MONEY, MONEY, MONEY! WORKBOOK
L&N FEDERAL CREDIT UNION

Credit Unions

What is a Credit Union?

Credit unions are known as not-for-profit financial cooperatives. While credit unions resemble other financial institutions in many ways, there are three important characteristics that distinguish them. Credit unions are:

  • Member owned
  • A credit union is owned by its members, who elect its leadership (Board of Directors). The Board of Directors serves on a voluntary basis.
  • Each member owns one share of the credit union regardless of how many accounts he/she has or how much is on deposit.
  • Not for profit
  • Earnings are returned, after operating expenses are deducted, to members in the form of higher earnings on their deposits (dividends), lower loan rates (interest), and additional products and services.
  • Financial cooperatives
  • Members pool their money (shares) so that the credit union can make loans and provide other financial services to the membership.

How does the credit union make money?

The credit union is both a borrower and a lender. The credit union borrows money from its members via their deposits. The credit union pays its members in the form of dividends for their deposits. The credit union earns money by investing the member’s deposits and by making loans to members. The credit union’s net income comes from the difference between what the credit union pays in interest on deposits and earns from investing and lending deposits.

How are you eligible to join a credit union?

Depending on the individual credit union, there can be three ways a person can be eligible to join a credit union. Those ways are: immediate family member of an existing member, live in the same household as an existing member, or work for an employer that offers credit union membership as a benefit. However, L&N is different. L&N is a community chartered credit union meaning that if you live, work, worship, go to school, or belong to a legal entity in certain counties you are eligible to join the credit union. Our counties include: Jefferson, Oldham, Shelby, Spencer, Trimble, Henry, Bullitt, Laurel, Pulaski, Rockcastle, Whitley, or Knox counties in Kentucky or Clark or Floyd counties in Indiana.

Credit Unions vs. Banks

How are credit unions unique from other financial institutions?

Credit Union / Bank
Who Owns It?
Who runs the Institution?
Who Does This Institution Serve?
What Does It Do With Any Additional Income?
What Are Its Patrons Called?
What Is Its Purpose?

Job Titles & Duties

Branch Operations Officer (BOO)

Market the CU in their designated area by attending meetings, dinner, and functions. To improve the Credit Union's competitive position, consistent with its mission, within its established communities while supervising the operations of a remote branch facility. Increase member penetration and use of credit union services among their established community area. Be available to coordinate and/or attend various community functions for the purpose of representing the credit union to the community.

Branch Operations Manager (BOM)

The BOM will supervise the daily operations of a remote branch facility including Member Service operations, Lending, and other operational functions while working closely with the Branch Operations Officer.

MDO Coordinator (Member Development Officer)

MDO Coordinator is to monitor and assist the Branch staff with questions and be an overall coordinator between the staff, the Branch Manager and Branch Supervisor. With the continued effort to develop the entire branch staff and promote the retail sales environment the Member Development Coordinator would assist branch management on a daily basis. To assist with scheduling and various branch responsibilities that will allow the management in the branches to continue with their duties overseeing the branch operations.

Member Development Officer (MDO)

Work to develop deeper relationships with new and existing members of the credit union. Promoting the sales environment with members and staff in regards to member development throughout the branch. Provide routine information concerning services to new and existing members. Open new member service accounts; handle any questions or problems in regards to member service issues while looking for cross-sell opportunities to better service the members. Direct member to appropriate MDO for lending needs when situations warrant lending processing and or approval

Training Mentor

Assist new employees transitioning from classroom to the job, Assess new & current employee training needs, Connect employee to resources of the daily branch operations, Act as a liaison between trainee and training department, Assist trainee/manager in completing 30-60-90 day new employee evaluations, Solicit feedback from trainee.

Member Service Representative (MSR)

MSR will assist members with their financial transactions, involving paying and receiving cash and other negotiable instruments. MSR may be asked to travel to other offices or seminars, which might require an overnight stay. May need to sit or stand for long periods of time while processing member needs. All employees are expected to be neat, clean and dress in a professional manner.

Savings Accounts

Regular Savings

Features / Benefits
$5 minimum balance / Establishes and assures continuing membership
Membership in the credit union / Allows access to all credit union’s benefits, Convenient
Competitive dividend rate / Earn money
Simple interest earned daily and paid quarterly / Earn money
Statements mailed quarterly / Easy, Convenient
Payroll deduction/direct deposit available / Convenient, Security, Peace of mind
Funds federally insured up to $100,000 / Security, Peace of mind

Terms and Conditions

  • Must be eligible for membership through community charter or immediate family member

Opportunity to explain product

  • Eligible individual inquires about joining the credit union
  • Eligible individual, not currently a member, inquires about opening another credit union account or service

Captain Cash

Features / Benefits
Minors 12 years old and younger / Help children to become comfortable with banking transaction
Need $5 to open account / Saves money
Simple interest earned daily and paid quarterly / Earn money
There are mailings and planned events just for them / Helps them to become involved with banking practices
Statements mailed quarterly / Easy, Convenient

Opportunity to explain product

  • A parent wants to introduce their children to financial institutions
  • A parent wants to open their child a savings account
  • A parent inquires as to how they can get their child excited about saving money

Christmas, Vacation, & Special Savings

Features / Benefits
Competitive dividend rate / Earn money
Simple interest earned daily and paid quarterly / Earn money
Statements mailed quarterly / Easy, Convenient
Payroll deduction/direct deposit available / Convenient, Security, Peace of mind
Available for any special need / Convenient

Terms and Conditions

  • Must have regular share account with $5 balance
  • $5.00 to open
  • $0.01 to keep open

Opportunity to explain product

  • Mention of travel plans, taxes, weddings, insurance, children’s account, or special occasion
  • Declined for loan to payoff holiday bills or vacation
  • Had checks returned NSF or late loan payments and gave the holiday season as an excuse

Checking Accounts

CareFREE Checking

Features / Benefits
No minimum balance / Save money
No monthly fee / Save money
Unlimited check writing / Save money, Convenient
Free Internet access / Save money, Convenient
Free Daisy / Convenient
Free Debit Card / Save money, Convenient
Free ATM Card / Save money, Convenient
Free unlimited ATM access at all L&N machines and no surcharge at all Alliance One machines / Save money, Convenient

Opportunity to explain product

  • Member says that they do not keep a high balance in their account however; they would like to open a checking account.
  • Member does not like to pay the $3 household maintenance fee. Mention that if a CareFREE checking account was opened that fee could be avoided in the future.
  • Member is looking for a basic checking account.
  • Complain of high fees on their checking account at another institution
  • Opening a new savings account
  • Large cash withdrawal on payday (to pay bills or deposit to another institution)
  • Deposits or cashes personal their personal check from another institution
  • Pays loan with a personal check from another institution

Gold Checking

Features / Benefits
$2000 minimum balance / Save money
No monthly fee / Save money
Earns dividends (if balance drops below $2000, $10/month service charge, but still earns dividends) / Earn money
Unlimited check writing / Save money, Convenient
Free Internet access / Save money, Convenient
Free Daisy / Convenient
Free Debit Card / Save money, Convenient
Free ATM Card / Save money, Convenient
Free unlimited ATM access at all L&N machines and no surcharge at all Alliance One machines / Save money, Convenient

Opportunity to explain product

  • Member keeps a $2000 balance in their checking account. Tell them that if they upgraded to a Gold checking account they could earn dividends on their money.
  • Large cash withdrawal on payday (to pay bills or deposit to another institution)
  • Deposits or cashes personal their personal check from another institution
  • Pays loan with a personal check from another institution

Premium Checking

Must have 3 or more services (including checking) and an average aggregate monthly balance of $40,000 or greater

Features / Benefits
No minimum balance / Save money
No monthly fee / Save money
Earns dividends / Earn money
Bonuses on loan and certificate rates / Earn money, Save money
Unlimited check writing / Save money, Convenient
Free checks (basic style) / Save money
Free Debit card / Save money
Free official checks / Save money
Free stop payments / Save money
Free Money Orders / Save money, Convenient
Free Internet access / Save money, Convenient
Free Daisy / Convenient
Free Debit Card / Save money, Convenient
Free ATM Card / Save money, Convenient
Free unlimited ATM access at all L&N machines and no surcharge at all Alliance One machines / Save money, Convenient

Opportunity to explain product

  • Member has 3 services with the Credit Union and an average aggregate monthly balance of $40,000 or greater.
  • A member is placing a check order with you. Mention that if they upgraded to Premium checking account they could receive basic style checks for free.
  • A member is buying a money order, official check, stop payment or certified check from you. Mention that if they upgraded to a Premium checking account they could receive these services for free.
  • Member is opening a certificate
  • Large cash withdrawal on payday (to pay bills or deposit to another institution)
  • Deposits or cashes personal their personal check from another institution
  • Pays loan with a personal check from another institution

Preferred Checking

(For members 50 years and older)

Features / Benefits
No minimum balance / Save money
No monthly fee / Save money
Unlimited check writing / Save money, Convenient
Free checks (basic style) / Save money
Free Daisy / Convenient
Free Debit card / Convenient, Save money
Free ATM card / Convenient
Free Internet access / Save money, Convenient
Free unlimited ATM access at all L&N machines and no surcharge at all Alliance One machines / Save money, Convenient

Opportunity to explain product

  • You notice on a members account that they are 50 plus years old.
  • A member over 50 years old is placing a check order with you. Mention that if they upgraded to Preferred checking account they could receive basic style checks for free.
  • Large cash withdrawal on payday (to pay bills or deposit to another institution)
  • Deposits or cashes personal their personal check from another institution
  • Pays loan with a personal check from another institution

Superior Checking

(For members 50 years and older)

Features / Benefits
No monthly fee / Save money
Earns dividends (if balance drops below $2000, $10/month service charge, but still earns dividends) / Earn money
Free checks (basic style) / Save money
Unlimited check writing / Save money, Convenient
Free money orders / Save money
Free official checks / Save money
Free certified checks / Save money
Free Internet access / Save money, Convenient
Free Daisy / Convenient
Free Debit card / Convenient, Save money
Free ATM card / Save money, Convenient
Free unlimited ATM access at all L&N machines and no surcharge at all Alliance One machines / Save money, Convenient

Opportunity to explain product

  • You notice on a members account that they are 50 plus years old.
  • A member over 50 years old is placing a check order with you. Mention that if they upgraded to Preferred checking account they could receive basic style checks for free.
  • A member over 50 years old is buying a money order, official check, or certified check from you. Mention that if they upgraded to Superior checking account they could receive these services for free.
  • Large cash withdrawal on payday (to pay bills or deposit to another institution)
  • Deposits or cashes personal their personal check from another institution
  • Pays loan with a personal check from another institution

Terms and Conditions of All Checking Accounts

  • $0 to open, just deposit enough to cover the cost of checks
  • $20 fee if account is closed within 6 months of opening
  • If account remains inactive for 6 months, $5/month service fee will be assessed until balance reaches zero and is closed by the credit union

***Only one Preferred, Superior, Gold, or Premium Checking account per membership. If the member has more than one checking account, they must choose which account to make a “special” checking and all others must be CareFREE.

Share Certificate (CD)

Features

/ Benefits
Variety of terms (91 days to 5 years) / Able to choose term that best meets investment needs
Rates change weekly (based on market conditions) / Earn money
Dividends compounded daily and paid quarterly or monthly (91 day and 6 month earn simple interest paid at maturity) / Earn money
Statements mailed quarterly / Convenient

Terms and Conditions

  • $1000 minimum balance (1-5 year terms)
  • $2500 minimum balance (91 day, 6 month, 15 month, 18 month terms)
  • $500 minimum balance (Youth Certificate – for members under 18)
  • Early withdrawal penalty for certificates with maturity of 1 year or less – Dividends earned since date of issuance or 90 days dividends (the lesser of the two)
  • Early withdrawal penalty for certificates with maturity greater than 1 year – Dividends earned since the date of issuance or 180 days dividends (the lesser of the two)
  • Monthly dividends available for certificates with 1 year or less term
  • $10,000 minimum balance to receive monthly dividends for all certificates with term greater than 1 year
  • Automatically “rolls over” into the same term certificate at the current rate
  • The member can close the certificate within 10 days of maturity without penalty
  • 10-day notice when CD is reaching maturity
  • 10-day grace period once CD has matured

Opportunity to explain product

  • Making a large deposit into a savings account
  • Complains about dividend rate on regular share account
  • Mention of investment with another institution ready to mature
  • Asks if we can pay dividends monthly on share account

Mention the need for supplemental income from dividends from savings

Auto Financing

Traditional Auto Loan

Features / Benefits
Rates are competitive and our terms plentiful / Save money, Convenient
Rates and Terms are based upon the Model Year of the vehicle being purchased and the member's credit history / Save money, Convenient
We generally finance up to the retail value of a vehicle as quoted in the N.A.D.A. Value Guide plus any taxes or transfer fees associated with the vehicle / Save money, Convenient
We offer Payment Protection Plan for eligible members, Mechanical Breakdown Coverage, and Guaranteed Auto Protection on all eligible auto loans / Security, Peace of Mind

Opportunity to explain product

  • Member mentions to you that they are shopping around for a new car and need a loan

Home Financing

First Time Home Buyer Program

Features / Benefits
Our First-Time Home Buyers program will take you through the sequence, step-by-step, and provide useful assistance for every aspect of the home-buying process / Convenient, Easy
This program has no discount points, no origination fee, reduced closing fees, and requires an Escrow account to pay for items such as property taxes and insurance / Save money
We can finance up to 100% of your purchase up to $125,000 / Convenient
Available in Fixed Rate and Adjustable Rate versions that allow you to choose the plan that fits you like a glove / Affordable, Convenient
We offer terms up to 30 years / Convenient

First Mortgage

Features / Benefits
Competitive rates and terms / Save money, Flexibility
First Mortgage plans include our Fixed Rate First Mortgage Loan, Adjustable Rate First Mortgage Loan, or our Balloon Mortgage Loan / Flexibility, Options
Plans include 10, 15, 20, and 30 year terms / Flexibility, Options

Second Mortgages

Features / Benefits
Great for consolidating debt, making home repairs, and many other purposes / Save money, Flexibility, Convenient
Can get a Second Mortgage at a great fixed rate for up to 15 years / Convenient, Save money
Special rate offered to members who take advantage of our 5-year term Second Mortgage / Convenient, Save money
We will loan up to 100% of the appraised value of your home, you can accomplish a lot. In addition to these great features, your Second Mortgage loan payment does not change / Convenient, Affordable, Secure

Home Improvement Loan

Features / Benefits
Home Improvement loans can be processed in as little as 1 week. As a result, you could have your money in as little as 2 weeks / Quick, Convenient, Save money
This one-time loan offers low rates and flexible terms, providing you convenience and affordability you won't find anywhere else / Convenient, Saves Time, Easy, Affordable
Home Improvement loans feature a maximum repayment period of 12 years / Convenient, Saves Time, Easy, Affordable

Home Equity Line-of-Credit