Debunking the Myth of FOM Limitations

Think a community charter is the only way to grow? This single sponsor credit union grew at double the industry average for the past decade, proving the traditional credit union model still has legs.


Over the past 10 years, Mayo Employees Credit Union (Rochester, MN) produced double-digit annualized growth in assets, shares, members and loans--nearly twice the industry average.

Mary Hansen, who has been with the credit union for 6 years, four of them as CEO, attributes much of their success to the close relationship they have with Mayo Clinic. Their story illustrates how a single field of membership does not have to be a limitation. In fact, it was a driving factor in their growth strategy over the past decade.

Mayo Employees’ Decade of Leadership


December 1994

December 2004

Annual Growth


$ 46,655,513

$ 184,531,676



$ 42,604,841

$ 151,180,428



$ 54,602,850

$ 207,650,722







$ 7,082,958

$ 23,109,343






Ave Share Balance

$ 4,533

$ 6,776


Ave Loan Balance

$ 4,451

$ 8,869


Member Focused

For 60 years, Mayo Employees was a traditional "savings and loan shop", offering just the basic services. Today, the credit union is a full-service financial institution with auto and mortgage loans, credit cards, financial brokerage and insurance services, and a full suite of online banking options. They serve 30 sites in 7 states across the US.

The changes came about as a result of member and employee surveys that indicated a demand for increased service. The credit unions responded in 1997, opening the floodgates of change when they started offering their first checking accounts. But it wasn't until 2003 that physicians were even allowed to join. Prior to that, the credit union's membership only include allied health employees (all non-physician employees of Mayo Clinic).

One way Mayo Employees affiliates itself with their members is by offering products tailored specifically to niche markets with the Clinic's staff. For example, Mayo Employees books mortgage loans that don't qualify for resale on the secondary market for young residents whose student loans and other debt prevent them from qualifying for a traditional mortgage. They also work with Mayo Fellows, foreign nationals with no U.S. credit history but who need homes for 6 months to 5 years.

Employee Driven

Over the past decade, the credit union staff has grown four fold yet Mayo Employees achieved its phenomenal growth without the corresponding growing pains many institutions might expect. Mary attributes this to the fact that all credit union staff members are employees of Mayo Clinic itself (the credit union reimburses Mayo Clinic for all salaries and benefits). Therefore, they are held to the same high standards and live the culture of respect that all Mayo employees are expected to embody. They also receive the same benefits as other Mayo employees.

In addition, since the credit union is tightly linked with the clinic, Mary not only reports to the credit unions' member-elected Board of Directors, she also works with a division chair at Mayo Clinic and presents information to their Board. While some might view this a cumbersome bureaucratic step, Mary views each meeting as a way to constantly reinforce the credit union’s value to a critical constituency.

This credit union example shows how a single field of membership does not have to be a limiting factor in anyone's growth strategy. In fact, it was a key driver of Mayo Employees strategy which yielded double the growth of the industry as a whole.




April 4, 2005


  • As a health care based credit union that is struggling just to survive, I would like to pose one question. What would happen if the Mayo Organization was sold to another organization that already had a strong established cu that was endorsed by the new board of directors? I've watched my FOM shrink and lost my lease in a hospital that we had maintained a branch in since 1984, because the hospital was sold to an out of state company that had a cu. We were branching before branching was cool. I've also watched my membership go from over 11,000 to about 7300. I've also seen two of our hospitals close. While our assets have remained stable and our capital is strong I feel that being a SEG FCU is scary because you cannot predict what that sp onsor company is going to do. V.Smith President/Ceo Key FCU Houston Texas
  • It has amazed me to watch how this credit union has been adding new features as reported at each of the 3 last annual meetings of the Mayo Employuee's Credit Union. I give credit to the drive & determination of the CEO, Mary Hansen. Keep it up!
  • "This was an interesting article, but I would like to make a couple observations. The first is that it is not uncommon for any small business to be able to achieve a much greater per centage of growth than a larger business -- this happens every day in every industry. The larger the company, the smaller the annual growth tends to be (in terms of %). Will Mayo Employees be able to maintain this high growth ratio when they are $500M in assets? $1B in assets? Will they even be able to grow to that size (short of the effects of inflation on the value of the dollar) without expanding their FOM? At some point, they will saturate their FOM and will stagnate without considering more FOM expansion. Secondly, this article is based on the premise that Mayo Employees has not changed their FOM during this 10 year period and experienced this growth with the same FOM throughout the 10 year period. But the article clearly states that this is NOT the case. The FOM was expanded in 2003 to include physicians for the first time. Granted, this occurred late in the growth period and probably had little effect on the overall growth over the 10 year period. But to be accurate and consistent, you cannot present this as a Credit Union that has experienced significant growth without any changes in its FOM when there clearly was a change in its FOM. And I have no doubt that as they continue to grow, the pressures to sustain positive growth will drive further changes in its FOM. These same pressures are driving many Credit Unions to consider state or community charters rather than remaining with a Federal Charter (rightly or wrongly). Gary E. Somerville Director of Decision Support Systems DM Federal Credit Union Tucson, AZ"