Credit unions share three commonalities that differentiate us from other financial institutions: 1) great rates; 2) dedication to member service; and 3) inspired leadership. Achieving the third is the most important factor in accomplishing the first two.
No CEO works in a vacuum. The most important job of any president or CEO is being able to find, recruit and retain the right leaders for the team.
Over the past three years, I made two of the best hiring decisions of my career. In 2018, I hired seasoned financial executive Winston Wilkinson to join PenFed’s 11-member executive team and lead PenFed’s mortgage division. In January 2020, I tapped Ricardo Chamorro, a former U.S. Army intelligence officer and Harvard Business School graduate, to lead our consumer banking team.
At the time, I could never have known that those of us in the financial industry would be entering the toughest year of our careers, and that the right or wrong hiring decisions could elevate or devastate our credit union.
2020 was a “make or break” year for many Americans, and financial institutions played a key role in keeping millions of people financially and emotionally afloat. Last April, CNBC reported that COVID-19 was causing financial stress for 9 in 10 Americans. And an American Psychological Association study in October found that half of adults said they had experienced negative financial impacts due to the pandemic, contributing to the widespread mental health crisis that has continued into 2021.
Credit unions were literally lifesavers for many Americans over the past year. When banks tightened their mortgage standards, denying loans to many deserving Americans, credit unions did the opposite. Thanks to Winston Wilkinson’s mortgage strategy, PenFed, like many credit unions, chose a path of risk mitigation rather than risk avoidance. We accepted lower down payments and lower liquid asset requirements, based on individual credit profiles, so that Americans could still afford homes. As a result, our mortgage division originated $3 billion during the first quarter of this year – a PenFed quarterly record and 127% growth over 2020.
Ricardo Chamorro also had a winning strategy for consumer lending. Even though just months after taking the role when he saw American spending freefall, he predicted that the spending freezes wouldn’t last. He set himself a challenge: to reach new goals for credit cards and auto loans. He ended up saving hundreds of thousands of members money by allowing them to refinance their existing debt with lower interest rates. The consumer lending division originated $2.29 billion during the first quarter of this year, 40% growth over 2020.
What I love about leaders like Ricardo and Winston is that – like our core military membership – they push forward instead of holding back when times are tough. They also see the people, not just the profit; they understand that helping our members do better financially is how we, as credit unions, measure success. Every success we have within our credit union is also a success for real people outside our walls – the families of deployed soldiers; single parents working two jobs; couples putting three kids through college at the same time.
During the first quarter of 2021, PenFed had our strongest quarter in our 86-year history, surpassing $27 billion in assets and reaching more than 2.2 million members. While this success is a win for our members and our employees, one of the core tenets of the credit union philosophy is that it should also be a win for our communities. This is why we are proud to have donated nearly $1 million to charitable organizations during our first quarter.
I’ll take the credit for hiring Ricardo and Winston, but I won’t take the credit for PenFed’s record quarter. That goes to our more than 3,000 employees who looked beyond their own stresses during the pandemic in order to serve our members, and the division leaders who inspired them.