RALEIGH, N.C.–Three years after launching a partnership, two credit unions in separate states are reporting they and their members are each seeing the benefits.
In 2018 North Carolina-based Local Government FCU and Tallahassee, Fla.-based Florida A&M University FCU partnered with a goal of improving services to their members by collaborating on strategy, governance and operations.
The $2.8-billion LGFCU has more than 360,000 members, while the $23-million FAMUFCU has more than 3,100. But the two CUs said the story is about much more than the difference in asset size, as FAMFCU is a minority depository institution, while LGFCU is not.
“Our credit union faced daunting financial, operations and compliance hurdles,” said FAMUFCU CEO Sheilah Montgomery. “Our assets were not growing. Membership was stagnant. Regulatory pressures were increasing. 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 said it approached LGFCU with the idea of an interstate collaboration.
‘Philosophically Instinctive’
“A cooperative collaboration with another credit union just felt philosophically instinctive,” said Maurice Smith, LGFCU CEO. “We began this relationship with the idea that our memberships have more in common than our differences. This is not a one-sided engagement. We sought an opportunity to help each other.
“It would be hubris to believe that large credit unions cannot learn from small institutions,” Smith continued. “We intended both organizations would benefit from this relationship.”
According to the two organizations, since the partnership began, FAMUFCU has grown, its regulatory concerns have been greatly mitigated, its capital has risen, operational costs are lower, and member services have improved.
Recognizing the importance of serving its community, the City of Tallahassee recently awarded a large grant to the FAMUFCU, the credit union reported.
Lamenting Mergers
In pointing to the success at FAMUFCU, Smith said he laments the mergers taking place within credit unions. “When industries consolidate franchises, members often lose the dignity of local control, close participation in governance and a corporate identity that reflects their neighborhood,” he said. “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.”
Added Montgomery, “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.”
Support From National Leaders
Two other national leaders also issued statements in support of the partnership and its results.
- “I’m proud that both credit unions are members of AACUC,” said Renée Sattiewhite, president/CEO of the African-American Credit Union Coalition. “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.”
- “The teamwork of credit unions is not unusual in our movement,” said CUNA CEO Jim Nussle. “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.”