Coastal Federal Credit Union announced the launch of their new VIP Program on January 25 as a new initiative aimed at paying qualified members a special dividend of $1.5 million. The payout was prompted by Coastal’s continued commitment to give back to its members who actively participated in the cooperative over the past year, making it one of the most significant initiatives in Coastal’s 45-year history. This latest contribution added to their already notable position as a leading innovator within the credit union industry.
The VIP Program was designed to reward members who have their primary checking account at Coastal with special benefits and exclusive offers. Members qualified for the VIP Program by performing 144 withdrawals from their Coastal checking accounts during 2011.
“We feel we have a very unique program model,” said Chuck Purvis, Coastal’s Executive Vice President and Chief Operating Officer. “Our VIP program is built solidly around our checking accounts and using Coastal as your primary institution. Likewise, our dividend payouts stand out from traditional patronage dividends in the way they put depth of relationships ahead of volume.”
Among the program benefits, members had the opportunity to earn Loan Rebate Dividends and Deposit Bonus Dividends, which ranged from $100 to $500. Of the 47,000 members who earned VIP status this year, more than 6,000 received a dividend.
“Those are the members who make us successful and we wanted to share our success with them, Purvis added. “It would have been easy to give every member a small dividend, but we felt that lacked substance. “Seven and eight dollar payouts might not get noticed, but even members who knew in advance that they were getting a payout were pleasantly surprised when they saw $200 or $300 in their account.”
The special dividends were earned by being a VIP member with either two or more loan types, or two or more deposit types. Eligibility for each dividend was calculated separately, recognizing that they typical Coastal member transitions from being a borrower to a saver.
“It’s best for us and best for the member if we consider their life stage and which products are relevant to them,” Purvis summarized. “Our aim is to reward them for choosing us when they have a need.”
The $1.5 million dollar payout was a result of Coastal’s prosperous 2011 financial year. This was the second consecutive year Coastal’s net income increased, adding to their overall profitability by 153.7% to $24.4 million. The credit union’s net worth ratio also improved to 9.03% fueled by the credit union opening more than 11,000 new checking accounts and 1,300 mortgages.