North Carolina and Florida credit unions’ pact yields success
RALEIGH, NC (February 10, 2021) —
In 2018, Local Government Federal Credit Union and Florida A&M University Federal Credit Union joined forces to help each other improve services to their memberships. These seemingly different credit unions agreed to collaborate on strategy, governance and operations. This is an update on what has happened in the meantime.
Local Government Federal Credit Union (LGFCU) is a $2.8 billion institution based in North Carolina. Formed in 1983, LGFCU’s mission is to serve the employees, officials and volunteers in the State’s local governments. LGFCU has over 360,000 members from all walks of municipal and county government.
Florida A&M University Federal Credit Union (FAMUFCU) was established in 1935 to serve the employees of the Florida A&M University institution. The University is a historically black institution. The Credit Union has over $23 million in assets and serves over 3,100 members.
If one only looks at the differences between these credit unions, an important lesson will be missed. FAMUFCU is a minority depository institution. LGFCU not so much. The credit unions are in different states. Their asset sizes are different. Yet, these two credit unions recognized they have much in common.
Sheilah Montgomery, the CEO of FAMUFCU, puts it bluntly. “Our Credit Union faced daunting financial, operations and compliance hurdles. Our assets were not growing. Membership was stagnant. Regulatory pressures were increasing.”
Montgomery continues, “our credit union’s trials were similar to the same frictions faced by many smaller institutions. Competition is not sympathetic. NCUA standards can feel rigid. Economic pressures are unforgiving. Merger opportunists are circling. Nevertheless, our community needed us, and we decided we would not let them down.”
FAMUFCU approached LGFCU with the idea of an interstate collaboration. This proposition intrigued the folks at LGFCU. “A Cooperative collaboration with another credit union just felt philosophically instinctive,” said Maurice Smith, Chief Executive Officer, LGFCU.
Smith said, “We began this relationship with the idea that our memberships have more in common than our differences.” Smith insists, “This is not a one-sided engagement. We sought an opportunity to help each other.”
Smith adamantly refuted the notion that would be a unilateral relationship. Smith insisted, “it would be hubris to believe that large credit unions cannot learn from small institutions. We intended both organizations would benefit from this relationship.”
Since the partnership began, FAMUFCU has grown. Its regulatory concerns have been greatly mitigated. Its capital has risen. Operational costs are lower. Member services have improved. Recognizing the importance of serving this community, the City recently awarded a large grant to the FAMUFCU. FAMUFCU is a success by any measure.
Renée Sattiewhite, President/CEO of the African-American Credit Union Coalition (AACUC), salutes the teamwork of these two credit unions. Sattiewhite says, “I’m proud that both credit unions are members of AACUC. Diversity comes in all forms. When two different credit unions join forces, the results can be inspiring. This is an example of how the cooperative movement is superior to all business forms.”
Jim Nussle, CEO of CUNA, cheers the success of FAMUFCU. Nussle points out, “the teamwork of credit unions is not unusual in our Movement. We hear wonderful testimonies of credit union leaders around the country who work together at the grassroots level to support one another. This is a fundamental principle for cooperatives.
Smith laments the consolidation of the Credit Union Movement. Like so many other industries, the number of credit unions have been declining over the past few decades. Smith states, “when industries consolidate franchises, members often lose the dignity of local control, close participation in governance and a corporate identity that reflects their neighborhood.”
Smith continues, “the FAMUFCU members stood their ground and fought for their credit union. They demonstrated the resolve of a membership that clearly believes no one else can be to them what they are to themselves.”
When asked what’s next for FAMUFCU, Montgomery answers, “we are on an upward trajectory. We have new cooperation from NCUA who applaud our recovery. Our members are excited to remain in control of their cooperative. With the support of our friends and the community, we think the sky is the limit.”
About Local Government Federal Credit Union (LGFCU)
Local Government Federal Credit Union (LGFCU) is a not-for-profit, full service financial cooperative which follows the cooperative principles adopted by credit unions worldwide. We are member-owned and democratically controlled. This means each member has one vote in how LGFCU is run, regardless of his or her personal investment in the Credit Union. Local Government Federal Credit Union (LGFCU) was founded in 1983. Our assets currently exceed $3 billion and more than 380,000 members are served by LGFCU, representing all of North Carolina's 100 counties and 540 towns, cities and villages. LGFCU is dedicated to providing services exclusively to local government employees, elected/appointed officials, volunteers and their families.