WINSTON-SALEM, N.C. – For the past six years, Truliant FCU and Victory Masonic Mutual CU have worked together to build a mutual trust in each other while concurrently crafting a partnership and successful working relationship. Now, in a strategic decision that caps off their six-year history, Victory Masonic Mutual CU – the first black-owned and operated community-based credit union in Forsyth County – has merged with Truliant. VMMCU, which has almost 2,000 members and nearly $1.6 million in assets, is now known as Victory, a Truliant credit union partner. The merger was effective Dec. 6. Truliant serves around 170,000 members and has more than $930 million in assets. While Truliant President/CEO Marc Schaefer explained that the merger “is one in the traditional sense of the word, their members are our members,” the merger is unique in that the Victory name will continue to appear on the credit union's members' statements, and when they call into Truliant on a special number, they will be answered by `Victory, a Truliant credit union partner.' Signage at the credit union which is located in an office at 5 Star International Market, will also read the same. In addition, Truliant plans to develop a new line of financial tools that will carry the Victory name and will be designed to address the specific needs of African-Americans and Latinos. “Victory is our diversity brand,” said Schaefer. “They successfully served a diverse population and this merger will help us better understand their needs so we can continue to expand these efforts. Anything we can do to make the brand more culturally accessible will be enhanced. The name is merely a wrapper, a way to make their services more accessible to their members and the community they serve. “I think if you went to most bankers and tried to explain to them what Truliant did with Victory, they'd ask `what was in it for you?' They'd find it hard to believe that we don't have any ulterior motive,” Schaefer added. Mergers have been part of Victory Masonic Mutual Credit Union's history since it was chartered in 1946 as Victory Credit Union. In 1984, it merged with the Employees Credit Union of Winston Mutual Life Insurance Company, and in 1990 it merged with the Shriner Masonic Credit Union. In announcing the merger to Victory's members, VMMCU's Chairman Lafayette Jones referred to it as the credit union's `final merger'. Truliant's relationship with VMMCU goes back to 1997 when AT&T Family FCU – as Truliant was called then – wanted to take the community of Waughtown into its field-of-membership under NCUA's Interpretative Rulings and Policy Statement (IRPS) 9401 concerning community chartering. The once-predominant white community was mostly comprised of minorities, and except for two large banks, there were no other financial service providers in the community except for check cashing outlets and several finance companies. However, the D.C. District Court's injunction on select employee group expansion by federal credit unions blocked AT&T Family's plans before they were approved. So instead the credit union threw its support behind VMMCU which served the community. That support allowed VMMCU to open a branch in the supermarket where they're still located and which features a Bill Paying Center on site where members electronically pay bills to more than 100 different companies. Truliant also provided various services to Victory such as staff training – Victory has a bilingual staff to service its Latino members-use of Truliant's data processing system, and technical and accounting assistance. Victory, in return, provided transaction services to Truliant members. Schaefer admitted that in the beginning of the relationship between the two credit unions there were some mutual concerns. “We wondered if we shared the same value and goals. They had to trust that we wanted was good for their welfare and future and that we'd follow through on our promises and provide services. They had to trust that we weren't taking advantage of them,” he explained. “Over time though, we developed a high level of trust and friendship,” Schaefer stressed. But their best efforts and friendship couldn't change the tide and stimulate Victory's growth. “We tried hard and worked hard for Victory Masonic Mutual Credit Union to bootstrap itself into self sufficiency, but they couldn't get the scale they needed so they would have the resources to reach out to the people they wanted to serve and provide them the necessary services,” Schaefer said. Jones agreed with Schaefer's assessment, and explained that, “Victory recognized that financial services is a volume business and the ability to distribute cost around key vendors and offer essential services is dependent on having resources. We had one office, three employees, and 2,000 members. While we succeeded at many things over our history such as bringing our delinquency rate down from a high of 18% to a low of 3% and modernizing our computer operations, we also looked in to the future and saw a lot of difficulties because of current interest rates and consolidation in the industry. We understand there will continue to be a lot of pressure and competition for the African-American and Latino communities that we serve and have been our bread and butter. We know how difficult it's been bringing our credit union up to speed and we knew we lacked certain member service offerings, so we had to make some hard decisions. It came down to services for our members.” But even when Victory's Board determined it needed to make plans for the future, merging with another credit union was only one option it considered. Other options included remaining status quo and making some enhancements, and retaining the credit union's charter and board and having a management company manage the CU. Once the board decided merging was in its members' best interests, it sent out merger proposals to six credit unions, one of which was Truliant. Five of the six CUs responded. “We weren't saying anything negative about Truliant, but we needed to do our due diligence,” said Jones. “It was a very precise process.” The exercise included comparing Victory's mission with that of the other CUs, and examining their “integrity,” their involvement in the community and their board composition. When Victory was founded in 1946 by four leaders of the black community – one of whom, Robert Miller, was Jones' father-in-law-its mission was to provide low-interest loans for low to moderate-income members. At the time, banks would not make loans to African-Americans, and Jones explained that the credit union enabled blacks in the community to pool their money and then borrow it whenever necessary at affordable rates. “The type of charter and membership we've had is what's sustained us over time,” said Jones. “Victory has been able to survive because we've always been very careful with the meager assets we have, and because we knew anything we did could potentially dislodge the operation. We had to be very careful with our alliances. We're control freaks. We guard our charter and our members with the core of our fiber,” he added. As to why Victory chose Truliant as its merger partner, Jones said, “We looked at Truliant and saw some benefits we each had that we could bring to the table and help each other with,” he answered. Schaefer tipped his hat to Jones saying, “Lafeyette Jones to his credit realized that for Victory to reach its objectives it had to do something different and realized it was in the credit union's long term interest and that of its members, to merge so it could help more of its members right away.” Jones has joined Truliant's Board as an associate director. “Given the increasing diversity of the markets we're serving, I saw bringing Victory in as an opportunity to give a spark to our own diversity efforts,” said Schaefer who added that Victory was the initiator of the merger talks. Schaefer admitted that operating Victory as a Truliant credit union partner “won't be easy, but it will be well worth it.” He has no regrets with setting up Victory as the credit union's diversity brand. “That's why you have brands, so you can appeal to different market segments and develop services that appeal to that market. We recognize the cultural differences of the members of Victory and understand the importance of developing products that serve their cultural needs. You have to have the cultural connection” he said. New members of Victory will have the option of joining under the Victory or Truliant brand, “but they will be Truliant members either way,” said Schaefer. VMMCU's field-of-membership includes the 50-mile radius around the city of Winston-Salem, and Schaefer said “we intend to fulfill that mission with a special focus on services for African-American potential members.” Truliant FCU's membership base includes 700 different organizations located in North Carolina, South Carolina, Ohio, Florida, and Virginia. “One of the greatest lessons from Victory's existence has been that every entity has an advantage and something to offer. We've run a multi-cultural institution and have a knowledge of our members. These are people who I go to church with, who I live next door to, and who I know by name. Truliant has tremendous resources. We can do great things together. There will be some victories and some missteps, but I'm very excited about the merger,” said Jones. -

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