USAlliance Federal Credit Union ($803.1M, Rye, NY) began as the credit union for IBM headquarters in Armonk, NY. Since then it has developed one of the most sophisticated charters in the nation. It encompasses an underserved community charter, most of Manhattan Island in New York City, approximately 300 SEGs in the Northeast, a community charter for seven counties in Massachusetts, and a TIP charter for government employees in the state of New York. It has $800 million in assets, 55,000 members, and 17 branches. Kris VanBeek came to USAlliance from Digital Federal Credit Union in Massachusetts in 2011.
We see continued growth for 2013. We expect to grow with the improving economy, although the regional economy is somewhat unpredictable. All of the important signs are positive. There is good momentum in all major categories of lending: auto, mortgages, and home equity. We expect that momentum to continue. We also expect to capitalize on the Bank Transfer Day movement, which has been good for us.
CU QUICK FACTS
USAlliance Federal Credit Union
HQ: Rye, NY
12-MO SHARE GROWTH: 5.98%
12-MO LOAN GROWTH: 9.16%
One big change for us in 2013 is that we will be changing. In a sense we will be taking both a step forward and a step backward. We are taking on more of a traditional credit union role in terms of partnerships inside and outside the industry. We will use integration and technology to take some of the traditional SEG models to a new level. Here’s an example: Typically when a person wants to become a member and open an account, there is a good deal of paperwork to complete, or, if online, a good deal of boxes to fill in — personal information and so forth. But nearly all of this information is already recorded at the SEG.
We want to team with the SEG to transfer the appropriate information with the click of a mouse. There would be other keystrokes — regulatory requirements that we would take care of — but the point is to make joining and setting up an account simpler and faster for people in SEGs. We have had initial success with this and we expect to build on that success in 2013. It hurts when someone is inclined to join and then is presented with a three-page form to complete. You often hear, “I’ll take this with me and bring it back,” and that’s the last you see of them. It’s far better if they can click a couple of times and sign their name.
We also want to work more closely with other credit unions and help them along — get back to cooperative basics. If we are successful in an area — let’s say auto loans — we will partner with other credit unions, sell them our loans, and hope that doing so can boost their bottom line. We also want to partner with other credit unions in our region to become more efficient and to cosponsor charitable and community events with them. Traditionally, this credit union has been more inwardly focused than most, a kind of light under a bushel. We are going to make ourselves better known.
Since the financial crisis, credit unions have had to play defensive, that is, devote a great deal of attention to the bottom line. In 2013 we intend much more to switch to the offensive. We are going to reach out more and be more cooperative — optimize opportunities rather than worry over minimizing damage.
In order to reach people we are going to increase our advertising and outreach by 25-30%. Some of that effort will be direct mail and standard advertising. But we also will ramp up our online channels. We had good results online in 2012 and we are going to build on the momentum we developed. We will do more work with email, but by no means become a spammer. Rather, our emails are going to be highly precise, almost surgical. The message we intend will only go to people who have characteristics that make us believe the message will be well-received.
For three years we were not actively working to increase our loan portfolio — but now we are. It’s sort of like allowing an eight-cylinder engine to sit for three years and then firing it up: It’s not going to be purring right away; it’s going to need some tuning. We are tuning and tweaking our efforts, but we expect to get better as the year goes on.
We also want to work more closely with other credit unions and help them along — get back to cooperative basics.
Peering a bit into the crystal ball, we’ll try to seize opportunities as we see them arise. Last year we did well by getting more into home equity loans before others saw them as opportunities. We did assessments, weighed the risks, and then began lending in this area. It helped us in 2012 and we expect to do similar things this year. Moreover, at present I see commercial real estate stabilizing. Our competitors are gun-shy about lending in the commercial area, so I think a recovering commercial market might be an opportunity others have not yet seen. We could get started before others, and it would be a way of helping our members when no one else is.
We made some significant technology investments last year, for example, in member augmentation and underwriting tools. So for the coming year we want to bring these up to full speed to make the most of them for adding member value.
We’re looking for double-digit growth in 2013. We completed two mergers last year and we expect similar, if not more, activity this year. We want mergers to be strategic — for the right SEG, branch location, or special management. We won’t pursue mergers for their own sake, we don’t want growth for growth’s sake.
Most important, we are going to display extraordinary service to our members. We call this the Shiny Penny Concept. Whatever we do, we want to deliver a shiny penny to every member we touch. A shiny penny does not carry a lot of hard value but it’s something people notice and like to have. It might be going the extra mile to solve a member’s problem, looking a depositor in the eye, or working someone through a technology solution. It’s a special delivery that others don’t give. We’ll work to deliver that to everyone.
As told to Brooke C. Stoddard