vegetation, though. Members are receiving their Christmas Club checks! That’s right – it’s Christmas Club payout time! By the time you read this message, most of you have already received your Christmas Club checks/deposits. If not, they are on the way!

A Christmas Club account in my mind is special because of its simple purpose: it encourages members to use the power of payroll deduction to set and meet savings goals. Christmas Club savers know that if they set up automatic deductions from their paychecks on an ongoing basis, they will undoubtedly receive a handsome reward come November of the following year.

Take Suzie T. Member for example. If Suzie, who gets paid weekly, puts aside $20 out of each check into an MCU Christmas Club account, she will end up with $1,043.08 the following Christmas. It is easier than you think to do without $20/week, especially when it means the light at the end of the tunnel is a big stack of cash. That’s what our Christmas Club account does! Even small deposits, if made regularly, will yield major results!

Here is my challenge to you: set a specific savings goal for next year, and capitalize on the power of payroll deduction and your Members Credit Union Christmas Club account to help you reach that goal. Our branches are filled with experts that can help you through this planning process, so please take advantage of that knowledge base. As an added incentive, one lucky Christmas Clubber will win an Apple iPod Touch, one of the neatest gadgets I have ever seen, just for setting up his/her account! You can read more about this promotion on the next page.

Our goal as a credit union is to help members meet their financial objectives. If we can encourage members like you to systematically save money, we feel like we have succeeded in that mission.

Although Halloween is just around the corner, many of you have been spooked recently by something quite different than ghouls and goblins. By now, you have likely heard about the global home mortgage “crisis”. Rising foreclosure rates, due in large part to subprime lending (granting loans to riskier borrowers at higher than market interest rates), have claimed many victims; among them include American homeowners, major mortgage lenders, hedge funds, marginal private banks, and individual investors. As if this were not enough, some estimate that the worst is yet to come. An estimated 2.4 million adjustable rate mortgages will upwardly adjust in the next twelve months, tightening their grip on borrowers who only marginally qualified for the introductory “teaser” rates to begin with.

Members Credit Union’s mortgage loan partner American Home Mortgage (AHM), the lending giant holding 2% of the entire U.S. mortgage business, was not exempt from these struggles. While AHM was not in the subprime lending business, they did deal with what is called “Alt-A” paper. Alt-A paper is really just a loan made to a borrower who qualifies for an A-rating, and likewise the market rate, but does so based on alternative methods such as inadequate income documentation, higher loan-to-value and debt-to income ratios. Growing uneasiness about subprime and Alt-A loans by institutional investors of mortgage-backed securities caused a credit crunch that even AHM could not escape. They filed for bankruptcy protection this summer due to insolvency.

Thankfully, the impact on Members Credit Union members has been minimal. We do not carry any subprime, or even Alt-A, loans on our books. All loans made through our mortgage-lending partner were serviced and held by American Home Mortgage. The few members who had approved, yet non-funded, AHM loans at the time of the bankruptcy filing were quickly paired with lenders who could complete the process. We were able to help all of these members.

This situation has also allowed us to partner with a terrific mortgage loan partner, WR Starkey. As part of our agreement with this organization, they agreed to retain the services of former American Home Mortgage employees Nicole Carson, Ashley McKenzie-Sharpe, and Brian Whitesell. So, the faces will be the same, the friendly service will be the same, and our dedication to providing members with low-cost mortgage services has never been stronger.

As a not-for-profit financial cooperative, our mission is to promote thrift among our members. This means finding ways to help you save money, earn money, and avoid being ripped off. With sound financial planning, Members Credit Union and our members are safe from any so-called crisis – all treats, no tricks.