Rapid Growth in Nation's Counties Can't Keep Up with Membership Growth at Some Credit Unions, Many Take it in Stride

California, Florida, Nevada and Texas are Home to Fastest Growing Counties. FT. WORTH, Texas – Like many of the states in the Sun Belt, Texas is home to several of the nation’s fastest growing counties. Of the top 10 growing counties with populations over one million, in six of them, credit union membership growth has surpassed the population growth rate, according to Callahan & Associates, Inc. With an average membership growth rate of 5.2%, these counties have more than tripled the industry’s average of 1.5%. According to the U.S. Census, the top 10 fastest growing counties with populations over one million are Riverside County, Calif.; Clark County, Nev.; Maricopa County, Ariz.; San Bernardino County, Calif.; Hillsborough County, Fla.; Palm Beach County, Fla.; Tarrant County, Texas; Bexar County, Texas; Sacramento County, Calif.; and Broward County, Fla. For $35 million Tarrant County Credit Union (TCCU), growth for the year is already at 8%, said Lily Newfarmer, president/CEO. A year-old ATM network alliance, a new community charter and a business development officer has helped introduce the credit union to residents of this huge, geographically diverse county. “We’re really working it and we really don’t think it has to do with growth in Tarrant County,” Newfarmer said. “Since the county is so huge, we try to bring the credit union to the members.” That means having a business development officer making frequent trips to TCCU’s four offices, which has contributed to an 80% penetration rate and a 32% increase in loan growth, Newfarmer said. Since she came aboard as CEO in 2000, membership has increased 25% from 4,972 to 6,000 with an average annual growth rate between 5% and 6%. And, while TCCU was initially founded to serve Tarrant County employees but recently expanded to a community charter and dropped the word “employees” from its name, Newfarmer said they still maintain strong ties. “We have a great relationship with the county, three of our four offices are located in county buildings so we don’t have to pay rent,” Newfarmer said. “But we do have a business plan to target marketing at non-county folks.” At $1.4 million Bexar County Teachers Credit Union (BCTCU), a 2003 membership expansion in a low-income designated area has helped fuel growth, said Roxanne Longoria, president/CEO. The credit union was founded by African-American teachers, principals and other school staff in 1950 and its legacy is still known in the community here, she added. “Many of our members did not want to join a large (financial institution), some of them didn’t have the means to do it,” Longoria said. “Our services are low cost and we provide financial counseling – the members want to be able to sit down one-on-one and talk.” BCTCU is located just east of downtown San Antonio and many of its newest members have come from there even though there are several large credit unions and banks in the area, Longoria said. Since 1999, the credit union has grown from 473 members to 856 members. Those numbers may be small by industry standards but the recent influx of African-Americans and Hispanics moving into the area and opening small businesses could change things. “We’re seeing a lot of beauty salons, clothing stores, lawn services, just a lot of minority-owned businesses,” Longoria said. In addition, there’s a great deal of new neighborhoods springing up which is right on target for BCTCU. The credit union acts as a starting point for community resources that will help members with down payments for homes and mortgage education. Even with astronomically high housing costs, California continues to attract many to the West Coast to plant roots. No surprise that three of the fastest growing counties are in the Golden State – Riverside County, San Bernardino County and Sacramento County. In fact, Riverside County is the fastest growing county in the nation, according to the U.S. Census. It would have been easy for $670 million Altura Credit Union to maintain its 56-year relationship under its original name, Riverside County Federal Credit Union and later several variations of that. But in October 2004, a new moniker addition, “Altura,” which means “altitude” in Spanish, clearly showed how the county’s ethnic makeup had changed. “We’re probably the only credit union that has picked a Spanish name,” said Mark Hawkins, president/CEO. “I think we’ve taken the steps to embrace the county’s growth rather than shy away from it. We want to take advantage of the dramatic growth that is occurring now because later on, it might be too late.” Altura’s membership growth rate was 9% in 2004 and it now serves more than 100,000 members. Over the last decade, the credit union’s composite average growth has been 15.54%. Much of that growth is fueled by Altura’s branch locations and an active promotion and public relations machine that has made the credit union a household name in the marketplace. That’s critical given the fact that 45% of the county’s two million residents are Hispanic. Hawkins said Riverside County, unlike many of its sister counties, is probably among the last areas in the state where housing is still relatively inexpensive. Like California, Florida is also a popular relocation state. It, too, has three of the nation’s fastest growing counties – Broward, Hillsborough and Palm Beach. As president/CEO of $165 million Bay Gulf Credit Union in Hillsborough County, Bill DeMare has seen farm land and other acreage go from being obtainable to the multi-million dollar range. Tampa and cities in surrounding counties have burgeoned over the past decade with a proliferation of housing, new highways and more people. What’s driving membership growth for Bay Gulf is the same gasoline that’s fueling other larger ones nearby like $4.4 billion Suncoast Schools FCU, $1.9 billion GTE FCU and $1.5 billion Macdill FCU: the credit union awareness message. “Everyone does a lot of advertising here on TV, radio and through billboards,” DeMare said. “Credit unions are really making an effort to let people know who they are.” For Bay Gulf, which serves primarily federal employees and others, net growth between December 2002 and December 2004 was 11.9%. Membership has increased even as the credit union had to purge a lot of dormant accounts more than a year ago, DeMare said. But growth, especially for credit unions, isn’t always a good thing. Take the case of $340 million Las Vegas-based Clark County Credit Union (CCCU), which is located in another one of the nation’s fastest growing counties. Membership growth has remained flat for nearly eight years and that’s fine, said Mark Andrews, vice president of sales and marketing. “We’ve had to hold the horses back,” Andrews said. “Growing is a dangerous thing for us because we don’t want to dilute our net worth,” which CCCU is trying to get down to 10%. Instead, CCCU focuses on member retention and has stopped adding select employee groups, which now stand at more than 300. Because Las Vegas is such a transient town, the credit union uses bonus dividends to keep current members around. For 2004, it paid out more than $5 million to its members with one member receiving $58,000. CCCU has been able to pay out dividends for the past five years. Beyond radio ads, there are no big, splashy campaigns to court new members, Andrews said. Most of its new members sign on through family members, work referrals and community feedback on the bonus dividend payouts. Andrews said because of CCCU’s size – it serves more than 23,000 members – “it doesn’t want to get carried away with growth.” “The market is nuts here, it’s so bizarre,” Andrews said. “I’ve been at the credit union for eight years and (prior to this) an entrepreneur my entire life. It’s been an interesting challenge to try and hold the reins back. We just don’t want to damage what we have.” -