I steered Currency away from credit union naming and branding about four years ago, moving instead into offering our managed marketing programs. This move allowed us to get out of our own geography and to have a deeper impact. Because of this decision, I tend to keep my mouth shut on naming and branding, but I had a call last week from a freelance writer who was putting together an article on the growing trend of Canadian credit unions dropping "Credit Union" from their name.
He wanted my thoughts on the trend.
I didn't even have to think about it – I immediately said that it's a huge mistake. Because of all of the merger activity across Canada, many credit unions have renamed or at least revisited their branding in the past decade. Many have turned in their city or regional names for more high tech "Star Trek" sounding names. Nine of the 20 largest credit unions in Canada have dropped "Credit Union" from their logo and how they answer the phone.
From my experience and observations, the credit union system (movement? industry?) in Canada is about 10 to 20 years ahead of the US system in terms of consolidation. For perspective, more than 50% of US credit unions have less than $25 million in assets under administration, compared to just a handful of credit unions left in Canada with less than $25 million.
In my own backyard – British Columbia (BC) – credit unions are extremely competitive with one another. I live in a small city of 80,000 people and there is a street corner where I can see branches of BC's four largest credit unions. All of these credit unions are the product of multiple mergers: Vancity ($15.7B), Coast Capital Savings ($11.1B), Envision Financial ($5.4B) and Prospera Credit Union ($2.1B).
I get the rationale behind these renaming decisions. If you are called City A Credit Union and you open a branch in City B, your name is no longer relevant. What I don't get is the trend to monkey with the modifier "Credit Union." It is short-sighted and aimed at the wrong target. In an attempt to differentiate from other credit unions, the largest credit unions in Canada are systematically dismantling the credit union brand. Yet, in the meantime, the system is pouring lots of money into campaigns to raise awareness of credit unions as a whole. Ironically, the largest contributors to these cooperative campaigns are the large credit unions that don't call themselves credit unions!
I get that adding "Credit Union" to your business name makes it long. I get that "Credit Union" is a funny name and lacks awareness. But what the heck is a "Financial" or a "Savings?"
Perhaps this is an isolated Canadian trend, but with credit union merger and rebranding activity ratcheting up worldwide, I can see a day when most large credit unions drop "Credit Union" from their name. This makes no sense to me. What do you think?