NoteWorthy Federal Credit Union has been serving musicians in the Cleveland, OH, area since 1960. Its musical instrument loans and creative art project loans are just two examples of how the $1.9 million institution helps local artists who are often ignored by larger financial institutions.
In this Q&A, Henry Peyrebrune — president of NoteWorthy FCU and bassist for the Cleveland Orchestra — discusses how the credit union has achieved a 12-month membership growth rate that is more than four times the national average, 13.98 % versus. 3.43 %, and why for NoteWorthy it’s not about the product, it’s about the mission.
CU QUICK FACTS
data as of 12.31.13
HQ: Cleveland, OH
12-MO SHARE GROWTH: 19.21%
12-MO LOAN GROWTH: 10.73%
Has the credit union always offered loans on musical instruments?
Henry Peyrebrune: Yes. NoteWorthy Federal Credit Union was founded in 1960 as Local 4 Musicians Federal Credit Union. Instrument loans have always been part of a balanced portfolio of consumer products for us. Our mission is to serve the arts and entertainment community, and although we provide many types of loans, one of our specialties is providing loans for musical instruments.
Are musical instrument loans still an important part of your loan portfolio?
HP: The shape of our portfolio varies in response to market conditions. Instrument loans always have and will be an important part of it. In recent years, we have been expanding our membership and services to the larger arts community. To best serve them, we also offer Creative Arts Project (CAP) loans that artists in other disciplines can use for working capital or equipment purchases. It is our attempt to provide an analogous product to the instrument loans. We also offer low-rate VISA credit cards, auto loans, second mortgages, bill consolidation loans, and personal loans.
Do you work with any of your SEGs or local music stores to offer on-site financing?
HP: We often receive referrals from instrument makers and dealers as well as from members who have appreciated our service. We do not have dealer financing like a credit union who has a network of indirect lending auto dealerships might have.
How do most of your new members join or learn about the credit union? Can you tie new membership growth back to the instrument loans?
HP: Instrument loans absolutely help bring in membership, as do CAP Loans, because both are products specifically tailored to the needs of the arts community. We recognize that artists are highly motivated and disciplined people, even if they don’t always make a lot of money. They are small-scale entrepreneurs and business people who need financial services just as “traditional” businesses do.
Has the credit union made other changes to serve the broader arts community?
HP: Yes. In 2006, we began actively expanding our membership to include people from the entire spectrum of northeast Ohio’s arts and entertainment community. The credit union moved into the Tower Press Building in downtown Cleveland, which places us at the center of Cleveland’s arts and cultural communities.
Is there more competition today to finance instrument loans or is the credit union still the primary place you can find that loan type?
HP: The majority of artists are independent or work for small nonprofits and are still generally ignored by major funders and financial institutions. There is a real unmet need for financial services specifically tailored to their career patterns and business practices. This is where the credit union and our mission comes in.
How has your mission helped the credit union and its members achieve long-term success?
HP: I think the key thing is we take seriously our identity as a not-for-profit. That means we are mission-driven, not profit-driven. We are a service organization, not a business. Of course, we still need to be profitable. We pay attention to our finances and fundamentals, but only as a means to allow us to keep serving the members of the arts community. In short, it’s not about the product — it’s the mission.
Click on the image above to watch the video.