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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.

It seems I just can’t escape work. MCU@Home sent an email alert to my mobile phone today that my payroll check had been deposited in my account. Pretty neat, eh? On vacation last month, I was able to check my checking account balance toll-free from a pay phone. Super cool! So far this year, I have paid 117 bills online with eBill@MCU – saving me nearly $60 in stamps and envelopes (not to mention the time it would have taken to seal and mail the payments). Cha-ching! Since signing up for eStatements, I get my credit union statement sent to my email inbox three days before I would have with paper statements. FAN-tastic!

No matter where you are – Members Credit Union can be. We have capitalized on modern technology to develop products and services that have given you quicker, more convenient access to your account than ever. Frankly, every phone, internet connection, or ATM you see in your daily life is a direct connection to your credit union. Best of all – these services are 100% free!

As cool as that is, I get the most satisfaction knowing that we offer all of these “bells and whistles” while maintaining the level of personal service that first gave members goosebumps back in 1953. In many ways, Members Credit Union is a throwback to the good old days of financial institutions. When you call, a human being still answers the phone. When you come to a branch (a whopping 17 branches and counting), you see a smiling face that is eager to help you. When you check our rate and fee schedules, you know you are getting a deal as good or better than you will find anywhere else. That’s who we are, and who we want to be.

Members Credit Union could not be more proud that we have been able to couple the traditional service approach of yesteryear with the all-access, all-the-time benefits of next generation technology. Convenient. Accessible. Small town. Big city. Traditional. Modern. All at the same time. I should email the bankers to tell them it CAN be done. Of course, they wouldn’t care (we had them at “free”)!

Driving home a new or pre-owned automobile can feel great! That new car scent – hmmmm. That overwhelming feeling of freedom – ahhhh. That pump-up-the-volume-because-I’m-going-to-sing-along-with-every-song-that-comes-on-the-radio-whether-I-know-the-words-or-not sensation – YEE HAW!

Without doubt, a positive vehicle purchase experience can put you on the proverbial Cloud 9. A bad deal, however, can bring that exhilaration to a screeching halt.

So what makes a great deal? Typically, there are three important things to look at: 1) the price you paid relative to the vehicle’s fair market value in your geographical region; 2) the interest rate on your loan; and 3) payment terms that fit your budget.

Planning, saving, and research can go a long way in minimizing the risk of a bad deal…or you could save yourself the hassle and take advantage of the tools that come along with your credit union membership. Our loan officers are trained to make sure you get a great deal. We can guide you on pricing, even what dealership to go to. Negotiating a fair price on your vehicle sets the groundwork for a successful purchase.

The key, however, is in the rate…

This is where Members Credit Union really comes through! With low loan rates on both new and pre-owned vehicles, you can end up with “Best in Show” financing to go along with your rock bottom low purchase price. Now you are well on your way to a great deal!

Last, you can take advantage of Members Credit Union’s outstanding loan terms. With repayment plans stretching as long as 84-months out, we can make your vehicle purchase fit into almost any budget. Want the comfort that comes with optional extended warranty and supplemental insurance coverage? We can make that happen, too! It is just our way of making this honey-roasted deal even sweeter.

We want you to take advantage of all the money saving benefits your membership entails. With our help, we know you will be humming Bobby McPherin’s Don’t Worry, Be Happy in your new vehicle – not moaning the blues.

Credit unions are going through an identity crisis. No, our employees aren’t blowing their retirement savings on hairpieces, plastic surgery, and fancy sports cars. This crisis has more to do with us maturing as a segment of the financial services industry. We still like to think that we are your grandfather’s credit union. I mean, we still exist with only one purpose – service to our member-owners (read: you). We still operate according to the guidance and wishes of our volunteer Board of Directors, who are elected by our member-owners (read: you). We still operate under tight budgets so that we can provide the highest account returns, the most favorable loan terms, and the fewest/lowest fees possible. We are still Members Credit Union.

My, how we have grown, though…

Your grandfather’s credit union probably offered a share (savings) account of some sort, a secured loan, and some variation of a signature loan. Certainly, this cannot be construed as full-service banking, but during a great part of last century credit unions did savings accounts and small loans better than anyone. Therein lies part of the problem. When you do something so well for so many years, the public ends up knowing you just for that.

Imagine if John Deere developed the best performing bicycle ever. Bicycles and tractors are both pieces of machinery. Both have wheels. Both have steering mechanisms. Both could even be painted green. Would John Deere be able to sell these bicycles? Maybe. Maybe not. The simple fact is John Deere is known as a tractor and farm machinery manufacturer. Even if their engineers were perfectly qualified to design and build bicycles, they would have a tough time convincing consumers like you of that (although, a John Deere green bike may be pretty neat)!

My point is simply this: Members Credit Union still offers the best savings accounts, vehicle loans, and personal loans you can find. Period. What we need to do a better job of, though, is letting you know about the vast portfolio of personal finance solutions we have developed that can truly see you through every step of your life. From share certificates to mortgage loans, investment services to free checking accounts, online bill pay to online account access, retirement accounts to trust services – Members Credit Union offers all the products and services of a goliath bank, with the member-centric mission and structure of a credit union.

So help us with this identity crisis. Help spread the word that it certainly is possible to combine the family feel of your grandfather’s credit union with the multitudes of modern personal finance conveniences that now grace our growing product and service offerings. In the meantime, try to look the other way if you see a grown man riding a green bike while listening to an iPod. It’s just a spell!