Extending the Idea of a Credit Union: Interview with John Fenton

Affinity FCU is moving beyond being a transactional institution to that plus an informational one, as well as promising members to make Affinity the easiest place to do business.

Affinity CU began in 1935 as AT&T Employees. When AT&T split off Lucent in the mid-1990s and redefined itself, its credit union redefined itself as well. Affinity has 2,000 SEGs, and it has members across the country, most of them in northern and central New Jersey. With so many SEGs, says John Fenton, president & CEO Affinity FCU, acts like a kind of community charter in its principal New Jersey area. Affinity has 123,000 members and almost $2 billion in assets, making it New Jersey’s largestcredit union.

You want to transform the notion of what your credit union is?

JF: Absolutely. We are totally dedicated to members. Accordingly, we are trying to move the credit union beyond a mere transactional entity. We want the credit union as well to be an informational and educational resource. And we wantit to be the easiest place for our members to do business.

How are you moving the credit union toward being an informational and educational entity and how does this fit your strategy?

JF: Here’s an example. We don’t just offer mortgages; we have set up a whole knowledge base about them. No one wants just a loan; they want something that the loan will get them a house, a car, a college education. Takea mortgage. Especially for a first-time homebuyer, the whole process is difficult. Where do you look? What should you look for? How do you get the best financing? We have set up partnerships with realtors and relocation companies. Our message to membersis: If you trust us, let us introduce you to our trusted partners who can help you with many of your tasks. We have a checklist of things buyers should think about and how to deal with them, for example, how to find out about the quality of schoolsin a neighborhood, how to find out the property tax rate, where the best real estate values are at this particular time and so forth. The goal is to make the whole process of relocating or buying a home far easier than it ever has been, far more informed,and far more successful.
In the same vein, we are about to roll out Lugnuts, our informational value around cars. People aren’t born knowing about cars and how to operate them economically and safely, especially first-time car buyers.Lugnuts is going to make available to members not only how to get the best loan on a car but also things like what to do if you get in a fenderbender, how to fix a flat, how to prepare for winter driving and the like.
Part of the Lugnutsprogram is partnering with a used car dealer. We are going to have employees there on site to help people with the buying process. They are going to help customers educate themselves into savvy buyers and financial dealmakers. In a way, this is sortof the reverse of indirect lending; we are going to have only one site and our own people there to be helpful.

You also said you wanted to make Affinity the easiest place for members to do business.

JF: Yes, and cars is one way we are doing that. We have a service here that allows members to call up and have us track down any particular make or model of car, color, extras and so forth; we find it, haggle for the best price and driveit to the member’s door. Done deal. That’s easy. You can see we are really going beyond the transactional model of a financial services institution.
I might also add that 99.9% of our loans are automated. When you apply for a mortgage,you can get approval seconds after hitting thesubmit button. Borrowers can apply for loans 24/7 in their own homes at their own convenience. We really try to make it easy. Our brand is that we promise our members we will make doing businesswith us easy and in keeping with the member’s own way of doing things.
We’re also at work creating aone application form. Our aim is that a member will not have to fill out one set of forms for a mortgage and another fora car. We’ll combine forms so we’ll only have to ask most questions only once. A mortgage holder who then applies for a car loan will receive really speedy treatment.

What kinds of things do you do internally to orient your credit union in this way?

JF: We work very hard at such fundamentals as staying on message. We work at keeping executives from doing wrong things and from doing things not on message. We keep them focused on our niche, which is serving members in a long-term relationship.

How are you structured internally?

JF: We hire the best people. Then we don’t saddle them with a silo or command-and-control environment. They know what the mission is and we empower them to go out and do it. Banking has been around for a thousand years and lots ofthe processes are the same as they were a thousand years ago. But boy, when we hearit’s always been done like that, it drives us crazy. We don’t want to hear it, and we challenge that kind of thinking every day.
The resulthas been a lot of new efficiencies around here. Our efficiency ratio keeps dropping and dropping. We keep focusing on ways to make doing business with us easier and it keeps paying off. In these uncertain times, we are still seeing growth.

Are there other things you do with your executives?

JF: We challenge them to find ways of sayingYes to members, not to slow members down with bureaucratic process and long lists. We also have a unit that works with any member to whom we have saidNo. This unitworks exclusively with these members, trying to figure out what the underlying motive is for a loan and how best to get it to the member given that member’s current financial situation.

Anything else you do with your executives?

JF: We train them to expect and prepare for the unexpected. That way when problems come up, they have already thought through solutions. We train them to look at circumstances and problems as opportunities. There are opportunities everywhere,under all circumstances, even in this limping economy. You have to have your head up and looking for them. You can’t dwell on the past, or on past mistakes. You have to make the best of what circumstances are showing you.

April 29, 2016

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