How To Charter A Credit Union

On August 7, 2020, the NCUA granted its first and only credit union charter of the year to Growing Oaks Federal Credit Union ($964,059, Goldsby, OK). Led by CEO Pam Greening, the credit union serves those who live, work, or worship in the Sooner State counties of Canadian, Cleveland, McClain, and Oklahoma.

According to its website, the credit union intends to be a federal credit union that distinctly returns to the cornerstone purpose for which credit unions were created, to assist the unserved and underserved.

Growing Oaks started operating in December 2020; however, its story was years in the making. In this Q A, Greening discusses the beginnings of the credit union, the chartering process, what she hopes the credit union will accomplish, and more.

When did you come to be involved in the efforts to charter Growing Oaks?

Pam Greening: We started having conversations nearly four years ago. I’ve worked in banking, primarily on the finance side, all my career. I was ready for a shift in my career, so I joined a construction company in central Oklahoma.

I started to look at some issues that were causing financial problems with our employees the company itself was offering payroll advances, car loans, and home leases with the option to purchase. I helped create educational programs for them before thinking about the bankability of our employees and how we could solve their problems. I researched a few different business models, such as starting a loan fund or a payday-type company that didn’t charge crazy interest rates, before coming across the credit union model.

We’re a faith-based company, and the whole idea of cooperation and discipleship blended well with our model. We talked about what would be possible if we had our own credit union, so I researched how to charter one. We had so many people in our community interested that we decided to go for a community charter rather than an employer-based model.

It was maybe eight months of research, then three years engaged with the NCUA fulfilling the steps and requirements, waiting for feedback, and working different channels before we were granted our charter in August 2020.

How long until you opened your doors?

PG: It took several months to get things in place. You can’t sign contracts or make any moves until the charter is granted, but we had pro forma agreements with vendors before then. It took us some time to set up our core. We opened our doors December 8, 2020, and since then we’ve been building our savings and CD funding base. That’s going well, and we’re close to launching our checking product and consumer lending. From there, we’ll continue to add ATMs and debit cards before looking into business products next year.

Do you have a physical footprint?

PG: The construction company, located in McClain County, had a building on its campus it wasn’t using, so we did a simple remodel and added a teller line. We have one part-time and three full-time employees now.

Part of our business model has an outreach component for some non-profits in Oklahoma City. We go to the city a day or two each month to meet with those clients, and we have a little office down there for that.

Right now, we don’t have a need for a big building, but we’ll make the decision if one does become available. There are one million and one steps to take a credit union from a business plan to a living, breathing entity, and we’re not there yet.

There are one million and one steps to take a credit union from a business plan to a living, breathing entity, and we’re not there yet.

Describe Growing Oaks’ mission.

PG: We believe God’s principles on the stewardship of your money is the way it works best: God owns it all, and he wants us to take care of it, help our families and our neighbors, and set some aside for the future. It doesn’t matter the size of your bank account, we want to help you transition into a more fiscally secure place.

In fact, our name relates to this. It’s about potential. If an acorn isn’t in the right environment, not getting the right nutrition, it’s not going to grow into all it can be.

Education is important to us. We offer a 12-week educational class and one-on-one counseling sessions. We won’t use credit scores when approving loans. Instead, we want borrowers to complete some education before applying and as long as they have the ability to repay, their cash flow and ratios are good, and they pass the educational component, we can approve them. We’re still tweaking how that looks, but that’s our theory.

Why do you think your charter application resonated with the NCUA?

PG: After we got our charter, I received emails from several groups asking that very question. So, I went back to the NCUA and asked. You can have all the faith in the world that the chartering process will move quickly, but there’s work you have to do.

The NCUA told me the way we described our mission and the population we intended to serve was both clear and exactly what they intend for credit unions to do. It was exactly why they wanted to issue new charters. They said they were not interested in charters that were going to look like every other bank.

Then, they want to know more than who you want to help, they want to know how you’re going to do that. When the NCUA listened to our business plan, they heard how we’d been thinking through that part for years helping our people is why we chose a credit union charter over the other options.

That’s the soft side of things. On the technical side, they told me I presented my material in the format they prescribed. Plenty of groups have great business plans, but they don’t present the plan in a way the NCUA can digest. I also think my financial background helped me address and answer questions they’d typically have for non-financial people, who might get hung up on the financial pro formas or not understand how much it’ll cost to get a credit union operational or where they’re going to find the money to capitalize the credit union initially.

Did you have help in the process?

PG: I felt like I was well equipped. I did, however, grab the CEO of Otoe-Missouria Federal Credit Union ($2.0M, Red Rock, OK), Leilani Harpole, as one of my mentors. Otoe-Missouria was the first credit union to receive a charter in 2019, and I used her and some of the other groups I’m in to ask questions: Who’s on your board? What’s it like to work with the NCUA?

Did you face any unexpected challenges in getting the credit union up and running?

PG: I’m old school. If I reach out to a vendor or other potential client, we’d sit down, have meetings, they’d sell me on the solution, and we’d hash through the agreement. My experience this time around was not like that at all.

Even before the pandemic, working with vendors was almost entirely self-service; we were very much on our own for the implementation. If I had a question, they’d spend time sharing with me how to find the answer rather than holding my hand. So, all of a sudden, I was managing 45 profiles for 45 different web-based platforms to stitch my credit union together.

It was overwhelming and unexpected. I just think that’s how business is done these days, and probably with the pandemic that will only accelerate. If you want a person, you’ll catch them when you can, and that’s a challenge. There’s a big learning curve when it comes to getting something like this off the ground. But it was a good lesson: No one else is working on your stuff when you’re not working on it.

When you look back one year or more from now, how will you know you’ve been successful?

PG: We’ll look at our members, those people we hope to walk alongside as they rise financially. They will be saving, they will be giving back, they will be telling their story to other people. When we have folks helping other folks come to the credit union, when we have folks who can see their financial life is better, then I’ll feel like we’re having success.

This interview has been edited and condensed.