While hanging around the GAC this year, I caught up with my friend Jamie Chase, Owner & Instigator of Goodness (yes, that’s her title) at CU Strategic Planning. During our talk, she brought me up to speed on her latest passion project, the American Debt Relief Challenge, built around this idea:

It’s not fancy. Just a simple truth. Not-for-profit credit unions have lower credit card rates than big, for-profit banks. When you transfer your debt to a credit union, more of your monthly payment is applied to reducing the debt and less to cover a high interest rate. It’s the easy and honest way to save a lot of money.

Here are some highlights from our conversation -

me: So what’s the backstory on this project?

JC: Over that coffee my friend Scott Butterfield described a balance transfer program which saved the average family $200 a month. Holy wow! That’s a car payment or station wagon full of groceries for most families. Credit unions across the U.S. are running balance transfer programs. What if we measured the national savings?

So we reached out to as many smart people as we knew at the time to help create the American Debt Relief Challenge.

me: How does it work?

JC: Credit unions have lower rates than for-profit banks. (The average mega-bank default rate is 26.8%. No credit union I know of has a default rate of 26.8%! ) The average consumer makes one late payment a year and average people with decent credit are punished by these default rates.

When the average consumer transfers their cc debt to your credit union, more of their payment is applied to reducing the debt and less to cover a high interest rate. The average total savings over the life of the card is $13,000. National media covers the millions saved, local papers cover local CU stories. The truth in the news shows consumers they can get help from credit unions.

Along the way, credit unions attract new members, help more consumers and grow net revenue.

Credit unions can join the ADR Challenge without changing anything. We’ve kept the reporting easy. Participating CUs just have their card processor send us their weekly or monthly balance transfer report.

me: I’ve noticed that most of the do-gooding by credit unions is woefully undercommunicated. How are you and they going to get the word out about this?

JC: The millions saved is an easy media pitch, and we’ve got credibility firepower. Filene Fellow, Robert Manning PhD. author of Credit Card Nation is taking the ADR Challenge to the national media during his regular interviews. Just yesterday he was on NPR talking about the ADR Challenge.

Speaking of, if you’re doing balance transfers already, but want to do it even better, you’ve got to check out Manning’s Responsible Debt Relief Algorithm. We encourage credit unions to use it as new means of underwriting.

We also have widgets for credit unions and leagues. We roped former NASA employee, now CU tech guru, Jason Green into making an interactive savings map and ticker widget that shows the millions credit unions are saving consumers nationally, by state and by credit union. Your widget shows the amount your CU is saving members.

me: You seem really jazzed up right now.

JC: I’m really passionate about this. It’s credit unions helping people to help themselves in a desperate time. It is our chance to do something to make a difference right now, to make life better for our neighbors and members. ADR is the credit union philosophy in action: service, social responsibility, financial education, cooperation. It clearly depicts credit union pure goodness. It strategically grows loyal credit union members and increases credit union revenue during this corporate stabilization debacle. It will save at least one credit union from PCA by increasing net revenue.

Do you think any member we save from the predatory default rates of the mega banks will forget what we’ve done for them? No, they will stay with us and better understand why we are different.

. . .

Amen. Thanks, Jamie!

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Jamie Chase, CUDE, is an owner and instigator of goodness of Credit Union Strategic Planning. She is a former PBS producer and was previously the communications director for the Washington Credit Union League, where she introduced the Biz Kid$ PBS program to the credit union movement. Jamie has done PR for the World Council of Credit Unions and is known for her advocacy of active credit union elections as a membership growth solution.

These Target spots came on last night during the Grammys. Man, I like them a lot:

They promote living well through frugality at a time when everyone’s feeling the weight of our whacked-out economy. As one YouTube commenter put it:

“Bad economy doesn’t have to mean life is going to suck, just means we need to be more creative.”

At the same time these spots position Target as the jumping off point for that kind of creativity. Agency Peterson Milla Hooks did a great job of wrapping an important message up with on-point positioning.

Frugality and thrift allow us to emphasize those things that are most important in our lives. When we restrict our spending on the unimportant, we’re able to indulge ourselves on the things that matter most.

...from Get Rich Slowly’s ‘The Art of Frugal Living’

(via Aaron Martin)

When Brent asked me to be a guest blogger, I initially was writing a post on my love of NPS. But in the past week have had the opportunity to spar with Ron Shevlin again on the subject, so you can go there for that.

Then I read Doug True’s guest post. What’s on his amazing mind. It got me thinking. I just celebrated my 28th year in the credit union movement. If you told me 28 years ago that I’d be a guest blogger on Open Source CU—huh? There are about four words in that sentence that didn’t exist 28 years ago.

So, what’s on my mind?

I’m in Oshkosh this morning. Watching the news.

I just heard my copy of USA Today drop in front of my door.

Open it.

Front Page: How Rising Home Values Placed your Finances at Risk.

Hmmmmmm…you mean all of the VISA Home Equity cards weren’t a good idea?

It goes on to say….”Banks urged owners to borrow more, based on ‘phantom equity’ that has vanished.”

Flooding Threatens Outdated Levees

I am seeing tons of evidence of last week’s flood in Oshkosh. Very sad.

Sports: Hmm. Celtics won. Probably not the best choice for the announcement:

“Celtics Reign, End Drought.”

Money section: Banks Raise Penalty Fees for Clients’ Overdrafts.

Too depressing.

Let’s see what my google alerts give me. Ahhhhh…...Grace.

What a beautiful word. Grace.

Rita Haynes, CEO of Faith Community United Credit Union appeared in the Dallas Morning News yesterday. “Give Credit Unions the Credit They Deserve ” was the title of the article.

They have created the “Grace Loan” – a small, short-term loan that requires the borrower save a portion of what they would have given to the payday lender in fees, thus teaching them good financial habits and helping build a credit history for their goals.

It got me thinking about the history of credit unions. Our purpose in society. Our cause.

Grace: Pay day lenders are charging interest rates that can reach 400 percent and cripple those who are least able to bear the consequences of debt.

History: The first credit union in North America, the Caisse populaire de Lévis in Quebec, Canada, began operations on Jan. 23rd, 1901 with a ten cent deposit. Founder Alphonse Desjardins, a reporter in the Canadian parliament, was moved to take up his mission in 1897 when he learned of a Montrealer who had been ordered by the court to pay nearly $5,000 in interest on a loan of $150 from a moneylender.

Grace: While payday lenders are geared to take advantage of the poor, credit unions – with investment pools of money formed by members themselves – are geared to help the working class or low-income families establish good credit.

We counsel folks to take loans that are appropriate for their circumstances and in this way protect their members from crushing debt and encourage a habit of savings.

History: Credit Unions were chartered to make loans for provident and productive purposes only.

Grace: We teach someone how to plan and save and become a good credit risk.

History: Credit unions were chartered to promote thrift.

Thank you Rita.

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Denise is a rambunctious Culture Consultant. Her goal is to help credit unions question everything and to renew their faith and their commitment to the credit union brand. Read more from Denise on her blog Cult-ivation .