Credit union officials hope that Project ZIP Code will increase their clout with Beacon Hill legislators by better documenting where their members are based.

Credit unions have always had grassroots pull. Drawing on that, national and local credit union associations are concentrating on “Nine Steps to Political Effectiveness,” a campaign to improve lobbying effectiveness. As part of that plan, Project ZIP Code was recently launched in Massachusetts and officials hope it will result in increased influence for the industry in political circles.

The project will gather specific geographic information about credit union members and match that with legislative districts on a state and federal level. The program incorporates safeguards to preserve the privacy of individuals whose information is being used. The results will enable associations and credit unions to better represent, pinpoint and document correlations between their members and the areas served by politicians.

According to Massachusetts Credit Union League President Daniel F. Egan Jr., the national project was conceived in 1997 during a campaign to target membership communications with Congress. It was designed as a tool to help the league fight for passage of the Credit Union Membership Access Act of 1998.

“At that time we were putting together our grassroots communication and realized we didn’t have a good way of determining how many credit union members there were in each congressional district or each state senate or representative district,” said Egan.

During that campaign, credit unions shipped anonymous address data to a central location for processing, according to an informational brochure handed out to MCUL members. The project was both time-consuming, expensive and unwieldy. It was quickly determined by members of the Credit Union National Association that a new process would be needed.

“The ZIP code matching data has been out there for years, any number of vendors sell it,” said Richard Gose, vice president of political affairs at CUNA. The data is put on a disk which can be run against a database to match it directly to legislative districts,” he said.

“The value of this information lies in the fact that it is not limited by the main office or branch locations of a credit union, but rather based upon the location of credit union members,” according to the brochure.

All data is encrypted and housed on individual credit union databases. No information that would identify individual credit union members is revealed.

“This has been about two-and-a-half years in the making to find a way to bring some process to it where the onus is not on the credit unions [and] it’s not on us; it’s a simple procedure that protects, above all, member privacy,” said Gose of the project’s current form.

Beta testing was recently completed in six pilot states and Texas is the first state to completely roll out the project.

“We’re [Massachusetts] just beginning the campaign of having each credit union put it onto their membership base to generate the numbers to give us accurate readings in each of those districts,” said Egan.

‘Powerful’ Numbers

The results reached in California, another state piloting the program, were startling. “They determined in California that the credit union with the largest number of members in the state was actually Navy Federal Credit Union, which is based in Virginia,” said Egan. He anticipates finding similar results in the Bay State. “We currently claim [more than 2 million] credit union members in Massachusetts but we think there may be as many as half a million more who are members of out-of-state credit unions that we’re not currently tracking,” he said.

That figure likely would include military and large corporation credit unions that have workers throughout the country. Proponents of the process said it’s important to track the actual numbers for a many reasons.

“All we hope to do is to be able to show members of the state legislatures, of Congress, how many members there are in their districts. They care about that,” said Gose. Additionally, a candidate who visits a particular credit union can gauge how many constituents within his district may receive a credit union newsletter that covers his visit.

It may also help in educating credit union members on a particular subject, Egan said. “For instance, if it’s an out-of-state credit union and we know that that out-of-state credit union has 100,000 members in Massachusetts, then we’re going to ask that credit union to send something out to those Massachusetts members on the issue we’re lobbying,” and thereby increase the number of constituents calling or writing to their legislators, Egan said.

“It’s very powerful to go to a legislator and say, ‘Look, there are 100,000 people in your area and I have 3,000 customers in that area. I’ve got 3 percent penetration,'” said Jon Winslow, market director with Troy, N.Y.-based MapInfo, a provider of demographic and purchase-behavior information for businesses.

Winslow said the financial services sector is better suited to capturing demographic information than other industries, such as restaurants.

“Banks in general are keeping information on their depositors for CRA [Community Reinvestment Act] purposes, for general marketing purposes and most of that data would be captured. The technology for visualizing that graphically is already out there and very easy to use,” he said.

Before the current project, said Gose, ZIP codes could only reveal blocks of information and could not be matched specifically to legislative districts. “A congressional district could have hundreds of ZIP codes, many of which are split between districts, especially when you get into the state legislative districts,” said Gose. The current technology can match address locations plus ZIP codes within districts.

“This is part of a comprehensive plan for us to activate our true grassroots ability, which we have done in the past but not to as complete an extent. We’re hoping through this … we’ll have a more effective and hopefully more productive grassroots lobbying effort on both the state and federal level,” said Egan.

The MCUL hopes to complete the project within six months but must wait until legislative redistricting is complete, as will the majority of other states. Districts matched in the current project are from the 107th Congress at the federal level, said Gose. A new disk will be issued in January 2003 with the districts from the 108th Congress and state legislatures. Those will be updated quarterly or semi-annually to reflect changes such as retirement or death.

“I think this is a useful tool. I think it’s simple and credit unions will find this very helpful when dealing with legislators and local officials. It shows a level of sophistication on their part that is important to convey,” said Gose.

According to Winslow, there are a number of other uses for which the enhanced demographic information can be used. But it wasn’t the intent of the original project.

“We designed this purely for the political functionality of it. If there are alternative uses discovered for this, that will be done through the credit unions through trial and error,” said Gose.

Using the information to understand where your customers are coming from may allow credit unions to make better placements of ATMs and branches and assist with targeted marketing campaigns, said Winslow.