Pennsylvania Large CU CEOs Put Their Heads Together, Discuss Challenges and Issues

HERSHEY, Pa. – Large credit unions in Pennsylvania, as in any state, have to deal with issues and concerns that are endemic to their particular state, as well as those they share with credit unions on a national scale. Representatives – mostly CEOs – from 19 credit unions in the state with assets over $100 million met for two days recently to discuss some of these issues and their concerns. The Pennsylvania Credit Union Association-organized CEO Forum on Sept. 11 and 12 -the second annual meeting held for the CEOs – was held at the Hotel Hershey and featured a list of credit union popular speakers including Chip Filson, president of Callahan and Associates; Bill Hampel, CUNA chief economist; NACUSO General Counsel Guy Messick of Lastowka & Messick, PC; and Ray Fisher of AmeriServe Associates. Ironically, PACUA also held on Sept. 11 a Small Credit Union Workshop. Thirteen people from six credit union met at Penn Drake CU, Karns City, $3.2 million in assets, to hear a presentation on “Delinquency, Collection and Bankruptcy” made by Karen Janoski, CEO, CHG FCU, New Kensington, $1.7 million in assets. PACUA holds small credit union workshops monthly. “You have to remember that a lot of the credit unions that were represented at the CEO Forum compete with each other, and yet we were all willing to share information and stories on how we’ve grown our loan portfolios, what’s worked and what hasn’t,” said Lonnie Maurer, president/CEO, Belco Community CU, Harrisburg who attended the CEO Forum. When evaluating any statistics about credit unions’ performances in the state, Maurer said it’s important to remember that there are over 700 credit unions in Pennsylvania and the 34 credit unions with over $100 million in assets account for 60% of the total CU assets in Pennsylvania – $21,440,740.4 billion, as of June 30, 2003, according to Callahan & Associates. “Most of the credit unions in Pennsylvania are small credit unions that don’t have the money, sophistication, or marketing expertise to offer more products beyond basic shares and share draft accounts, and if they do they don’t promote them,” offered Maurer. As for credit unions’ 27.57% penetration rate of the state’s total population, Maurer opined that many residents in the state are either not in credit unions’ field-of-membership or are but don’t know they’re eligible to join a credit union. “There are a lot of credit unions in the state that have significant fields-of-membership but haven’t penetrated them as well as they should,” he said, and that includes CUs with newly acquired community FOMs. PACUA VP Communications and Marketing Mike Wishnow said that “as an association, we can always do a better job,” and he agreed that “it’s one of our challenges, as it is for credit unions throughout the country, to let potential members know there’s no mystery to joining a credit union and if they want to join one, there’s likely one a consumer is eligible to join given the increasing number of credit unions with community charters.” Starting in October, timed to coincide with Credit Union Month, PACUA will be running a statewide billboard blitz to encourage residents to join credit unions. The billboards will direct residents to the association’s CU Match Up Web site – www.pacreditunions.com – where they can learn which credit union they’re eligible to join. “It’s our job as an association to make Pennsylvania residents aware of credit unions and how to become members,” said Wishnow. The PACUA VP said the association is also in the process of creating a task force to explore ways credit unions can “creatively” increase their loan portfolios. Wishnow said the task force would not just look at “standard solutions like glossier brochures.” Maurer said credit unions have tried offering indirect lending, but with few exceptions their efforts have been unsuccessful. He attributed that to high reserve fees dealers ask credit unions for, as well as CUs’ mistrust that dealers will send them quality paper. In addition, said Maurer, many dealerships finance their fleets through local banks, “so there’s already a tight relationship between them. It’s a `you scratch my back, I’ll scratch yours’ situation.” Wishnow agreed this has been a problem, but said it’s not insurmountable, and it’s one PACUA plans to address. In addition, he said, “the number of small credit unions in Pennsylvania aggravates the problem credit unions have had with growing their loan portfolios because they’re typically hesitant to get involved with sophisticated loan products, but we’ll be working with them to show them how they can offer more loan products.” -