Time for a Credit Union Name Change?

Idaho State University Federal Credit Union (ISU FCU) was founded in 1952 to serve ISU employees. Over the years, ISU FCU began to add many other groups to its field-of-membership (FOM), including ISU students/alumni, regional school districts, The College of Eastern Idaho, employees of some area clinics/hospitals/dental offices, plus employees of some regional cities and retail. By 2020, ISU FCU had about $280 million in assets operated 7 branches in 4 cities in eastern Idaho. As with most credit unions, ISU FCU sought to grow to remain viable and to better serve its members. Growth would allow ISU FCU to capture economies of scale, reducing average cost of operation. This would allow ISU FCU to offer members better interest rates and improve products/services while becoming financially stronger by with having a more diverse membership. ISU FCU was expanding its membership groups overtime and opened branches outside Pocatello, where both its home office and ISU are located. However, with Idaho State University (ISU) in its credit union name, it became increasingly apparent that many potential members thought that they needed to be an ISU employee or student to be eligible to join ISU FCU. This was a common problem for many other credit unions (CUs) with a single employer group in its name, but with multiple groups eligible to join. As many CUs were changing their names, an April 2020 Credit Union Times article cited Brain Wringer stating that “most of the name changes start because there’s a perception – and often the reality – that the biggest obstacle to growth is an old name that ties them to an old segment” (Orem, 2020). In early 2021, ISU FCU changed their name to Lookout Credit Union. This case examines arguments for and against this name change. This case is appropriate for use in a money and banking, depository institution management, or managerial economics course at the undergraduate level. It could also be useful in certificate and training programs for financial professionals.