KINGSTON, NY – It took NCUA rejection and three years of regrouping and redefining for Mid-Hudson Valley Federal Credit Union to have its latest application for a community charter approved. The credit union got the green light on July 25 to serve nearly 800,000 residents in Dutchess, Ulster and Orange counties here, a move motivated partly when Mid-Hudson's largest sponsor group, IBM, closed in 1995. "It was well worth the time and effort, it's a perfect fit for us," said William Spearman, president/CEO of Mid-Hudson Valley Federal Credit Union. Originally chartered in 1963 as IBM Kingston Employees Federal Credit Union, IBM's downsizing and subsequent closure forced the credit union to rethink its single sponsorship status by submitting a revised charter and receiving NCUA approval for a multi-occupational charter in the 1990s. Its new name, IBM Hudson Valley Federal Credit Union, reflected its potential outreach, Spearman said. The moniker would later change to its current name. Since Mid-Hudson's conversion to a multi-occupational charter, the credit union has added 533 select employee groups to its membership base. It serves 40,000 members, has $384 million in assets and six branches with two more underway. In 1998, Mid-Hudson applied for a community charter conversion one month prior to the amendment of the Federal Credit Union Act by the Credit Union Membership Access Act. NCUA denied the application because it "failed to provide sufficient evidence to demonstrate that it is a single geographically well-defined area where residents interact," according to NCUA appeal documents. Incidentally, two other area credit unions, TEG Federal Credit Union and Hudson Valley Federal Credit Union applied for community charters around the same time as Mid-Hudson but they were also denied. Disappointed, Spearman said the board considered converting to a state charter or a mutual thrift charter but bided their time preparing a more extensive and clearly defined application that stated how they would serve residents in the three counties. NCUA Chairman Dennis Dollar commended Mid-Hudson for "not letting the frustrations of the regulatory process discourage them." "They are an example of how to work within the system, not by changing the regulations, but by working within the regulations to be able to serve their communities better," Dollar said. Dollar also said the credit union will reach out to potential low- and moderate-income members at branches that are located near low- and moderate-income areas through a risk-based lending program, participation in Small Business Administration loan programs and bilingual outreach. Spearman said its most recent charter change is a sign of the times as indicative of the growing number of credit unions that have relied on large employer sponsors for membership only to shift focus once those companies downsize or close for good. He added most of the businesses here are small in nature, many of them with 25 employees or less. "It's very difficult to expand with those type of numbers," Spearman explained. Still, with the new community charter, he added the credit union might explore the possibility of commercial and business loans. "We have a full array of products and services already, but we'll be looking at other areas that will serve our members," he said. -

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