DuPont CCU, With State Supreme Court Decision in Hand, "Getting Ducks in a Row" to Serve Expanded FOM

WAYNESBORO, Va. – Dupont Community CU’s president/CEO felt “fairly confident” the state Supreme Court would rule in favor of the field-of-membership expansion decision made in 2002 by the Virginia Department of Financial Institutions. Still, when the Court handed down its ruling in February it sealed the decision for the CU, and now DuPont is getting its infrastructure in place to serve its expanded FOM and potential membership. “Even before the Supreme Court announced its decision, we were signing up new members anyway,” said Gerald Hershey. “The DFI never gave us any indication we had to stop doing this. When the DFI ruled in our favor after two appeals by the Virginia Bankers Association, we knew the commissioner had done his homework and it would hold up under challenge.” Hershey was referring to the appeal filed by the VBA in June 2002 of Commissioner Joe Face’s decision one month earlier to allow DCCU to serve a five county, five city FOM in the Shenandoah Valley. The VBA had argued the FOM expansion didn’t meet the required definition of a “well-defined local community.” When the Virginia State Corporation Commission upheld Face’s decision, the bankers appealed that decision to the Virginia Supreme Court. In issuing its opinion, the Virginia Supreme Court found that “the Court is of the opinion that there is no error in the order of the State Corporation Commission.On appeal, the Commission’s findings `are presumed to be just, reasonable, and correct.’” (CU Times, Feb. 25.) The expanded FOM brings DuPont Community CU’s potential membership to more than 259,000. Prior to the expansion it was 109,000. It currently has 43,600 members. In May 2002 before it applied for the FOM expansion, the credit union had 38,100 members. Hershey said since the FOM expansion was approved, DuPont Community CU has been focusing its marketing efforts on its product offerings instead of promoting its expanded FOM. It has been including, though, “now open to” mentions at the bottom of print advertisements or as it did recently in a television spot promotion it ran for its home banking product. It’s not that DuPont CCU doesn’t want the residents in the expanded FOM area not to know they’re eligible to join the credit union. Instead, Hershey explained, “we’re already in a community in Augusta County that’s growing at a healthy pace. We knew we didn’t want to start marketing into the expanded area before we got out infrastructure in place to handle call volume and loan demand, but we wanted to expand our field-of-membership as a proactive move so we wouldn’t be locked into any one county and we’d be able to spread the economic risk over a larger local community,” he said. In anticipation of taking in new members from its expanded FOM, DuPont is planning to bring its check clearing functions in house and become image enabled – the CU currently uses the Fed for item processing. The credit union is also upgrading its technology “to make sure it’s robust enough to handle another 40,000 accounts” and it’s going to a higher level, larger capacity mainframe. DuPont currently has 150 employees and is in the process of doing a staff growth plan. It’s also hired design/build firm KDA to do a 10-year space plan. The credit union has six branches and is planning on opening a seventh in June that will service current members. Hershey said the credit union plans to open additional branches in the future, but it hasn’t decided where they’ll be located. “Our philosophy is to make new friends and keep the old ones. We don’t want to do anything to our existing members to jeopardize their service at the expense of taking in new members,” said Hershey. DuPont owns its 21,000-square foot headquarters, and Hershey said the credit union has outgrown that space. In late 2003 it purchased a 16,000-square foot operations center located about half a mile from the CU’s headquarters that used to be a call center for a directory assistance firm. The credit union plans to occupy that facility in June or July and use it for its phone service center, accounting, technology, and training departments. “It would be easy for us to say let’s just go over to the new building and use it. But I want to use it appropriately and grow the credit union responsibly,” said Hershey. Also on DuPont’s radar screen for future products is small business services and loans. The credit unions also wants to get more involved in financial literacy in the local school system – it already offers scholarships to high school seniors in 16 area schools – and provide more services to the large Hispanic population in the CU’s FOM. Based on the credit union’s experiences with the Virginia Bankers Association, Hershey said he feels as though the bankers are paying attention to what the credit union is doing. But he said it doesn’t bother him. “We just need to keep doing what we do and provide good value to our members,” he said. -