"Don't Stand on the Sidelines"

A CEO offers advice from the trenches on helping members in a struggling local economy.

 
 

Lima, Ohio sits squarely in the middle of the Rust Belt. Affected by factory closures and a gradual transitioning of their city, Superior Federal Credit Union ($285M in Lima, OH) has reached out to create a stronger presence in their community and ensure growth for the credit union. Allen County, where Lima is located, has a population of around 120,000 with about 112,000 jobs located in the county. Over the last 25 years, the county has seen a profound shift in the makeup of jobs. Layoffs in the manufacturing sector have accelerated recently. In the past five years, the county has seen roughly 3,000 workers laid off from various factories and government agencies. The majority of these employees belonged to the credit union.

The credit union had faced these difficulties before. In 1983, the county experienced massive job losses through a series of plant closings. In response, the credit union converted to a community charter serving six area counties. With the recent job losses, the credit union faced a more complex situation – meeting the needs of individual members and families facing difficult times. Phil Buell, CEO, said, “We didn’t get it right the first time,” but recounted how they learned how to best help members in this situation from the experience.

When one plant closed in 2003, many employees made poor financial decisions, including cashing out their 401(k)s and pensions. Buell said many came back to the credit union for unsecured loans to pay the resulting tax penalties. With the next plant closure a year later, the credit union offered seminars on budgeting and met individually with the affected members to restructure debt and discuss retirement fund implications. The credit union relied on general information distributed through the local union combined with word of mouth to advertise their willingness to work with members in difficult situations. To be sure, the credit union was also watching out for its own interests – as the largest mortgage lender in the Lima, Ohio Metropolitan Statistical Area, the loan portfolio clearly had increased exposure and risk due to the job losses.

In the end, though, the credit union’s focus was on helping the members and being a trusted resource. The outreach has comeback tenfold to the credit union. Some members who lost their jobs later opened small businesses and now have business loans with the credit union. Other members may now be retrained for one of the growing industries in Allen County. Deeper relationships, resulting from the credit union’s efforts, also provide the credit union with enthusiastic members who spread the good word about the credit union within the community. A lifelong member – through good times and trials and tribulations – is the ideal member for Superior Federal.

As part of their proactive approach to helping members who are laid off, Buell and other executives of the credit union got actively involved with community development boards. One economic development mission plans to rehabilitate a faded street corridor in downtown Lima by building mixed housing, supporting existing businesses and encouraging new businesses to set up shop or relocate to this once popular area. This political involvement also helps the credit union with any necessary local lobbying efforts, an added benefit. Buell acknowledged that this type of involvement is not typical of most credit unions, but said that working to provide a variety of services helps members and non-members with daily living needs and community job creation. “Thirty-five percent, said Buell, of our members are underserved and this is simply another way to serve them”.

 

 

 

Aug. 3, 2009


Comments

 
 
 

No comments have been posted yet. Be the first one.