WEST PALM BEACH, Fla. – With so much focus on image exchange, share draft penetration isn't getting as much attention. The fact is many credit unions are trying to boost share draft penetration in order to become the primary financial institution for more members. A new Callahan and Associates report shows credit unions in Florida, Arizona and New Hampshire leading in share draft account penetration. So we checked in – if you'll pardon the pun – with some credit unions in those states whose share draft penetration rates not only leave the national figure of 43% in the dust, but are well above average even for their high-performing states. We posed the clich question, What's the secret of your success? After all, the share draft or checking account is considered a key indicator of the member's PFI. It's one thing to head down the street to buy a CD at a bank that happens to offer an attractive rate this week. It's quite another matter to open a checking account and rely on it for a good portion of family's financial transactions. Callahan shows Desert Schools Federal Credit Union in Phoenix at 79.9% penetration. Lee Brice, vice president of branch operations, notes that for more than 10 years there has been in place a checking penetration expectation. By the way, DSFCU freely uses the term "checking." "We aim in the branches for a 75% penetration," Brice explains. "Basically we measure that against new members. So if you open 100 new member accounts, we expect 75 new checking accounts. "Of course that doesn't mean it's only new members who are opening checking accounts. I have had branches that in a given month have had 112 percent." For example, if all new members open a checking account and 12% of existing members sign up, the branch would post 112%. This year that 75% expectation was raised to 80%. It's part of a branch scorecard used to pay branch manager incentives. But what makes members decide to open a checking account? "Basically it's a matter of talking to them and showing them our products, based on prices and features, can match what they're doing elsewhere – and are probably better," Brice says. "Our sales culture teaches employees how to talk to people about products they don't have. We firmly believe our products are the best products for our members." In addition to the one-on-one sales efforts, the marketing department uses direct mail and other approaches. For example, there was a recent campaign inviting members to upgrade their checking account to one with benefits such as dividends, free cashiers checks and money orders, a discount coupon book and purchase protection. Service Credit Union in Portsmouth, N.H., shows up on Callahan's list with 70.21% share account penetration. Karen Benedetti, vice president of marketing, explains SCU offers two types of share draft accounts. One is totally free, the other is also free with direct deposit. More than half of members are signed up for that second option. "The second one offers significant benefits, especially an early payday feature which gives you your pay two days before everyone else," Benedetti says. "My understanding is we are unique in the credit union world with this. We also have a loan discount associated with direct deposit. For civilians the discount is 25 basis points. For the military it's 35 basis points. In addition there's courtesy pay which pays checks so they don't bounce. The courtesy pay price is $9, which is extremely low in the market." In effect, other programs at SCU drive share draft growth. Both share deposits and the loan portfolio grew 9% last year. Many members taking out perhaps a car loan signed up for checking to get a break on their loan rates. Does the high percentage of members with share draft accounts mean many consider the credit union their PFI? Benedetti thinks the answer is yes. "You can tell by the large number that have checking with direct deposit. When you sign up for direct deposit at a financial institution you're making a major commitment. It's hard to unwind that," Benedetti says. As at Desert Schools, a strong sales culture is also important. "We have an incentive program," she says. "The staff knows they can give the member a better deal with these products. It makes it very easy to talk about share draft accounts. With some of the military programs the interest on a loan could be as much as 1 percent less." In the fall of 2005 SCU introduced a refer-a-member program. Existing members receive $50 if they get someone to sign up for a share draft account with direct deposit. Marketing of share draft accounts is primarily through tie-ins with other products. For example, if SCU runs an ad for auto loans, the rate indicated is the one for members with checking and direct deposit. The ad then explains at the bottom what is needed to qualify for that rate. Another credit union on Callahan's list is Tyndall Federal Credit Union, Panama City, Fla. Share draft penetration there is 79.36%. Karen Miles, the marketing director, says there's no one specific thing that accounts for that success. "It's several things we're doing well. One of those things would be across-the-board great service. We're celebrating our fiftieth anniversary this year, and we're an established institution in a small area, which may account for something," she says. "Members trust us, and they know we're here to work for them. We don't really market our checking accounts heavily. I think our success is due to the fact we have a service culture as well as convenient products and services. Our members are extremely loyal. We've really picked up on that in the last few member surveys." [email protected]