Mennonite Financial Federal Credit Union (Lancaster, PA, $119M) (now called Everence Federal Credit Union) traces its roots to 1955, when it began under sponsorship by the Mennonite Publishing House of Scottdale, PA. It then expanded its field of membership to all Mennonites in Pennsylvania before merging with other Mennonite credit unions in Ohio and Illinois. Mennonite Financial now has more than 15,000 members and will merge with Mennonite Mutual Aid, under the new name Everence, later this year. Here, Kent Hartzler, CEO of Mennonite Financial, talks with Callahan & Associates.
Explain your FOM.
KH: Mennonite Financial is a faith-based credit union and also something of a contradiction. We serve a niche market that is located across all 50 states, with our charter being a single, common bond by association — we have no geographic boundary and serve any person in the Anabaptist community. This community is made up of Mennonites, Amish, Brethren in Christ, and related Anabaptist groups.
The Anabaptist community comprises a variety of groups. It includes the Amish, most of whom don’t use automobiles and electricity; other Anabaptists are indistinguishable from most other Americans. We have strong values of pacifism, simple lifestyles, and mutual aid.
Mennonite Financial has members in all 50 states. Any person in any Anabaptist congregation or organization can join our credit union.
How do people find out about you?
KH: First of all, through technology. We have online banking, e-statements, electronic bill payment, and ACH capabilities. We also produce a quarterly newsletter and an annual report, both of which are mailed to all our members.
But a great deal of information about Mennonite Financial is spread by word of mouth and through our strategic partner, Mennonite Mutual Aid. MMA is a national organization that has volunteer advocates in congregations around the country. These volunteers serve not only as the eyes and ears for MMA in their congregations but also for our credit union. MMA and Mennonite Financial work together to offer a full range of products to members.
Do some of your products reflect Mennonite tradition?
KH: Some certainly do, and they are well received. We have a mission rebate on our credit cards. We donate 10% of our interchange income to missions, charities, or relief organizations.
We also write what we call "congregational-secured loans." In other words, the church is the co-signer. This might be used, for example, when a young couple in the congregation has a medical emergency.
In addition, a good deal of our loans are non-conforming. The properties, for example, might not have electricity, running water or conventional insurance but are valuable nonetheless. For example, we loaned to a family that built its house on top of its stable — the appraiser went half-crazy trying to find comps!
But we understand the plain community and the creditworthiness of its families. These are good loans, not subprime. Community banks might consider making loans like this, but they would call them commercial loans. In any event, although such loans are non-conforming they are worthy loans — the default rate is close to zero.
Part of our mission statement reads: “Our services will reflect our members’ faith values, enabling them to demonstrate their care for each other and to improve their financial well-being.”
We have special loyalty from members in their 20s. In addition, our credit union is attracting members from various ethnic groups. Our Spanish-speaking member numbers are growing at a rate that has us considering producing more Spanish language brochures (we currently have one) and adding a Spanish section to our website. Ethiopians, Vietnamese, and Chinese, immigrating to the United States and establishing their own congregations, are also fueling our membership growth.
You network by traditional credit union means and by Mennonite ones?
KH: Quite right. It’s a strong combination. Credit union networking methods are such things as shared branching, technology, associations, and ATM cooperatives. Mennonite networking methods include organizations like MMA plus the kinship among Anabaptists in general. We’re looking toward a bright future.