How 4 Credit Unions Tie Faith To Finances

These cooperatives serve the financial and the spiritual needs of members.

The U.S. credit union movement was born out of a sense of shared community, whether based on occupation, association, or geography. These bonds still hold tight, especially among faith-based institutions.

There are more than 200 primarily religious- and faith-based credit unions in the United States, all of which serve the financial needs of their membership. But the relationship doesn’t stop with money. What differentiates this group of credit unions is their ability and willingness to meet the spiritual needs of members, too.


Lutheran FCU
Data as of 03.31.17

HQ: St. Louis, MO
ASSETS: $13.5M
MEMBERS: 2,230
12-MO LOAN GROWTH:425.1%
ROA: -6.45%

That’s just part of the job, says Ken Kruger, CEO of Lutheran Federal Credit Union ($13.6M, St. Louis, MO) since January 2017.

We talk about our faith freely, Kruger says. Often, when people need money or a loan there is something going on in their lives. So, we engage in a relationship with them. And faith is a large part of that relationship.

Raise Awareness

The NCUA granted a charter to Lutheran, which serves members of the Lutheran Church-Missouri Synod (LCMS), in 2014, and the credit union now counts more than 2,200 members.

Lutheran Federal offers greater choice of financial services to the 2.3 million members of the church in 49 states, Kruger says. Instead of taking an omnichannel approach, though, the credit union operates a branchless footprint.

Right now, members are primarily rostered church workers, such as pastors, teachers, and deacons. In the future, Kruger would like to attract more members from the pews.

To do that, the credit union will work to deepen its relationship with the church, whether through marketing in church-affiliated newsletters, sponsoring ministry conferences, or directly supporting ministries financially.


He also envisions a product whereby members can directly donate to a ministry of their choosing.

All together, these operational evolutions will help the credit union meet the goal it was born to accomplish.

We built this credit union because we believe it would be better for church members and better for the church, Kruger says. We’re constantly searching for more ways to drive awareness and share the reason for this credit union’s existence with our field of membership.

Encourage Future Savings

Beehive Federal Credit Union ($241.2M, Rexburg, ID) started in 1960 on the campus of Ricks College, a small junior college in Rexburg, ID, owned by the Church of Jesus Christ of Latter-day Saints. At first, the credit union, known at that time as Ricks College Federal Credit Union, limited its field of membership to college employees and their families.


Beehive FCU
Data as of 03.31.17

HQ: Rexburg, ID
ASSETS: $241.2M
MEMBERS: 26,514
12-MO LOAN GROWTH: 13.2%
ROA: 0.75%

Ricks College is now Brigham Young University Idaho, and the credit union has likewise expanded its field of membership, which now encompasses Mormon church members in Idaho and all contiguous states except Utah (where Deseret First Credit Union calls home).

As for the name, the beehive is a symbol of industry and a representation of a well-designed community in the LDS church. According to the Book of Mormon deseret means honeybee.

The LDS church is one of the largest practitioners of missionary work, as thousands of church members typically men and women in their twenties engage in church service, humanitarian aid, and community service each year. However, missionaries volunteer to serve and do not receive a salary for their work.

You can imagine that living anywhere in the world for two years can be a bit pricy, says Shane Berger, president and CEO of Beehive. It’s important these kids start saving young so they have funds available when they are ready to go on their mission.

Both Beehive and Deseret First offer savings accounts geared toward future missionaries. Beehive’s Missionary Savings account pays 3% APY up to $10,000 with no monthly or withdrawal fees, though the credit union limits the monthly deposit up to $100. Deseret First’s Mission Savings Fund pays 2.34% APY on balances up to $15,000 with unlimited deposits.

Right now we pay 3%, Berger says. That’s crazy in today’s interest rate world. But we pay the higher rate to benefit those who are saving for a mission.

Stay Special. Serve A Niche.

There are hundreds of faith-based credit unions, and each has their own mode of business for how they tie faith into their members’ financial lives. Here are two more.


Jafari No-Interest Credit Union
Data as of 03.31.17

HQ: Houston, TX
ASSETS: $143,788
12-MO LOAN GROWTH:Not Meaningful
ROA: 66.00%

Jafari No-Interest Credit Union ($143,788, Houston, TX) serves Islamic members who attend select Jafari community centers in Houston, Dallas, and Austin.

According to the Qur’an, money is not an asset from which it is ethically permissible to earn a direct return. So, although credit unions typically charge interest on loans to pay for expenses and capital needs, Jafari does not.

Instead, Jafari funds its operating expenses and capital through member account fees, which start at $3 per month. Additionally, the credit union relies on donated office space and volunteer staff. According to its website, the credit union’s annual expenses are approximately $36,000.

As of June 2017, the credit union had issued $114,000 in loans and helped members avoid more than $39,000 in interest payments.


Everence Credit Union
Data as of 03.31.17

HQ: Lancaster, PA
ASSETS: $179.5M
MEMBERS: 17,038
12-MO LOAN GROWTH: 13.0%
ROA: 0.42%

In Pennsylvania, Everence Credit Union ($179.5M, Lancaster, PA) serves individuals who belong to denominations that have roots or relationships with the Anabaptist community. Members of the credit union share the stewardship principle and believe strongly in sharing resources with one another.

In concert with this belief, the credit union offers its MyNeighbor credit card, which allows members to donate to select charitable organizations. Each time a member uses the credit card, Everence donates 1.5% of the transaction amount to one of 9,000 eligible 501(c)(3) charitable organizations selected by the member, according to credit union CEO Kent Hartzler.

View the one-page MyNeighbor credit card fact sheet here.

In addition, the credit union tithes 10% of the income from members’ credit union VISA credit card purchases and uses it to support church and mission groups; caps interest rates on credit cards and loans at 6% for those whose missions or other voluntary service affects their ability to meet financial obligations; and runs the Everence Sharing Fund that provides matching grants to help meet the financial needs of churches and communities.

But for all the good faith-based institutions do for their members and community, these credit unions are limited in their ability to grow branch locations. That’s because these institutions need to find areas highly concentrated with church members they are not community-chartered credit unions.

I don’t think there’s anything too special about a community charter, Beehive’s Berger says. It limits use, but I like the idea of serving a niche.

August 1, 2017

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