Not surprisingly, the New Haven Telephone Employees Federal Credit Union was chartered in 1940 to serve telephone company employees and their families in the greater New Haven area. As its membership grew to 450 companies, the credit union moved to a community-based, state charter in 2002 and rebranded to Connex (pronounced “connects”) a year later.

The credit union’s service area was hit hard by the Great Recession in 2008; then it was slow to recover. Inner-city neighborhoods have been plagued with unemployment, blight, and a lack of access to basic services, such as grocery stores and banks. But Connex Credit Union ($896.8M, North Haven, CT) has stayed true to its commitment to the community.

Most of Connex’s 66,275 members are working-class families. The average share balance of $11,642 is more than 17% off the national average, and many new members are getting a debit card or taking out a loan for the first time in their lives. Despite these challenges, Connex is among the fastest-growing credit unions in the country — it has more than doubled in size in the past decade. As of June 30, 2022, its 12-month share growth (8.6%) and loan growth (18.4%) were among the top 8% of credit unions nationally.

“We have grown at a rapid pace consistently over the past decade, which has afforded us an increased opportunity to give back,” says Frank Mancini, who joined Connex in 2003 as CFO and became president and CEO 2012. “Now we’re wanting to do so in even bigger ways. We have a great team, and we want to make a difference. We are not shy about making this commitment.”

That commitment to giving back includes earning certification as a Community Development Financial Institution (CDFI), planning to make $30 million in loans available mostly to Black and Hispanic members during the next five years, carving out $5 million in charitable donation accounts to fund philanthropic giving, eliminating a significant amount of overdraft fees, offering credit-building products and financial education, participating in community and political advocacy, and dedicating an estimated 6,000 hours of volunteerism in the next five years.

Connex started most of those projects within the past year or so, and the credit union recently added a community development specialist to work with local partners to deepen relationships with aid groups. There’s an unmistakable sense of urgency in the way Connex is approaching community impact.

“We’re never going to be Bank of America with a billion dollars in loan funding,” Mancini says. “But we can make an impact on our community, and that’s meaningful to those folks who benefit from it.”

Serving The Underserved

The new programs build on things Connex has been doing for years. As far back as 2013, Connex was named New Haven’s No. 1 financial institution for serving the unbanked and underbanked, based on a Yale study on community impact commissioned by the City of New Haven. Connex also ranked as the best in products and services — well ahead of much larger banks that included Bank of America, Wells Fargo, and Chase.

In 2015, Mancini was asked to serve on the city’s Financial Empowerment Commission to take advantage of a grant awarded by the city Center for Financial Empowerment. He worked alongside community activists and heard stories of hardships in the city’s low-income neighborhoods.

Around that time, changes were occurring within Connex’s board of directors. A majority of the board members had served for 30 to 50 years and had reached retirement age. Three had moved out of state more than a decade earlier.

“We had to re-energize our board,” Mancini recalls.

The board discussed issues such as term limits, age limits, and residency requirements. During the next several years, the chairperson and two other members retired and moved to emeritus status to mentor the incoming directors.

“The board set up profiles of what they want in board members, we revisited the governance process, and by 2019, we went from an average board tenure of 30-plus years to an average tenure of three years,” Mancini says. “It was a big change. Now, a lot of the board members are somewhat new to the credit union space and somewhat new to financial services, but they have a desire to make a change.”

Like many, the younger board was profoundly moved by the events of 2020, including the death of George Floyd while in police custody in Minneapolis and the subsequent social unrest. Among the new board members was Annie Harper, a Yale researcher whose work focuses on the social determinants of mental health, and understanding how financial services and retail firms can better serve people with low incomes, mental illness, and incarceration histories. The board named Harper chair of its newly formed Social Justice Committee.

The board subsequently adopted a new mission statement, adding the words “communities” and “employees,” so it now reads, “Improving the financial wellbeing of our members, employees, and the communities we serve.”

According to Connex’s executive vice president and chief operating officer, Carl Casper, this was a significant change.

We now talk a lot more about the communities we serve. You get a greater sense that we’re not just here to serve the member in front of us. We’re here to serve the communities that we operate in.

Creating New Loan Opportunities

With the heightened focus on community impact, the board and management delayed the adoption of the 2022 budget so that it reflected actionable deliverables within the calendar year. A key component of that was CDFI certification. Upon approval, the credit union immediately applied for and hopes to receive a $1 million grant to supercharge its lending program later this year. Connex typically has a 100% to 105% loan-to-share ratio and periodically boosts share revenues through deposit specials to members, but the board wanted to make a bigger impact closing the wealth gap through home ownership. The CDFI grant will help underpin new loans to low- to moderate-income borrowers.

“The goal of the program is to fund $30 million in first mortgage, down payment assistance and rehabilitation loans to serve underserved — primarily Black and Hispanic members — in New Haven County over the next five years,” Mancini says. “We made our first loan in June despite not having received a grant. Our board was very desirous of us not waiting for the grant and asked us to make a commitment to make at least $1 million in loans this year, regardless of whether we received the grant.”

Another key strategy was to hire personnel dedicated to making an impact on the community and driving new loans. Lee Dupree joined Connex in April as the credit union’s first community development specialist. He brings more than 15 years of experience in working for nonprofits and human services groups, and he aims to connect Connex with the needs of the community.

“I’m getting to know the people in the community, making partners and relationships with different nonprofits and organizations that uplift the community, learning what their needs are, and then seeing what we can do to help,” Dupree says. “We’re here to help educate the community, break some of the traditional mindsets of the inner city, and teach them different ways to obtain wealth and build better lives.”

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While Dupree spreads the word about community impact programs, newly hired Katrina Goins has taken the reins as part-time community development loan representative. Goins, a veteran in community lending who previously worked for Neighborhood Housing Services of New Haven, identifies potential home mortgage candidates for the $30 million loan commitment.

“She’s an expert and has ties to community agencies that work with people who are looking to borrow from nontraditional lenders,” Casper says. “Our goal is to close the wealth gap, and this will get it started in a big way.”

Nontraditional mortgage lending means greater flexibility around debt-to-income and loan-to-value ratios, considering income from multiple people who will be living in the household, down payment assistance, and rehabilitation loans.

“If somebody is at 40% DTI, that loan might fly,” Casper says. “If loan to value is at 110%, given some circumstances, that one might fly, too. Every one of these loans is unique. They’re not simple. Otherwise, somebody else would do them.”

The credit union is committed to offering conventional mortgage rates for borrowers who qualify, regardless of what traditional risk scoring might say.

“We’re not interested in putting people into a bad situation with a loan they can’t pay back,” Casper says. “We have to be conscious of that for their safety. We want to work with the housing agencies in New Haven, and they will work with borrowers to help qualify them, and provide them with financial education. We’ll come in and supplement that education by the time they’ve made a decision on a particular property.”

Industry Advocacy

Another thrust of Connex is to advocate for reforms that will benefit low-income families and credit unions — at both the state and national levels. Connex serves on the Connecticut Credit Union League board and legislative committees and continues to support the BankOn Coalition, a locally led partnership of public officials, government agencies, financial institutions, and community organizations aimed at improving the financial stability of unbanked and underbanked communities.

Connex is actively lobbying at the state level to make financial literacy courses mandatory for high school graduation, although it continues to meet resistance from teachers and state lawmakers alike

“Not everybody goes to college or university or trade school; some people go directly to work, but they’re not being taught how to manage their financial lives,” says Louise Nestor, director of marketing at Connex. “Once they get past high school and even in college, they don’t always teach how to manage a bank account. What do credit scores mean? How do credit scores impact you? How to budget? These are some of the basics we provide through free seminars.”

Mancini also serves on the NAFCU board, which has been calling for resources from the Treasury Department to ensure grant dollars get out to these communities. Plus, it’s making a larger push to get government-sponsored enterprises to create a framework to buy back some CDFI assets, which would exponentially increase the values of the grants and the ability of CDFIs to put money out into the communities.

The Road Ahead

With more people shifting to remote work during the past two years, Connecticut has become an attractive alternative for a growing number of New York City residents. Housing prices have been climbing, and the Connecticut unemployment rate fell to 3.7% in July, although it remains higher in New Haven.

Thanks to higher home equity values and higher wages, Mancini says more people are paying down credit card debt and saving, but he worries about the continued impact of inflation and a possible recession on working families whose paychecks won’t stretch as far.

“If a recession actually hits – and it depends how deep it hits – the folks who are living from paycheck to paycheck will need a helping hand in the next couple of years,” the CEO says.

By the same token, Mancini is concerned about the impact inflation has on Connex’s own employees. An Amazon fulfillment center recently opened across the street and is putting pressure on wages for area employers. In the past two years, Connex has given employees pandemic bonuses or pay adjustments, and he says management is looking again to “make sure we keep paying our people appropriately.”

“We’re thrilled about the things we’re able to do,” Mancini says. “We’re energized and challenged by the fact we’ve got 150 people and 72 projects going on. Our people are tired, and we push our folks probably more than most. It’s a great credit union made up of committed individuals who come to work every day and get a lot done. I’m proud to lead an organization so focused on achieving our mission and vision.”

Despite the potential storm clouds, Mancini says the long-term outlook for Connex is bright.

“We’re going to be here for another 80 years,” he says. “We know there might be some hiccups with the economy, but we understand those are beyond our control. So, we try to position our balance sheet in a way that we can withstand short-term plays like this. We have a great lending engine. We’ve been able to sustain our earnings and sustain our growth without being restricted by it. In this business, the only way you can grow is to continue to earn.”

This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about Connex or dive into a decade of archives. Contact Callahan to learn about gaining access today.

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Banking On Values In A Crowded Montana Market
Clearwater Credit Union is growing rapidly by embracing values-based banking and characteristics of life unique to Big Sky Country.
By E.C. Harrison

Low Emissions, Big Impact
An emphasis on reducing its carbon footprint is just one part of Clearwater Credit Union’s multifaceted community-impact strategy.
By E.C. Harrison

Clearwater Credit Union: What’s In A Brand?
Clearwater Credit Union leaders look back on their credit union’s history and branding and reflect on the path that led to where they are today.
By E.C. Harrison

Clearwater Embraces Its CDFI Status
Leaders of the Montana cooperative discuss the importance of the credit union’s certification as a community development financial institution and how that status dovetails with the institution’s broader mission.
By E.C. Harrison

The post Anatomy Of Clearwater Credit Union appeared first on CreditUnions.com.

In stepped Clearwater Credit Union ($899M, Missoula, MT), which partnered with Climate Smart Missoula to partially fund the more efficient heat pumps, resulting in $5,000 annual savings in operating costs for the housing authority. Through that funding, Clearwater was able to count those energy savings to offset its own carbon footprint.
“We ended up supporting a local affordable-housing project, making it more efficient, saving money for the organization, and offsetting our greenhouse gas emissions for about two and a half years,” says Paul Herendeen, director of impact market development at Clearwater.

That, along with other projects in 2020, helped Clearwater meet its carbon-neutral goals for the year — one of the pillars for its values-based banking initiative. Most of Clearwater’s eight branches have solar panels on-site or have plans to install them.

Fighting climate change is one of the many ways Clearwater is focusing on ways to positively impact the community. Each year, the credit union donates 5% of its net income to charities, which amounted to $755,530 going to 151 nonprofit organizations in 2021. The credit union targets that philanthropy toward three areas: empowering people, building inclusive economies, and protecting the environment.

Programs supported by Clearwater include vocational training, housing assistance, credit building, transportation, affordable housing, community childcare, and economic development, just to name a few. According to Herendeen, it’s important that community organizations don’t have to spend a lot of time to access aid.

“We have a very simple application,” the impact director says. “We don’t ask for a lot of quantification of impact. We don’t target specific programs with the giving. We’re happy to support general operations and help people in our community who are doing good work.”

One of the credit union’s longstanding programs supports refugee resettlement. Since the 1970s, Missoula has welcomed refugees from all over the world, most recently from the Democratic Republic of Congo, Syria, and Afghanistan.

The credit union has also created lending programs to encourage investments in sustainability and affordable housing. For example, Clearwater’s solar loan program offers homeowners unsubsidized loans for solar panels for up to $30,000, with a 15-year term at 3.90% APR, along with no application or origination fees, and no pre-payment penalty. That program is gaining in popularity.

“We’re only about $25,000 away from hitting last year’s numbers for solar lending,” says Bill St John, senior vice president of consumer banking. “I like what we’re doing in that space. Our prices are low. We’re aggressive on term. We’re aggressive on amount. Borrowers are all homeowners. They’re conscious about the environment for the most part, and they’re all really strong borrowers.”

To support affordable housing, the credit union has expanded its business in the manufactured housing market, which makes up nearly 12% of the housing stock in Montana. With housing prices skyrocketing, manufactured housing parks have become prime candidates for redevelopment, which means residents could have the land sold right out from under them and face eviction.

Therefore, Clearwater is partnering with NeighborWorks Montana to finance resident-owned communities.

“When manufactured housing parks come up for sale, they can actually be purchased by everyone living there and owned cooperatively,” Herendeen says.

Herendeen adds that the credit union has received positive feedback from the community on its various impact programs, and it has continued to make gains in membership and deposit growth. A recent staff survey showed 90% of employees feel the credit union is on the right track.

“They said that they understood the mission, vision, and values, and felt the team is committed to putting those into practice,” Herendeen says. “Overall, the response has been overwhelmingly positive from our members, our community, and our staff.”

This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about Clearwater or dive into a decade of archives. Contact Callahan to learn about gaining access today.

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Top-Level Takeaways

• The SECU Foundation focuses on four key areas: education, health care, housing, and human services.
• Members fund the foundation via an opt-in $1 monthly maintenance fee. Membership donations to the foundation surpassed $18.2 million in 2021, and the foundation’s total assets were up to more than $53 million.

The world today bears little resemblance to 2004. Cell phones were only for calls and texting, social media was in its infancy, apps weren’t even on the horizon, and major world events that would shape the decades to come the election of Barack Obama, the Great Recession, the pandemic, and more were still unknown.

But 2004 witnessed the birth of a philanthropic organization that has had a profound impact on the lives of millions: the SECU Foundation from State Employees’ Credit Union ($51.7B, Raleigh, NC). And while the foundation and its impact have grown over the past 18 years, it has remained laser-focused on four key areas: education, health care, housing, and human services.

“Credit unions have historically been the ones that are boots on the ground and making a positive difference in our communities in a big way,” says Leigh Brady, SECU’s chief operating officer. “Our foundation formalizes our philanthropic efforts and our ability to make those big differences.”

Brady should know. Despite the recent retirements of several long-time SECU leaders, Brady has been with the credit union for more than three decades and was on hand for the foundation’s launch and formative years.

Early in the 2000s before the foundation’s inception, SECU frequently received funding requests from different organizations across the state. Although those requests came in fast and furious, recalls Brady, they were often small-dollar requests without a significant impact. The idea behind the foundation, launched under longtime CEO Jim Blaine (now retired), was to find a way for the credit union to make a significant impact in all corners of the state.

A key component of the foundation’s success was involving members from the outset. The credit union already required a $1 monthly maintenance fee for all checking accounts, but when the foundation launched, members had the opportunity to redirect that dollar toward the foundation. Today roughly 99% of all SECU checking account holders elect to fund the foundation. Membership donations to the foundation surpassed $18.2 million last year, a 5% increase over 2020. The foundation’s total assets were up 2.3% to more than $53 million.

TOTAL SHARE DRAFT ACCOUNTS AND ANNUAL GROWTH

STATE EMPLOYEES’ CREDIT UNION | DATA AS OF 12.31.21

The foundation does work in all 100 North Carolina counties, but some of its most widespread impact comes in the form of scholarships. Thanks in part to member contributions, more than 430 graduating seniors at public high schools in the state each receive a $10,000 scholarship. At the end of the academic year, advisory board members representing local branches present the awards to the recipients.

“Members are our advocates statewide,” says Jamie Applequist, SECU’s executive vice president and chief property officer, who spent more than two decades in the branch network, interacting with branches and advisory boards. “When you get them to participate and award those scholarships, [it’s clear] this is not solely from the foundation. It’s from the membership.”

Many projects the foundation has funded began as ideas generated by advisory board members, who come from a wide array of backgrounds and professions. These volunteers are a vital conduit to nonprofits throughout the state, and because they are connected with local agencies, they can help those groups understand some of the thinking that goes into the foundation’s grant-making decisions.

That kind of local guidance allows the foundation to be more impactful in its giving, says Applequist, since advisory board members in each market are more likely to understand a region’s specific needs than decision-makers further afield.

The advisory board strategy enables SECU to have a broader reach and better understanding of needs outside of North Carolina’s larger metropolitan areas. That’s beneficial because nonprofits in some communities outside of areas like the Triad or the Research Triangle often struggle with fundraising.

“We have members in all 100 counties who are funding the foundation, so it’s imperative that we look for creative ways to support folks in all regions,” says Jama Campbell, the foundation’s executive director.

It’s important to the foundation leaders that it’s doing delicate, maybe more complicated work and providing the same assistance to rural and remote communities.

“The advisory boards give us honest feedback, and there may be times when there might be some red flags,” Applequist says. “The worst thing we could have is a project that’s marred with controversy. I give our foundation staff a ton of credit because I can’t think of a time when there’s been any controversy over any of the projects that have come forward.”

Statewide Impact

The foundation has also raised awareness for the credit union. According to Brady, SECU did little to no marketing prior to the foundation’s launch. That began to change in 2005, with the opening of the first SECU Family House. The facility, located near UNC hospital in Chapel Hill, provides lodging, meals, support services, and more for families with loved ones in the hospital, allowing them to focus on caring for family members rather than worrying about the cost of a hotel when traveling for medical care. The building like its sister facilities is emblazoned with the credit union’s name and logo on the outside wall.

“This kind of replaced the marketing piece and filled that void,” Brady says.

Showcasing its name and charitable works in a high-profile way not only served to attract prospective members, it also established a common point of pride among existing members.

“Our members are able to see the impact in a large way that they themselves are making,” Brady adds.

Although the foundation’s work has always fallen within its four designated focus areas, it has made a greater effort in recent years to ensure funding is going toward projects that have the widest reach.

We’re not going to be funding the local high school’s scoreboard, Brady says. But we are making a huge impact in North Carolina.

Beginning around 2017, the foundation shifted its focus toward more programmatic funding with a direct impact on specific projects. Those efforts kicked into high gear as the pandemic began, when the foundation approved funding requests for everything from personal protective equipment to improving online access for physicians to meet virtually with patients, and more.

Another area the foundation’s board has focused on in recent years is understanding the need for organizational capacity building, and it has developed two different programs with that in mind. In many cases, explains Scott Southern, a vice president, director of grants administration with the foundation, organizations might seek foundation funding but may not be ready for it because of issues with their own sustainability, leadership, or other factors.

To address that, the foundation has worked with regional universities to help nonprofits build capacity so they can not only improve their performance but also prime themselves for eventual funding from the foundation or other sources. Those mission development grants have become a big part of the foundation’s work since they were launched four years ago. In one instance, the foundation provided a $40,000 capacity-building grant to a small nonprofit and paired it with a consultant who could help identify other potential opportunities. Within six months, that organization was able to tap into $8 million in government funds to support its work, Southern says.

“When your $40,000 investment creates an $8 million opportunity, that’s a powerful story to tell,” he says. “It really makes a significant impact for our members to see that.”

Touching More Lives Than Ever

As the foundation approaches its 20th anniversary and explores what additional impact it can make with its statewide reach, management is also looking back at the number of lives that have been changed since its launch.

“Part of the work at the foundation is to continue to engage with partners we’ve worked with to see how our dollars from two years ago or 10 years ago are still making an impact,” Campbell says. “How many folks are they serving? How many lives are they touching? That’s something we continue to look back at how has this organization been able to sustain that impact over time?”

One of the biggest changes has been a shift in how the foundation finds projects to fund. Rather than simply receiving letters of interest, we’re now going out and through the advice of our advisory boards and our board of directors our staff is searching for those most impactful projects. That’s been a major evolution in 20 years, she says.

Not every project the foundation takes on has been a home run, but even those less successful ventures have served as teachable moments. In-depth analysis of applicants’ financials are par for the course, along with ensuring the organization and its projects are operating sustainably. Brady says organizers have become particularly good at spotting red flags in the application process, and, overall, the group takes a more comprehensive approach to its vetting now than it did in the early years.

“This is not in any way a foundation where we’re just saying ‘yes’ and writing it on the back of a napkin,” she quips.

Part of what makes the foundation and its success so remarkable is the buy-in from members and the sense of having skin in the game. That likely wouldn’t be possible without the small monthly fee most members are happy to contribute.

“The $1 monthly maintenance fee is so representative of the cooperative movement because a dollar from you or me doesn’t mean much,” Brady says. “It’s $12 a year, and $12 a year from any one person is not going to fund anything. But when you do it as a cooperative, you can make an impact in a big way.”

This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about the SECU Foundation or dive into a decade of archives. Contact Callahan to learn about gaining access today.

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What A Difference A Dollar Makes
The SECU Foundation from North Carolina-based State Employees’ Credit Union has made a name for itself by homing in on key areas where it can have an impact across the state. The philanthropy’s biggest success, however, might be the buy-in it gets from members.
By Aaron Passman

How COVID-19 Pushed The SECU Foundation Out Of Its Comfort Zone
More targeted giving and other changes helped the foundation make a bigger difference in the lives of North Carolinians — especially those in rural and low-income communities. Aaron Passman

The post Anatomy Of SECU Foundation appeared first on CreditUnions.com.

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VSECU Eyes A Green Future In Vermont
Energy lending, community impact programs, medical cannabis banking, and more have helped VSECU cross $1 billion in assets as it reaches its 75th anniversary.
By E.C. Harrison

The Brave New World Of Green Lending
Energy efficiency loans, zero-carbon goals, underwriting, and strategic partnerships drive lending growth at VSECU.
By E.C. Harrison

Making A Community Impact In Vermont And Beyond
Member-directed giving, values-based programs, and the cooperative spirit all guide VSECU’s efforts to leave a positive impact on its community.
By E.C. Harrison

10 Ways VSECU Embraces Community Impact
From lending off the grid to feeding appetites and wallets and much more in between VSECU supports quality of life for members, business, and communities across the state of Vermont.
By E.C. Harrison

The COVID Crisis Then And Now
Inside VSECU’s pandemic response effort and remote working strategy
By E.C. Harrison

The Budding Cannabis Market In The Green Mountain State
After stepping up to serve medical marijuana dispensaries, VSECU is positioned to lead the state in banking services for an explosion in recreational sales.
By E.C. Harrison

The post Anatomy Of VSECU appeared first on CreditUnions.com.

Every year, Utah First requires front-line employees to complete 104 hours of training the equivalent of 13 eight-hour days.

“When we tell new hires that, their eyes get wide and their mouths hang open,” says Steve Fifield, the credit union’s vice president of corporate development. “They’re not sure how that’s going to happen.”

But through trainer-led sessions, subject matter expert presentations, and third-party modules, employees and Utah First work together to make it happen. Fifield and two human resources colleagues facilitate most of the training, which the credit union has dubbed Mission University in recognition of the larger purpose training serves.

Here, Fifield discusses Utah First’s training requirement, role-based organization, the expected evolution of the training program in the months ahead, and more.

Why does Utah First require front-line staff members to complete 104 hours of training per year?

Steve Fifield: Our mission is to be significant in the lives of our members. We do that by looking for ways to say yes, not no. We work hard to find the opportunity. It’s different And it can be hard.

How we communicate with our members is fluid based on what we see in their financial profiles, but it starts with our people. It takes an enormous amount of training to instill our philosophy and model in our team members.

Put simply, we’re helping them understand when to hit the brakes and when to hit the gas.

Do you organize training based on role, seniority, or something else?

SF: Our universal employees, who we call financial experts, progress from Level 1 when they are hired to Level 5 when they gain lending authority. Upon hiring, the employee works with their branch manager to create their own training program on their individual self-scheduled pace. The branch manager makes sure the employee stays on track and has access to the elements they need to progress.

Within each level there are about 50 modules, classes, or other elements employees must complete before they can advance to the next level.

What do those modules, classes, or other elements include?

SF: Some 15 to 20 are typically online training we offer through a third-party service. Most of those are regulatory focused.

The remaining 30 to 35 items include practical, hands-on learnings or work-related thresholds. How many new accounts have they opened? How many transactions have they processed? Are they offering products and services to our members? As part of this bucket,employees complete classes through our internal Mission University, where we hold classes, on WebEx currently, run by internal stakeholders every Wednesday morning and most Friday mornings.

What do Mission University classes entail?

SF: There are classes on any operation or topic imaginable: VISA credentials, payment systems, titles, bankruptcy, IRAs, trust accounts, business accounts, new accounts. Depending on the topic and employee’ s level, there are introductory and advanced classes. Business accounts and IRAs are like that.

We have classes on home equity loans, loan closing, fil maintenance, even how to write. If you want to be a lender, you’re going to write loan notes to give to the underwriter. Writing is important.

Is the training within Mission University all internal or do you also use third-party materials?

SF: Most of it is internal. We have subject matter experts who train on various topics. For example, well borrow someone from the commercial services department when it’s time to cover business accounts. We’ve done train-the-trainer classes as well, so our subject matter experts can maintain and improve their skills as facilitators and trainers over time.

What are the differences among the various levels your financial experts can attain?

SF: Everyone starts at Level 1, that’s the new hire level. In addition to their day-to-day duties, they complete 17 different online courses to get them up to speed on various regulations. The training at this level teller transactions, check scanning, check holds, check retrieval is geared toward the employee becoming an effective teller. Once they’re at that point, there’s another 10 to 15 online classes to complete, whether on new accounts or how to cross-sell a VISA card.

At Level 2, they start to do more with loans, more with new accounts like trust and business accounts.

At Level 3, they begin to learn more about our lending ratios. They start observing and conducting loan interviews, become involved in the loan closing process, familiarize themselves with the promissory note, and observe weekly loan interviews at thebranch.

That brings them to Level 4. Here, they wrap up their new accounts expertise, making sure they’re good with CDs, IRAs, MMAs, and every account type we offer. They have more classes on regulation and on writing. They complete loan interviews, submitloans for approval, and do some closing.

And at Level 5, they attain lending authority for the first time.

How long does it take someone to attain that Level 5 designation?

SF: It depends on the employee’s motivation and what experience they bring with them. We’ve had people move as fast as six months in a best-case scenario. Others require a little more time.

How do employees react to the amount of training required to advance?

SF: Once they get into it, they react favorably. We’re not going to leave them twisting in the wind, letting them figur out alone how to come up with 104 hours of training. From their first week of employment, we show them everysingle avenue of training that’s available to them.

They also understand this is a way to advance not only their individual skills but also their career with Utah First. That’s an important consideration as well.

How often do you add new training courses and why?

SF: Because we do things internally, we’re able to remain agile and offer trainings based on need. For example, if we start to see more VISA fraud, we’ll have our payments solution director add a training on fraud mitigation.

In fact, we invite every branch employee to every Mission University training session. Even if they’ve been before, the examples we use are current and there will be a relevance and newness that makes it different

How will you evolve training in the months and years ahead?

SF: We recently added a loan trainer who is spending one on- one time with employees specifically related to lending skills and topics.

Overall, however, although we might have different delivery methods or better technology to offer our training, we’ll continue to be nimble and agile on the subject matter we train on. When we see an opportunity to change, we’ll switch on a dime to offer what our employees need.

This interview has been edited and condensed.

This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about Utah First or dive into a decade of archives. Contact Callahan to learn about gaining access today.

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The Art Of Saying Yes
Utah First FCU tailors its products and services to a population accustomed to hearing no from other financial services providers.
By Erik Payne

Make It Work
Nine data points help explain where Utah First focuses.
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The Self-Sustaining Wheel Of Success
Lending to members with colorful credit helps Utah First extend its reach in local markets.
By Erik Payne

How Do You Measure A Year In Training?
Utah First requires front-line staff members to complete 104 hours of training every year. Third-party courses and the internally developed Mission University provide avenues for development.
By Erik Payne

The post Anatomy Of Utah First FCU appeared first on CreditUnions.com.

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1 Credit Union To Serve Them All
American 1 Credit Union provides essential financial products to a blue-collar membership. The mid-size Michigan cooperative aims to double in size in the next decade, so how will it change its operations to reach that goal?
By Erik Payne

How Does American 1 Make It Work?
Nine data points tell the story of a turbulent 2020.
By Erik Payne

The Driving Force Behind American 1’s Auto Lending
Nearly two-thirds of the credit union’s loans have four wheels. What are the keys to success for this mid-size Michigan cooperative?
By Erik Payne

Diversity Begins With Inclusivity At American 1
The mid-Michigan credit union is refining hiring practices and tapping employees to help build a workplace where people feel included and heard.
By Marc Rapport

The post Anatomy Of American 1 Credit Union appeared first on CreditUnions.com.

• American 1 holds 63% of its loan portfolio in autos that’s more than double the national average.

• Operations, programs, and adaptability all have helped the credit union become a first-choice auto lender in its market.

Take a look at the loan portfolio of American 1 Credit Union ($552.1M, Jackson, MI), and it’s clear the cooperative is laser-focused on consumer loans.

In the first quarter of 2021, the credit union held approximately 63% of its loan portfolio in autos the vast majority of that being used and 22% in credit cards. On the auto front, that’s 30 percentage points higher than the national average. Its credit card concentration bests the national average by 17 percentage points.

In a year when the pandemic complicated consumer lending, American 1 stood apart from the pack. Its exemplary auto loan performance, in particular, stems from a strategy many years in the making.

“We want to serve as many people as possible,” says Marla Sanford, vice president of marketing and communications. “That means doing smaller, faster loans. We can help more people without tying up our lending power for the long term.”

The credit union assumed a number of mortgages during two mergers in 2011. Other than those, however, American 1 doesn’t make mortgage loans. It doesn’t participate in business lending, either. Instead, the credit union has positioned itself as an everyday lender vying to provide three things: an auto loan, a credit card, and a checking account.

“We call ourselves the auto loan experts,” Sanford says. “We’re usually the institution members and non-members think about when they want an auto loan.”

Becoming a first-choice auto lender was not as simple as turning the ignition, however. The strategy required operational focus, a strong network of dealers, and a creative approach to sales.

Hustle For Autos

American 1’s average auto loan in the first quarter of 2021 was approximately $13,600. April 2021 data from Zillow shows the average home value in Jackson, MI, was nearly $150,000. Based on that data, the credit union could make slightly more than 10 auto loans for every one mortgage loan. Put another way, American 1 can serve more members via auto lending.

“If you have $100,000 to lend, you can serve one member with a mortgage or 10 with an auto loan,” says Janelle Merritt, vice president of community partnerships. “It’s our philosophy to allocate our dollars in a way that best serves every potential American 1 member.”

It’s also the credit union’s philosophy to avoid indirect auto lending altogether. Doing so allows American 1 to offer a lower rate rather than charge a higher rate to cover dealer incentives. In the first quarter, American 1’s medianloan rate for new and used auto loans was 1.99%. At Michigan credit unions, those rates were 3.47% and 4.61%, respectively.

In addition to lower rates, American 1’s direct lending strategy also provides better pricing transparency than indirect lending as well as offers the opportunity to talk to borrowers about their financial needs.

According to Merritt, direct lending tends to engender deeper loyalty to the credit union, too. In an indirect relationship, the borrower learns who the lender is when the first bill comes due. Conversely, direct lending establishes a relationship between borrower and lender right from the start, allowing American 1 to talk openly with members for the life of the loan.

“We can have a more effective conversation with these members and protect them from what they can and can’t see,” Merritt says.

Protection can take the form of gap or disability insurance, deposit accounts, a credit card, or another personal loan. Notably, American 1 members hold 2.72 deposit and loan accounts on average higher than the average for the credit union’s asset, state, and local peers. That kind of cross-selling is important because loans at American 1 tend to turn over quickly 2.5 years on average, according to the credit union.

“We have to hustle harder,” Sanford says. “We have big loan months, but the turnover can be quick.”

To service all that activity, the credit union employs 186 full-time equivalent employees and operates 16 branches. Respectively, that’s 28% and 89% greater than its asset-based peer averages. The credit union is open until 7 p.m. every weeknight except Saturday, when it stays open until 4 p.m., and it offers a full suite of contact options through which members may ask questions.

“We aim to be accessible while offering expertise,” Merritt says. “It helps us maintain consistency across the organization.”

The Happiest Place For Auto Sales

When it comes to direct lending, the importance of American 1’s car sales program cannot be overstated. The Michigan cooperative has run some version of the program for several decades. The events are a significant undertaking on the marketing and coordination front, but they are huge drivers of auto loans for American 1.

The credit union usually hosts three or four car sales every year. In one particularly aggressive year, it hosted seven. According to Sanford, the marketing and communications VP, the credit union has coined that year “The Year of Car Sales” and will never do that many again.

For a typical event, the credit union invites four or five local auto dealers to bring a large stock of cars to a central shopping location where interested buyers can shop until they drop. Car sales last three to four days, and daily hours regularly extend past the posted closing time.

“My favorite way I’ve heard a member describe it is ‘Disney World for car shoppers,'” Merritt says.

American 1 doesn’t pay the dealers to participate because dealers know the number of sales generated from one of these events outstrips opportunities offered by other potential partners. Before the pandemic, car sale weekends generated nearly $2million on average in auto loans for American 1.

The credit union staffs each day of the sale with 40 employees ranging from loan officers and underwriters to event planners and marketing folks. But it’s the prep work that requires the attention of the entire organization.

Marketing designs billboard, radio, and other advertisements while branch staff drums up interest and secures pre-approvals.

“They work hard to get members pre-approved before the event,” says Christopher Zegarlowicz, American 1’s lending manager. “We make the sale as smooth as possible. All members have to focus on is picking out the car of their dreams.”

This is part of the “Anatomy Of A Credit Union” series, presented every quarter by Callahan & Associates. Read more about American 1 or dive into a decade of archives. Contact Callahan to learn about gaining access today.

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