A tribute to Artemenko

Gene Artemenko died October 15. He was one of the greatest among credit union managers. Many tributes will be paid to his memory. I would like to add mine. Gene was my teacher, mentor and friend. In managing my own credit union operation, many of the things I did that were successful were directly attributable to what I learned from him. I especially admired his ability to think insightfully. Gene could get to the crux of an issue faster than any other person I have known. He usually spoke bluntly and with no nonsense. Once you had discussed an issue with him, you may not have agreed with his point of view, but there was no confusion as to exactly what you had been talking about. Although I had met Gene previously, my first real visit with him was in the early `70s when I had a long stopover at O’Hare Airport in Chicago. I used the occasion to tour his operation, United Airlines Employees CU. Gene’s shop first struck me as small and unimpressive. It would not have been very impressive for a credit union one-twentieth that size. When it finally registered that I was looking at the then second largest credit union in the country, the fact that it was so simple and unimpressive became very impressive indeed. There were no status symbols. Gene worked from a small office. He had a 60-inch desk, the same as most of his employees used. It was his no-nonsense approach reduced to reality. At that time, “automation” was still a new word for most credit unions, but United Airlines ECU was already highly automated. When a member called for a loan, the employee answering the phone dropped a document into a computer terminal next to the desk. By way of a hook-up with the sponsor, the computer filled in certain information on the loan application. This also took care of the employment and earnings verification. Before the transaction was ended, the payroll deduction amount had been entered into the company’s payroll system. When the member received the document, the signature on the check served for the check endorsement, loan application, note, security agreement, and payroll deduction authorization. In most credit unions at that time, each of these was a separate document handled manually at separate times by procedures devised for each one. Gene was an independent thinker. He never followed conventional wisdom simply because it was conventional, but only if he agreed that it was wise for his application. UAECU was known as THE “plain vanilla” credit union, offering members only one share account and one loan account. Back then, many other credit unions were attempting to streamline operations by introducing new products. I asked Gene why UAECU did not have a revolving loan plan. He said, “From the time our employee answers the phone to the time the check goes out, we handle a loan request in four minutes. Can you put out a loan advance that fast?” I had to admit that I could not. In today’s online banking environment that may not seem like such a big deal, but it was an awesome accomplishment back then. Gene explained to me that his “plain vanilla” attitude stemmed from two things: First, he concentrated strictly on his own members and their needs. He did not feel constrained to match what other credit unions and other financial institutions were doing for their own members or customers. Secondly, he wanted any product he offered, to be a better deal for the member than they were able to get elsewhere. Gene succeeded admirably. He did not offer certificates because “we want the savers, not the investors.” Nevertheless, UAECU’s share dividend rate exceeded most other institutions’ short and mid-term certificate rates. The loan rates were also very competitive. To the envy of almost all other managers, it was done on an income to expense ratio of 5.5%. Because of its high dividend rates, UAECU had three times as much in shares as it had out in loans. Some of Gene’s detractors accused him of running an investment club. I tested this and found that his loans per member ratio exceeded the national average. The credit union was satisfying the loan demand that existed in its member group. UAECU had a superabundance of shares relative to its loan demand. In a later era some credit unions (and some regulators) complained about “excess shares” and took steps to persuade the members to withdraw them. Gene told me his strategy was simple: Loans use up most of the overhead therefore interest on loans should pay for all of it. Even though the investment portfolio is very large, it only takes a few people to handle it, therefore all of the income on investments can be returned directly to the members in the form of dividends. It was an approach that his members loved. Gene tested many of the possibilities of credit union concepts and operations before most of us even thought about them. The whole credit union community has benefited from his efforts. I am proud to have known him. Frank Wielga Retired Shermansdale, Pa.