Want growth? Seize opportunities to
Guest column by Jim Schrimpf
Smaller credit unions face many challenges:
the oppressive deluge of new regulations, lack of a spread, slow loan
demand, challenges to succession planning, and more. But there are small
credit unions that are doing great and have a bright future. One
way to get there is to meet overlooked financial needs, and in
doing so, improve service penetration and cultivate member loyalty.
My credit union, Brewery CU, is a low
income-designated and Community Development Financial
Institution serving primarily the
central city of Milwaukee. After losing money for four straight years in
the late 90s, we decided to sell our branch in a suburban location to
concentrate our efforts in the near downtown area, comprised chiefly of
lower-income households. Does that seem counterintuitive?
Since that move, we have more than doubled our
assets (with no mergers), have a capital ratio of 17%, membership has
grown from 3,800 to 7,600 and we maintain a very strong ALLL with a
loan-to-share ratio of 95%. Ours is one of just a few five star-rated
credit unions by Bankrate.com.
Most of these statistics fly in the face of
conventional wisdom, that serving predominantly modest income and
working poor people is just too difficult to be successful long term.
Our experience tells us otherwise and it begins with:
- A dedicated and compassionate board and staff.
- Putting higher risk loans on the
books but pricing them according to risk.
- Strong community involvement. We are founding
members of Local First
Milwaukee and won the 2012 Business
Journal Central City Business award.
- Offering products and services that uniquely
address members' needs. For example, we offer bus
passes, stamps, low cost money orders, instant debit and ATM card issue,
mobile banking, Fresh Start Checking (a second chance type of account),
a payday loan alternative, secured credit cards, credit builder loans
and mortgage loans under $25K. Our Fast Cash payday loan alternative has
saved our membership over $900,000 in fees that they would have paid to
traditional payday lenders.
- Looking for reasonable ways to say
"yes" instead of simply saying "no."
This is the core philosophy that has worked
for us over the years and we are more than happy to share our best
practices with any credit union that asks. But there's always more we
can do; we need to follow up on many of the action steps in our movement's
nationwide campaign for growth, Unite for Good.
I'd encourage Wisconsin credit unions to
attend The League's Innovators In Outreach
Roundtable on September 18, which will
feature panel discussions on proven outreach
strategies and wealth of resources to help you identify
needs that, when met, can help credit unions grow. The League
is also planning a webinar October 16 on risk-based lending that
can reveal more ways of evaluating risk and saying "yes" to
The bottom line is that the world is changing
fast and change is difficult in many ways. But for those who can see the
needs all around them that have gone unaddressed, the future is ripe
Schrimpf is CEO of Brewery CU in Milwaukee. He can be reached at (414)
273-3170, Ext. 121. If you have a perspective on an industry issue you'd
like to share with our readers, contact the
The Unite for Good effort is an
internal growth strategy developed by CUNA in conjunction with its
Board, state leagues, credit unions and system partners. The
plan's action steps – to remove barriers, increase awareness and foster
service excellence–are aimed at helping more credit unions become
their members' primary financial institution by compelling members to
see credit unions as their best financial partner. Read more articles in our Unite for Good