During this year of economic uncertainty, many individuals are looking for a more personalized, human-centered approach to banking. But due to the COVID pandemic and several banks collapsing, consumers are often confused about which institution they can trust. While there are only around 6,000 credit unions in the US, they have become an attractive option for small business owners and individuals who desire a more transparent and genuine connection with their financial advisors. Both traditional banks and credit unions boast separate perks that may be appealing for future members, but the Northwest Federal Credit Union is working very hard to differentiate themselves from traditional competitors. Whether that be through releasing their Northwest Rewards Visa® program that offers members exclusive benefits or by giving back to their local communities.

Personalized Service, Rewards Cards, and Paycheck Protection
Personalized Service, Rewards Cards, and Paycheck Protection Plans: How Credit Unions Are Beating Banks Pixabay

The Northwest Rewards Visa® program was launched at the beginning of June and allows members using their rewards credit card to receive two points for every $1 spent. This generous framework is accompanied by a no cap limit for the amount of points possible and zero annual fees. Traditional banks don't offer similar perks, but because NWFCU is a credit union, they can deliver a unique set of benefits.

Within 90 days of opening the rewards card, individuals can also receive 15,000 bonus points if they spend $2,000 within that same time period. These points can be redeemed in several ways such as cashback, travel, gift cards, and a "pay with points" option. Members of this program will gain access to bonus points via new loans, a fraud prevention app, and contactless payment capabilities. The main goal in this program is to better serve their members by enhancing convenience and personalized features available. The federally insured organization also hopes to educate younger demographics about the positives of choosing a credit union as their first financial institution.

NWFCU found their rewards program an important development for their organization because the benefits would satisfy what members were hoping for and that is their primary mission. This methodology directly aligns with one of the main differences between credit unions and banks.

Since credit unions are nonprofit organizations owned by members, their business model functions upon pleasing their customer base. Alternatively, commercial banks function as for-profit institutions that must adhere to shareholders' desires. This obligation makes practices inflexible to account holders and their needs, which means they often employ a 'one size fits all' model.

Another notable difference between credit unions and banks lies within the fine print. Credit unions strive to be more transparent with their members because they are known for accommodating all financial needs, whether that be establishing a child's first account or crafting a retirement plan. Banks are less flexible when it comes to their policies because they are often national corporations unlike credit unions which are much more local. For example, Northwest Federal Credit Union only operates branches in the North Virginia, Maryland and Washington, DC area.

Being a member of a credit union is known to come with many financial benefits too. According to the US Chamber of Commerce, credit unions offer lower interest rates on loans and less fees compared to traditional banks. Credit unions frequently waive membership fees and have no minimum balance requirements for businesses. This makes them a reliable option for new business owners or individuals seeking an organization that wants to understand them past their financial status. Northwest Federal Credit Union is committed to offering this treatment to all of their account holders. The company itself was founded in 1947 upon the principles of providing quality customer service. Current CEO Jeff Bentley says these values stem from his first working experience, which took place in a full service gas station. Bentley was amazed by the difference between gas stations that offered customers the luxury of full service assistance versus the companies that didn't. From this observation, Bentley decided to enter the finance field and soon gravitated towards credit unions because of their focus on forming strong customer relationships.

To this day, Northwest Federal maintains strong DEI values not only because they find it crucial for a successful business, but also because their care for their employees translates into how they care for their members. NWFCU provides college scholarships to underserved highschool students, donates to local charities, and encourages employees to give back by offering paid volunteer hours. These initiatives are at the core of what Northwest Federal values and they will use every opportunity, within their branches and in the community, to show their commitment to supporting members.

"By encouraging volunteerism as a mindset for every employee with 24 paid volunteer hours, Northwest Federal has achieved many great things within our community. We distributed over 500 coats to Herndon Middle School this year and to date, we have awarded $1.79 million to local scholarship recipients. Within our branches, we have participated in the Paycheck Protection Program during the pandemic and issued significantly more small-dollar loans than banks, funding approximately 3,300 loans totaling nearly $179 million to help members keep their businesses up and running. These few examples can reflect how everything Northwest does is for our members throughout the various phases of their financial journey," says CEO Jeff Bentley.