Enrichment FCU Refocuses On Retail To Enhance Members’ Lives

The Tennessee cooperative says PPP lending helped borrowers and the credit union alike — but at the cost of strategic initiatives.

Top-Level Takeaways

  • After a successful run with PPP, Enrichment FCU is now refocusing on long-term strategic plans.
  • Digital banking capabilities the credit union has gained through the program will help Enrichment advance its retail plans..

Enrichment Federal Credit Union($652.0M, Oak Ridge, TN) helped bail out nearly 400 small businesses through the Paycheck Protection Program but says it’s now time to move on.

According to Craig Peters, CEO of the Knoxville-area credit union, PPP lending generated goodwill and income. More importantly, it helped a lot of small businesses stay afloat during the pandemic, but these benefits came at significant organizationalexpense.

“It has sucked the energy out of executing on the strategic plan we laid out for 2020 and 2021,Peters says. “Those strategies have more long-term impact on Enrichment and our members than our participation in PPP lending.

The CEO says his cooperative is the only one he’s aware of in the East Tennessee area that handled PPP work internally rather than outsourcing it, and a few credit union peers with larger business portfolios declined to participate in the program.

Craig Peters, President/CEO, Enrichment FCU

In the first round of PPP lending, Enrichment made 268 loans for $9.6 million. As of mid-March, with approximately 10 loans still in process, the credit union had made 125 loans for $6.4 million. In the second round, it paid an agent $17,438 for referringclients but altogether garnered $450,576 in fees.

“We’ve served all our business members plus many others, Peters says. “We’re going to see many non-member borrowers approach us, but this is not our primary business.

A Tennessee cooperative is redeploying staff and creating a digital-first culture. Read more in “Enrichment FCU And A Post-Pandemic New Normal

The credit union’s primary business is, however, serving individual members. To that end, Enrichment is focusing on redeploying staff and reimagining its current branch network with an eye toward creating a digital-first service model.

What Went In, What Came Out

Standing up the PPP program on the fly in March and April 2020 was a 24/7 effort for Peters, chief financial officer Jeremy Hodges, and chief information officer John Merritt.

“It was more than full time, Peters says. “Involving others at that point would have required us to focus on training rather than implementation, and time was of the essence in April 2020.

The credit union generated a lot of goodwill and positive public relations for its PPP lending, but the opportunity costs now outweigh those benefits. Plus, it still consumes a lot of time for Hodges and Merritt.

Portal crashes. Controversies. Confusion. Despite a shaky start, the Paycheck Protection Program is providing badly needed capital to more than 4.3 million small businesses nationwide. Read more in Credit Unions Overcome PPP Nightmare

The tipping point for Peters came when the Treasury Department and U.S. Small Business Administration eased lending qualifications in February 2021 and began discussing extending the program.

On March 10, 2021, the American Institute of CPAs called for a 60-day extensionfromMarch 31 because of the program’s complexities and the April 15, 2021 tax filing deadline.On March 17, the House passed an extension of the program to May 31,and the Senate is expected to follow suit.

“I realized the program could go on indefinitely and our 2020 strategic plans already suspended due to COVID-19and our 2021 strategic plans might be deferred another year. Like anything else, too much of a good thing isbad,Peters says.


Data as of 12.31.20

HQ: Oak Ridge, TN
ASSETS: $652.0M
MEMBERS: 45,945
12-MO LOAN GROWTH: 12.8%
ROA: 0.94%

New Digital Capabilities Support Existing Business Plans

Peters joined Enrichment in 2013 and took the helm in 2016. Before that, he was a CPA for 30 years, focusing primarily on credit union consulting and auditing. Although it’s time to move on, the former accountant admits the credit union’sPPP participation did present many tangible benefits. For example, handling all the loans remotely helped the credit union develop its digital lending muscles.

“We’ve processed 393 business-related loans totaling $16 million without ever meeting face-to-face with a borrower,says Peters, who plans to retire at the end of this year. “We’ve never done that before. Now we know wedon’t need to meet face-to-face with auto or mortgage borrowers, either.

The credit union has put other capabilities into place, too, such as new website communication channels, document portals, e-signatures, and digital account-opening documentation. All of this and more will enable Enrichment to deploy them in future strategicplans.

With PPP out of the picture, Peters and the senior management team at Enrichment can once again focus on executing the cooperative’s strategic business plan, which includes.

  • Centralized lending: The project was targeted for implementation on Jan. 1, 2022. Peters says that is probably a quarter delayed.
  • Technology:In addition to turning the website into a branch, Enrichment is launching a new telephone system, branch signage, and data analytics. “We also need to better train all of our employees to use the technologywe’ve implemented over the past five years, Peters says.
  • Service organization:The credit union has developed a new business plan for its insurance CUSOand financial advisors.
  • MarketingWith new plans comes the need to communicate. This plan incorporates a newly hired employee experience manager (EEM) who is charged with hiring a technical trainer and working with the member experience manager (MEM)to build an employee/member digital information library.

“Virtually none of these are as far along as they should be, Peters says.

The CEO admits much good has come from the organization’s PPP work, but the benefits have not come without a cost to EFCU.

“Our strategic plans are very robust, Peters says. “They will positively affect our future much more than the PPP program.


March 23, 2021

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