Article reprinted from Pymnts.com (June 22, 2018)
Law enforcement faces a variety of career-related concerns, from staying financially afloat during police academy training to confronting the risks of on-the-job personal injury. As such, many find that their work lives and monetary concerns may not be neatly answered by the offerings of civilian-focused financial institutions (FIs).
FIs that cater to police officers’ financial needs must tailor their services to accommodate the population’s unique monetary stresses and workstyle patterns. In a recent interview, Jim Bedinger — division president of the National Police Credit Union (NPCU), part of the Chicago Patrolmen’s Federal Credit Union (CPDFCU) — explained both what it takes to serve a law enforcement membership and how credit unions (CUs) are working to remain competitive with major banks.
Loaning To The Law
Loans can provide a critical backup for law enforcement members. In fact, the need for this financial solution often arises before they are even officially sworn in as officers.While a police department typically supplies some or all of the necessary equipment to those they hire, some recruits have no such luck when they enter the academy.
“Not every department actually supplies [recruits] with the equipment and everything needed to go through the training academy,” Bedinger said. “[Even] for departments that may [provide the uniform], it’s still an expensive time — and a tough time.”
Cadets may be required to purchase sweatsuits printed with their names, handcuffs, a gun and mace. These and other work-related expenses could set them back $3,000 or more, and come on top of any student debt amassed from the college coursework required by many departments.
NPCU offers pre-approved loans for these equipment needs, regardless of members’ credit scores. Recruits are not guaranteed to pass the academy, but the CU has found it to be a safe offering, Bedinger said — and the loans have an added benefit of helping the credit union turn cadets into lifelong members as they start their careers. NPCU also provides student debt consolidation, pausing payments until cadets are sworn in, which can lower barriers to entering the field.
“Some departments are having trouble recruiting people because it is a high-stress, high-demand job,” Bedinger said. “Knowing that we have deferred loans available helps with recruitment.”
Serving Families And Lodges
In addition to personal finance issues, police officers face challenges related to housing and their children’s education. A notable segment sends their children to private schools for many reasons, necessitating NPCU to offer children’s education loans. These reasons including job-related residency requirements that prevent the family from moving to a preferred school district, as well as concerns that children may be targeted if they are known to be related to a local police officer, among others.
Serving officers also requires acknowledging the high risks of the job. NPCU will soon offer a loan protection insurance policy, underwritten by AmTrust Financial, which covers an officers’ qualifying loans until retirement. The policy will pay off all loans with the credit union for up to $850,000 should the officer be killed in the line of duty.
Other police-specific offerings include commercial checking accounts for lodges — or chapters — of the Fraternal Order of Police (FOP), a trade organization that advocates for law enforcement needs. These accounts are designed for chapter officers, including cost-efficient and fee-less processing of the checks, as well as cash collected for members’ dues. NPCU has also seen strong demand for a card program for lodge officers who travel frequently for their duties, Bedinger added.
Expanding Access And Foiling Fraud
As Bedinger sees it, NPCU has some advantages when it comes to competing with larger banks. The CU’s mission-specific focus enables it to appeal to and win over new police members, offering a guarantee that their specific financial needs are understood and that board members are focused only on them — not on shareholder profits.
Like other similarly sized credit unions, NPCU struggles with a limited advertising budget when trying to raise its visibility. In addition, competing against larger banks with nationwide presences creates a greater need to embrace new strategies, like the ability to enable members to easily access services from outside their hometowns or states.
To level the playing field, and keep its members happy, NPCU has turned to technology and collaboration with like-minded CUs. This includes services like shared branching, which enables members to receive service at any participating credit union branch in the nation. The CU has also tapped into a surcharge-free ATM network, including ATMs at convenience stores, grocery stores and other often-frequented locations.
Its police officer membership tends to be more resistant to adopting new tech, Bedinger noted, but mobile banking, remote deposit capture and other digital solutions have helped NPCU expand access to its services.
“With technology, if you’re a small financial institution, like many credit unions are, it’s an equalizer,” he said. “With the shared branching network and things like that, we can compete with [bigger FIs] for location … and I think we’ll be able to compete with them on the technology side of things, too.”
Law enforcement may be charged with protecting civilians in the streets, but credit unions and similar organizations are seemingly well-positioned to protect officers’ financial lives — and offer tailored solutions, too.