Virginia United Methodist Credit Union began in 1952 when Methodist pastors could not get loans from banks because they moved parish to parish too often. It has $18 million in assets and 4,600 members with eight full-time employees and two part-time.Its one branch is in Richmond, Va., but it participates in the CUSC Shared Branch Network. The following interview with its CEO, Carol Mathis, was orginally published in the fourth quarter edition of Credit Union Strategy and Performance(CUSP).
What is your field of membership?
In 2000 we opened membership to anyone who is a Virginia United Methodist church member, a church or agency of the Virginia United Methodist Conference or church employee, plus all family members. Thus we are closely related to the Virginia United MethodistConference, which meets once a year at a different place around the state. We do have a couple of churches across the North Carolina and West Virginia state lines and there is a small portion of southwest Virginia not in our charter.
What sort of products do you offer?
We offer the normal run of products. We also participate in the CUSC shared branching network and the CU-Here and CU-24 ATM networks. These are important to us because we have only one regular branch — you can’t compete if you don’t have access.
For a long time we’ve made small loans to churches. Actually the first lending we did for churches was through a business Visa program. We now make unsecured loans of up to $50,000, and we hope the ceiling rises to $100,000 if CURIA passes. We arelooking to make larger loans to churches and for this we are working with the lending CUSO called Member Business Solutions (MBS), which is owned by Southeast Corporate FCU and Georgia Central Credit Union. MBS is helping us reach larger churchesand make larger church loans. These count as commercial loans and we are limited in how many we can keep on our books. MBS can help by finding participation partners. We have only just started with the larger loans all church loans make up5% of our portfolio now but we are looking forward to doing more.
What about work with United Methodist churches?
We have a VISA affinity program we can offer to individual churches; the transaction cash returns to them.
There is also another program we have just started. It uses the church’s collateral at the credit union to help make loans to some of the parish members in need. This started when some of the pastors of the churches were troubled by parishioners goingto payday lenders. These pastors helped set up what they call the Jubilee Assistance Fund Loan Program. The churches don’t make loans, but they do have money to help people. So we partner with them in this way: The church puts a certain amountof money into a savings account, which earns interest. Money in the account can be used as collateral for a loan to the parishioner, normally someone who would not have qualified for one of our loans in the first place. In this way, the parishionerdoes not have to go to a payday lender. As the borrower pays back the loan, more money in the fund becomes available to be used as collateral for loans to others. Both the church and our credit union work at providing the kind of financial and educationalcounseling that would best help the borrower.
Now pastors are talking about setting up like funds with different churches. When that is done, money can be pledged across parishes; wealthier parishes would be able to help poorer ones.
Do you have other cooperative efforts going?
Six years ago, I and about seven other CEOs from around the country formed the United Methodist Credit Union Association as a support group to help each other. We meet once a year and exchange ideas. We don’t want each one of us reinventing the wheel.We have the same Methodist FOMs in different areas so we can we bring up ideas that are helpful to everyone. An example is how we formed a group to find a lender partner for our large church loans. The Association has been working well.
How do you market?
We don’t promote outside the church. But we do a lot of promoting among the agencies of the Virginia United Methodist Conference. These are not just the affiliated churches but also the affiliated colleges, camps, Methodist homes and the like. Someof these organizations are in our building. We promote the credit union through their newsletters. We set up booths at their events. We organize seminars on financial management, identity theft, the wise use of credit and the like for their members.The Conference also has Internet information exchanges, one for pastors, one for lay persons and one for youth. We post information about the credit union on these — for example, about student scholarships on the youth site.
We have 4,600 members but have estimated our potential membership at over 300,000, so there is a long way to go. We’ve had only a small number of people on staff, and that makes it hard to grow. So we’ve recently hired a professional marketerand I think this is going to help us break out of low growth.
We also have a pastor who works part-time with the Conference on stewardship. He spends the rest of his time working part-time for us explaining stewardship to churches and church members and how the credit union fits into good stewardship. A John Wesleysaying is Make all you can to save all you can to give all you can. So it’s easy for the pastor to talk about stewardship for churches and about credit unions practically in the same breath. The credit union helps people save moreof the money they earn, and that allows them to give more money to the church. Everyone wins.
But too many people who have been going to church all these years don’t know they are eligible to join a United Methodist credit union. We are working to very much broaden awareness.
In other ways, how are Methodist values reflected in the credit union?
We are sensitive to Methodist principles. We invest only in socially acceptable investments. We don’t offer courtesy pay, which we do not feel is good financial management for our members. We don’t weave gimmicks into our products. What you seeis what you get, and we are respected by our membership for this.
I think the principles of the United Methodist Church and the credit union are very close, of people helping people. Even our problems are similar: difficulty attracting young people, for example. But we work at it. This is a wonderful niche and verysatisfying to work in.