Illinois Credit Union Opens Library Branch
Kane County Teachers Credit Union's opening of a branch in a local public library may be an industry first.
While many executives are always searching for new strategic branch locations, Mike Lee, president/CEO of the $232 million Kane County Teachers Credit Union in Elgin, Ill., may have found a new a new gem of a locale that no one, until now, has ever thought of – the local public library.
In June, KCT Credit Union expects to open new a mini branch, about 330 square feet, inside a 153,826-square-foot Gail Bordon Public Library. It’s the third largest public library building in the Land of Lincoln and features a spacious round reading room with large windows overlooking the Fox River.
It’s anticipated that the partnership will help both successful organizations accomplish what they always need to keep growing – new credit union members and new library patrons.
Once the digital age arrived, many thought public libraries, like credit union and bank branches, would eventually become obsolete. And while there are fewer people visiting libraries just as there are fewer members going to branches, people nevertheless still value their community presence of public libraries and branches for different reasons. Just as libraries serve and complement the learning experiences that enhance people’s lives, credit unions serve people’s financial needs by helping them learn how the acumen of thrift can improve their lives.
This partnership is expected to benefit both organizations, giving the library opportunities to reach more than 18,000 credit union members while opening KCT to a new market of the 2,000 to 2,500 people, including millennial parents and their children, who visit the library every day.
“We’ve been blessed with this opportunity, but what I’m really excited about is I’m hoping that this could open up doors for other credit unions to do the same thing, because I think it could really make us look different,” Lee, whose credit union may be the first or at least one of the first in the industry to open a branch within a public library, said.
Like many credit unions, KCT has for many years supported the local public library and its various community programs. The library is one of the 300 SEG groups served by the credit union. KCT also provides financial products and services to public and private school districts, dozens of public agencies, non-profit groups and businesses.
“The idea of bringing another layer of literacy, financial literacy, is very exciting to us,” Denise Raleigh, division chief of public relations and development for the Gail Borden Public Library District said. “We do anticipate that the additional customers that will be coming into [the] KCT [branch] will also become library customers. We’re excited about expanding our base.”
The library and KCT are planning to include financial literacy components in some of the library’s educational programs.
“Right off the bat we will be incorporating basic checking, savings and financial literacy into an ongoing popular program, ‘English for the Workplace,’” Raleigh explained. “This program is very popular and it is targeted for Spanish speakers who want to progress in their careers by polishing up their English skills. Financial literacy will be another bonus for program participants.”
Elgin is a diverse community about 40 miles northwest of Chicago with a population of about 112,000. Forty-three percent of Elgin’s population is Latino-Hispanic, 7% is black, 5% is Asian and 65% is white.
“We also have a play area in our kid space area that will soon have a banking playset thanks to KCT,” she said. “Programmers from youth, teens, adults and Hispanic Services have met with representatives of KCT to see how KCT and the library can enhance the services that we offer to people in the community.”
Lee believes the library branch will be a good avenue for attracting young members and their parents, many of whom are millennials who happen to be library lovers.
KCT is planning to open a program to help children learn about the value of saving money. In addition to a savings account with a higher interest rate, children will receive a branded piggy bank to deposit their coins and $25 bonus payments when they reach savings goals. Every time kids come to the library, they can also bring their piggybanks and slip their coins into an automatic coin counter so they can see how their savings are adding up.
Lee pointed out the savings program will be enhanced by a convenience factor because a lot of these kids, and some along with their parents, visit the library regularly.
Millennials, now in the age range of 22 to 37 and many of whom are parents or soon-to-be parents, are big supporters of public libraries.
Last year, a Pew Research Center study found millennials are more likely to have visited a public library in the past year than any other adult generation. Fifty-three percent of millennials visited a public library or bookmobile in the past year compared to 45% of Gen Xers and 43% of baby boomers. Millennials are also more likely to use library websites.
Relatively high library use by millennials might be related to changes that many public libraries have undergone in the past 20 years. Previous Pew Research Center surveys have documented how extensively people use computers and internet connections at public libraries, as well as how interested they are in extra services such as literacy programs for young children, meeting spaces for community groups and so-called “technology petting zoos,” which provide hands-on opportunities to explore 3-D printers and other tech gadgets.
The Gail Borden Public Library building opened in 2003 and holds nearly 2,000 programs, maintains 130 personal computers and has a seating capacity of more than 800.
However, Pew Research also found that use of libraries drifted down among the overall population from 53% in 2012 to 44% in 2015. And while use of public library websites increased from 25% in 2012 to 30% in 2013, it plateaued at 31% in 2015, according to Pew.
Likewise, though millennials are more likely to manage their finances through social media, as well as payment and fintech companies, they have not given up on branches any more than other generations, according to research from Fiserv in Brookfield, Wis.
In 2017, 54% of consumers visited a branch compared to 61% in 2016, according to Fiserv research. The share of millennials’ (50% to 49%) and Gen Xers’ (53% to 49%) branch visits remained close to last year’s survey, but the number of boomers (67% to 57%) and seniors (79% to 63%) visiting their financial organizations dropped sharply.
Like many executives, Lee understands that the branch still provides overall value for members and the credit union.
“We wish we had the resources to build a lot more branches, but as you know branches are very expensive,” Lee said. “It usually takes a few years to make them profitable.”
He expects the ROI to be much shorter for the library branch because the cost build-out will be about $160,000, a fraction of the cost of a stand-alone branch. And because of its partnership with the library, the credit union has no lease payments.
Lee came up with the library branch idea about a year and a half ago after speaking with a school superintendent who suggested the credit union open an in-school, full-service, stand-alone branch with its own entrance and exit. The CEO thought the superintendent came up with an interesting concept that Lee is still working on and might be the next chapter of expanding the credit union’s branch network.