Teachers FCU Rebrands, Is Set to Expand

After launching a new brand identity in the middle of a pandemic, New York’s second largest financial cooperative has ambitious plans to expand nationally.

In an interview with CU Times, the $8.2 billion Teachers Federal Credit Union President/CEO Brad Calhoun, a former executive for Bank of America and the $14.4 billion First Tech Federal Credit Union in San Jose, Calif., said the planning process for the national strategy began in earnest soon after he took the helm in June of 2019 upon Robert G. Allen’s retirement.

Without revealing too many details about the national rollout, Calhoun indicated it is already underway.

“I would say we’re still in the infrastructure and planning stages. We have, through other avenues, already been growing through some of our fintech partnerships with Happy Money, Splash and some other parties,” Calhoun said. “So we’re already growing in many other states from here to California to Florida, but as far as targeted states we’re looking to make a more concerted effort beyond either those types of partnerships or indirect lending. We’re working through what that’s going to look like. We are looking to leverage the national charter and reach, but as far as some of the specifics, I’m not inclined to go into deeper detail at the moment.”

Nevertheless, Calhoun indicated that Teachers expects to form partnerships with other educational organizations to attract new members in other states.

Calhoun’s predecessor set the national launch pad after he negotiated the acquisition of Melrose Credit Union and received its open charter in September 2018, when the NCUA liquidated the credit union after its taxi medallion loan portfolio lost nearly $745 million over three years.

Two other credit unions also got open charters as a result of acquiring failed taxi medallion credit unions. In 2016, the $9.9 billion Bethpage Federal Credit Union in Bethpage, N.Y., merged Montauk Credit Union after its taxi medallion loan portfolio went south, and in 2019, the $26 billion Pentagon Federal Credit Union in McLean, Va., merged Progressive Credit Union after it was conserved for its taxi medallion loan losses.

In their NCUA Call Reports, the three credit unions noted the U.S. population – 330 million people – as their potential members.

Teachers in Hauppauge, N.Y., agreed to acquire Melrose’s $412 million consumer, residential and commercial loan portfolio, but not its troubled taxi medallion portfolio.

After the acquisition, Allen mentioned in a September 2018 interview with CU Times that the open charter enables Teachers to basically select what appear to be the best options for logical growth.

In preparing to meet that national growth strategy, Calhoun said Teachers is undergoing a major digital transformation along with a number of projects in CRM, AI and “everything in between” to make the member experience scalable.

A big part of that digital transformation included a revamped website that went live on Nov. 18, which features a new digital account opening process that enables members to sign up for a new account in less than five minutes and a financial resources knowledge center.

Calhoun also hired new senior executive talent including Denise McGlone as EVP and CFO, who joined Teachers after ­holding the same title at PenFed for more than four years; Suresh Renganathan as chief technology officer, who served as director of technologies for American Express and was head of digital engineering at Farmers Insurance Group; and Inna Sprague as chief experience officer, who served as vice president of sales and service for First Tech, where she led its growth in share balances by $925 million and acquired 21,000 new direct members last year.

To help Teachers develop its new brand positioning, the credit union conducted market research, and reviewed historical information and other data points that determined the credit union did not have a strong brand awareness across its own community, which primarily encompasses Long Island, Queens and Manhattan.

“That was also a huge driver for how we would take the Teachers brand and make it stronger here, because if we can’t do it here, then why would we be able to do it in other parts of the country?” Calhoun noted.

He said he suspects the credit union’s brand awareness wasn’t very strong because it tended to promote itself through traditional marketing channels versus investing more resources in a digital budget and social media to reach audiences. Calhoun also acknowledged the credit union may have mistakenly emphasized points about rates and products, when it should have instead conveyed how it works to help consumers live better financial lives.

For its brand repositioning, the credit union’s executive team decided to make a subtle but important change to its name and logo from TFCU to Teachers. Its new tagline, “smart for all,” is a critical piece of Teachers’ primary message.

“Our credit union was founded by teachers, but now we are financial teachers, and I can’t think of a better name – Teachers,” Calhoun explained. “You know, you can have a bunch of consultants that will come in and tell you how and why you should change your name but we realized that we are right where we needed to be, to embrace the fact that our role is literally to help people make smarter financial decisions in teaching them how to live better financial lives and to be strong financially.”

While the marketing campaign was set to launch in February, it was delayed until March when the first COVID-19 cases were reported in New York, which soon became the epicenter of coronavirus cases and deaths.

Through social media, digital media and traditional media channels in the New York metropolitan market, Teachers introduced its new brand identity and logo with aspirational marketing messages stating that the credit union stood ready to help its members and communities through the coronavirus health and economic crisis.

“Today, we measure the distance between ourselves and others, but soon we’ll measure the distance of how far we’ve come, how we’ve met the challenge and how we came out the other side with our heads high,” Calhoun said in one promotional video while standing in front of Teachers’ new logo. “We’ll look to the future and set our sights on a better tomorrow. And no matter what the future holds at Teachers Federal Credit Union we’re here to go the distance with you, always by your side and ready for anything.”

A key element of Teachers’ brand repositioning is to prioritize what it calls “elevating the member experience” by providing members with the guidance and expertise they need to make smarter financial decisions.

The credit union is taking a different approach, however, to delivering this financial guidance.

Instead of offering in-person or online financial education courses, Teachers’ strategy will be to provide the financial expertise to members wherever – in the call center, branch, online or mobile phone – and whenever they need it. Calhoun said he believes offering this type of service will be a key differentiator for Teachers in the marketplace.

“It’s about building experts across our platform to meet members where they are, understanding where they are in their life stage and [knowing] how can we play a role in helping them at the next stage of their financial journey,” he explained. “We believe that the value we offer following that strategy will help us grow even on the national scale.”

Calhoun said delivering financial guidance and education will be especially important during the pandemic, which has plunged the nation’s economy into a recession and left millions of Americans jobless, despite the unemployment numbers dropping from a high of 14.7% in April to 6.9% in October.

More than half of Americans are finding some factors are making it more difficult for them to pay down their debt, according to a recently released Harris Poll of more than 2,000 U.S. adults.

The most common factor is the reduction of income (22%), which has increased significantly since both March of 2020 (19%) and March of 2019 (17%). Other common roadblocks to minimizing debt include financial emergencies (19%), fees/interest rates (15%) and/or the inability to find room in their budget to increase debt payments (14%).

The poll was commissioned by BAI, a nonprofit independent financial services organization, and the National Foundation for Credit Counseling.