PenFed Ads Tout Credit Union Heart & Bank-Sized Conveniences

PenFed on Monday launched an ad campaign reaching core markets in five states, the District of Columbia and Puerto Rico, telling people that PenFed has the heart of a credit union and the sophistication of a bank.

And, moreover, anyone in America can join PenFed of Tysons, Va. ($24.8 billion, 1.8 million members), the nation’s third-largest credit union.

The “Better Together” advertising campaign is the theme for PenFed’s marketing in 2020, an expense of less than $50 million.

It is also a response to CUNA’s “Open Your Eyes to a Credit Union” campaign launched in January 2019. Those ads address research that showed that many people did not try to join a credit union because they thought they couldn’t provide the level of service they expected, and that membership rules would exclude them.

More than 750 credit unions and other organizations had pledged more than $46.5 million to the awareness initiative as of Nov. 30. James R. Schenck, PenFed’s president/CEO, said he has been impressed by the “Open Your Eyes” campaign, but the credit union has not pledged additional money to support it.

The ads are designed to build on the CUNA campaign to “unlock that PenFed has been one of the best-kept secrets nationally,” Schenck said. Few realize its level of technical sophistication. As an example, he cited that PenFed processes more than 100 million transactions a month just through online channels.

“In the financial services industry, scale matters,” Schenck said. “It is important that you build your brand to those who are eligible to join your credit union.”

And for PenFed, eligibility means everyone. PenFed became one of a handful of credit unions with a national charter a year ago when it acquired Progressive Credit Union of New York, which had a national charter that provided some luster to its portfolio of taxi medallion loans that had generated heavy losses.

While that universal eligibility is part of the PenFed secret that needs unlocking to the public, banks recognized it right away. The American Bankers Association was on the spot a few days after the emergency merger to take on the role of defender of small credit unions threatened by a “large and aggressive” PenFed expanding its field of membership.

Schenck said the complaints of banks were a “red herring,” drawing attention away from the fact that the entire credit union movement has fewer assets than any one of the largest banks.

“All our dividends are paid directly to our members,” he said. “Banks don’t want to say all their dividends are paid to the shareholders. They don’t offer the best value proposition to the end consumer.”

The ads will begin in PenFed’s core markets in California, Texas, Florida, Virginia, Maryland, Washington, D.C. and Puerto Rico. PenFed will retain the “Great Rates for Everyone” tagline and use of its familiar jingle from previous campaigns.

They were designed by WhiteSixtyFour, an independent subsidiary of PenFed, with input from focus groups of consumers. Gaurav Bhatia, PenFed’s chief marketing officer, said elements of the ads will be tweaked for different markets to give them a regional flavor.