26 THE NAFCU JOURNAL March–April 2023 THREE WAYS MEMBER RETURNS CAN HELP CREDIT UNION LEADERS GROW THEIR BUSINESS By Matt Jernigan, Executive Vice President, Ascend Federal Credit Union MANAGEMENT INSIGHT Leveraging annual bonus dividends or patronage dividends can prove to be an effective strategy to attract new members and business clients while demonstrating the credit union difference. The member return is a much-debated topic in our industry. Some executives prefer to distribute surplus cash from operations in the form of grants or donations to philanthropies or economic development organizations. Others contend there is no ideal way to allocate dividends equitably (because the differences between products used by members, such as debit cards or mortgages, for example, yield different “profits”). The member return naysayers so far have carried the day and only a small percentage of credit unions return funds to customers. Ascend Federal Credit Union, according to research from a financial trade association, is among only 1% of American credit unions that annually share financial success with members via a member return—one of just 51 out of nearly 5,000 institutions. We believe, however, that credit unions can have the best of both worlds and distribute returns that treat members fairly and support organizations that are doing great work in the community. Last year, Ascend returned $5 million to members in the form of bonus dividend payments, loan interest refunds and reward payments for loyal debit card use. Here are three reasons why the member return is an integral part of our corporate strategy: 1. The member return reflects our members-first commitment One important way we fulfill our nonprofit mission is by returning to our members a generous portion of the surplus proceeds earned by running our credit union efficiently and effectively. The distribution is our way of proving our loyalty to members who have trusted us with their hard-earned money, and who use the variety of products and services we offer. Our members get to share in our success, unlike other financial institutions where only shareholders receive a dividend. 2. Member returns help stimulate local economies and support philanthropic organizations Successfully positioning a credit union as a preferred choice involves more than providing superior customer service and innovative products. We believe it is our responsibility to support communities where we are located. Ascend has disbursed more than $104 million since 2005 when we initiated our member return program. A substantial portion of the money goes to local members and businesses—and those funds help stimulate economic activity and support philanthropic organizations that are making a difference in people’s lives. “Ascend Federal Credit Union is among only 1% of American credit unions that annually share financial success with members via a member return—one of just 51 out of nearly 5,000 institutions.”
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