Myers to Retire from Alternatives FCU, CU Strives To Turn Underserved Members into Savers

ITHACA, N.Y. — Bill Myers is just as excited about the direction Alternatives Federal Credit Union is poised to go in as he is about leaving the financial institution he has led for nearly three decades. The president/CEO recently announced his plans to retire in June 2007 after 28 years at the helm. Under Myers’ watch, what started out as a subsidiary to a local community chest to help fund start-up businesses grew to become a financial institution that found and served underserved niches with low-income people, young people and its first member base, small businesses. “I wanted to be at a turning point so that it would be easier [for Alternatives] to make the transition,” Myers said. “In a lot of ways, we have declared success.” Today, Alternatives has more than 8,400 members and nearly $50 million in assets. The numbers are rather conservative by some standards, but growth has come in many other ways. Myers provided Alternatives with ample notice four years ago, according to Yvette Rubio, who is on the search committee. In the next few months, the board will recruit through print ads and e-recruitment with the goal to have someone in place by spring 2007. Myers said he doesn’t plan to retire from working and has been looking around at other opportunities. His youngest son will graduate from high school next June so it will be just he and wife Nancy at home. He likes community development credit unions and is open to staying in the movement. An avid writer, Myers hinted of the possibility of using that talent. He dismisses any mushy talk of the next candidate “having big shoes to fill.” “Going forward, the challenges are somewhat different [for Alternatives],” Myers said, saying growth and building more branches are priority. “That would imply a different set of skills so we can avoid the analogy of someone coming in to fill someone else’s shoes.” Going back, the community development credit union was initially sponsored by Alternatives Fund, established in 1970 as a trade association of community groups, cooperatives, worker-owned businesses and individuals. That relationship continues today with the credit union belonging to the Alternatives Group, a consortium that includes the fund and two other not-for-profit organizations. Myers came on when there were “zero assets and zero members.” At the end of its first year in 1979, Alternatives had nearly $36,000 loans and more than $137,000 in deposits. Back in the 1970s, less stringent business lending regulations propelled Alternatives rapid growth over its first three years of operation. The turning point came shortly after when the credit union sought ways to stay true to its mission of building wealth and creating economic opportunity for underserved people and communities while still reaching out to other underserved markets, Myers said. Start-up home financing became the next entry as variable rate loans became all the rage. “There were no protections for certain things,” Myers recalled. “It was really like the wild, wild west. Many credit unions reacted by offering higher interest rates as protection.” Alternatives wanted to be sure that it offered additional protection and consulted with mortgage experts on how members could save enough for a down payment and deal with interest rate change risks. The credit union came up with a variable rate loan that had fixed payment features, a product that became one of the more popular loans in the county at the time, Myers said. “We ended up selling piles of them to other credit unions,” Myers said. “The lesson we learned is if you look at things from an encumbered point of view, it can work. We also realized that everyone had started [offering the loan]” after Alternatives’ product debut. Over the next nearly three decades, Alternatives added to its offerings including car loans, credit cards, individual development accounts, starting a youth credit union, SBA loans and online banking. Into the new millennium, Alternatives also added tax preparation services, refund anticipation loans, health savings accounts and continued offering financial self-help seminars on a plethora of topics. Myers admits that competing with area financial institutions has never been one of Alternatives’ strategies. “ We just don’t play that game,” he said. “The battle between credit unions and banks–that’s not our battle. The banks here are more likely to give us a loan to help us out.” Competition is also not as paramount given that low-income people in Alternatives’ geographic span are not served in the same marketplace as higher end people, Myers said. That’s not a judgment; there can be disconnection when someone takes out a payday loan, but they don’t get a credit score this way, which keeps them from financially moving forward. “We’re trying to heal that wound. We’re trying to find more ways to move savers back into the mainstream,” Myers explained. “That has been our most successful model.” Indeed, Alternatives recently wrapped up a comprehensive member survey that asked poignant questions about barriers to being able to save and what members considered great financial moments in their lives. While 60% of Alternatives’ members are defined as low-income, they often don’t stay in that category, Myers said. Things like individual development accounts, which match savings contributed for the purchase of a home, to start a business or pay for education costs, have helped members move up the financial ladder. “One [survey] question asked what motivated members to save and many said it goes back to [what they lacked] in their childhood,” he pointed out. “This [survey] gives us a better idea of what interventions we can use and how to design products and services.” While Myers says he will serve in a limited advisory role in helping to choose the new CEO, at the very least, he hopes that Alternatives’ mission of helping the underserved build wealth will not only remain, but also expand. “We’ve been insular in that we don’t have branches and we’re concentrated in one geographic area,” he said. “The next step is not to hyper saturate to diminishing returns.” In his letter to members, Myers writes with confidence that he pushed Alternatives as a vehicle for social change. “Our key understanding was to bring a civil rights agenda to banking, and build community organizing partnerships,” Myers said. “Our approach has always been to resist the obvious solutions, to look more carefully, to not bet on the frontrunner.”