Daisy Employees Federal Credit Union was founded in 1951 by employees of the Daisy Manufacturing Company (now Daisy Outdoor Products). The company builds BB guns such as the official Red Ryder, carbine action, two hundred shot range model air rifle featured in the cult-classic movie A Christmas Story. At the time of the credit union’s founding, Daisy Manufacturing was based in Plymouth, MI, and Daisy Employees FCU operated under a SEG-based charter. When Daisy moved to Arkansas in 1958, the credit union stayed in Plymouth, converted to a community charter, and changed its name to Community Financial Credit Union. ($574.5M, Plymouth, MI).
CU QUICK FACTS
COMMUNITY FINANCIAL Credit Union
data as of 06.30.14
- HQ: Plymouth, MI
- ASSETS: $574.5M
- MEMBERS: 56,042
- BRANCHES: 10
- 12-MO SHARE GROWTH: 5.31%
- 12-MO LOAN GROWTH: 6.34%
- ROA: 1.59%
The credit union now serves 23 counties in Michigan, including communities between Detroit and Ann Arbor as well as a few areas in the northern part of the state. Despite its larger footprint, Community Financial has upheld a tradition of community service it has built since its founding.
When the recession hit in 2009, the credit union was forced to make decisions about the importance of its community giving. As many organizations put the freeze on community outreach, Community Financial continued to give and continued to lend. Now on the other side, CFCU has a clear understanding of its priorities and has earned a reputation as a constructive corporate citizen.
Here, Community Financial CEO Bill Lawton and marketing manager Sarah Cousineau talk about their approach to serving communities the credit union has called home for more than 60 years.
What are the main troubles affecting your communities?
Bill Lawton: We’ve experienced a lot of the same challenges as the rest of the country in terms of real estate value and unemployment. During the recession 2009, 2010 our members received more than $1 million in unemployment. That’s down to about $100,000 now, even with an increase in membership. We never really had that huge boom in front of the recession like other states did, though.
How did the credit union respond to the recession?
BL: When the wheels were falling off the economy in 2009, we stuck to our underwriting standards. With few changes, we committed to lend to members in our community. When everybody was tightening their belts, we were not. We had auto dealers coming to us ones we hadn’t been strongly partnered with, ones that had lost all of their underwriting and indirect lending and we continued to lend in that area. We were lending in the same responsible way we’d been lending prior to everything going crazy.
Was that a business decision or was that just the right thing to do?
BL: It ended up being a fantastic business decision, but at the time, it was just the right thing to do. If things had continued to get worse, it could have jeopardized our existence. It had the potential to be a bad business decision, but I believe if our community is going down or a SEG group is having issues, the solution isn’t to find a healthier SEG group or community. It’s our responsibility to take care of our members. If our members are having such dire problems that they can’t pay back loans, then what right do we have to exist? Are we fulfilling our duty to them by stopping what they created us to do?
The big banks stopped contributing to charities and nonprofits, but we continued at pretty much the same rate.
As margins shrank, how did the credit union afford to keep lending?
BL: We had one year where we lost money. In 2009 we cut incentives in half, we froze salaries for a year, and we cut our 401(k) match from 10% to 5% [it’s now back to 10%]. But one thing we committed to not do was reduce our charitable contributions. The big banks stopped contributing to charities and nonprofits, but we continued at pretty much the same rate. In bad times, these contributions are often the first to go, and the nonprofits struggled as their financing sources went away. We recognized the contributions were more important at that point in time than at any other.
How do you fund community contributions?
BL:We have a profit sharing plan with our employees, what we call gain share, and for a number of years we weren’t paying it out because we weren’t hitting our budgeted income levels. But when we started paying that out again, we linked an additional amount on top for our community giving. It was important to share our success with our communities. That allowed us to create a couple of programs, programs we’ve done since the Great Recession that we weren’t doing previously.
How do you determine what your members’ needs are?
BL: That’s one of the neat things about the way Sarah and her marketing team created our biggest and most recent effort, the Summer of Sharing program.
Sarah Cousineau: We had the traditional groups we helped every year, but we wanted to know who else was in the community. With Summer of Sharing, we invite our community to tell us what good they could do with $1,000. This year we got 580 different stories of groups and organizations our members thought we could help. From that, we learned about some great people that we never knew about before, like certain nonprofits or school programs.
We also have the advantage that a lot of our team members live where they work, especially in our northern branches, so that helps solidify the bond between the credit union and our communities.
How do you get the Summer of Sharing stories?
SC:When we created the program, we created a SummerOfSharing.org microsite that we link to from the CFCU.org website. Members can go to that page, see what the program is all about, and submit a story. We also put it on all of our marketing material to get the word out.
We have a group of team members, a different group every week, that reviews the stories and from there we award $1,000 each weekday for 60 days during the summer. That’s $60,000 per summer, and this is the fourth year, so we’ve given out $240,000 through Summer of Sharing.
Does it get picked up in the media?
SC: It’s mostly through print media and the Internet that the word has gotten out. We send press releases and contact the media throughout the summer. The first year we did it, we had some local TV stations cover an event.
Is community involvement a business strategy or charity?
SC: It’s just something we do. To be a responsible business partner, we give back and help build stronger communities. It only helps Community Financial grow. But from my point of view, that’s not why we do it. We do it because it just makes sense.
BL: We do it to improve our community. Would we do it even if there wasn’t an ROI? Yes, I think we would, but it would be a little harder. If you connect the long-term dots, it is something that makes us different. One of the reasons we are as successful as we are is because we have a holistic approach to what we do.