RALEIGH, N.C.–One of the best-known and successful partnerships of its kind in U.S. credit unions, that between Local Government FCU and State Employees Credit Union in North Carolina, is about to change, with LGFCU announcing it is “exploring steps” to operate independently of SECU and to directly serve its membership.
The unique relationship has its roots in a 1970 Supreme Court decision that required SECU to expel local government employees from its field of membership. Saying it would “not be deterred” and seeking to “preserve access to affordable financial services for these employees,” SECU assisted LGFCU in obtaining a federal charter in 1983.
“At that time, LGFCU and SECU entered into an agreement where LGFCU members are served through SECU’s branch network and contact center, while SECU also provides much of LGFCU’s operational infrastructure,” the credit unions explained in a statement. “This remarkable relationship has proven quite valuable over the years, and today LGFCU serves nearly 400,000 members and is quickly approaching $4 billion in assets.”
‘Natural & Mutually Beneficial’
However, despite the success, the credit unions said their respective boards agreed the decision to explore making the change is a “natural and mutually beneficial step toward ensuring the best interests of both the LGFCU and SECU members, now and into the future.”
“Believe it or not, becoming operationally independent from SECU was contemplated in LGFCU’s early days,” said LGFCU CEO Maurice Smith. “LGFCU is now well-suited to consider this transformative journey toward independence. We have a very exciting future – serving our members directly through our own delivery channels and offering a suite of products and services targeted to meet the specific needs of our membership.
“Our relationship with SECU has demonstrated the cooperative philosophy in action,” Smith continued. “SECU has been a tremendous partner in not only encouraging and supporting LGFCU from the beginning, but also recognizing and supporting our new vision.”
The $3.576-billion Local Government FCU has approximately 395,000 members.
‘Support New Direction’
“While it’s been a privilege to serve LGFCU’s members over the years, we fully support LGFCU’s exploration of this new direction,” said SECU CEO Jim Hayes. “These discussions are an acknowledgment of decades of hard work by both organizations to better serve the interests of unique fields of membership. I’m excited that LGFCU has the opportunity to control its own destiny. This decision by LGFCU’s Board will also allow SECU to focus on enhancing our value proposition to our membership.” Hayes added, “Together, we have created major and sustainable impacts on the lives of countless North Carolinians. We will continue to do so, but perhaps in a different business model.”
The $53.1-billion SECU has nearly 2.7-million members.
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