By Ray Birch
WILKES-BARRE, Penn.—Joseph Gimble recalls the long work days, the weekly negative news stories about his credit union, and the members leaving in droves–including many who opted to leave and not pay on their loans.
That was the situation just three years ago when Wilkes-Barre City Employees FCU was struggling to climb back to respectability following a highly publicized fraud case in which the former manager, Jim Payne, committed suicide from a self-inflicted gunshot wound on March 10, 2014. That was the day before his scheduled testimony in front of a federal grand jury regarding a corruption investigation of the institution by the FBI and the Pennsylvania State Police.
As CUToday.info reported, later that year five CU members—including the CU's assistant manager—were indicted on fraud charges. The five individuals were charged with conspiracy and bank fraud related to a scam to obtain loans with false collateral and stolen identities.
Into all of that walked Joseph Gimble.
Gimble, the new CEO at the now renamed Citymark FCU, said turning around the credit union under those circumstances was difficult. But today, the CU has recovered from the days of a 22% loan-to-share ratio, 22% delinquencies, several Letters of Understanding and Agreement from NCUA and a CAMEL 4 rating. Today it boasts a 100% loans-to-share ratio, .08 delinquencies and ROA of 1.79%. Membership growth, too, has turned around, improving from -13.04% in 2014 to 7.18% in 2016 and 2.22% last year.
“It was not easy. I had many, many 15-hour work days and I got a lot of gray hairs,” Gimble told CUToday.info.
Gimble said when he took over following Payne the credit union was a “mess.”
“When I came here we had nothing—no policies, no procedures, nothing. We went from being a CAMEL 1 to a CAMEL 4 credit union overnight. Everything went bad,” he said.
Not only was the credit union a wreck internally, it also faced a growing number of members who were not paying their loans. Gamble explained that the fraud case with Payne involved a loan scam that included false signing of loan documents, and that some members took advantage of the situation and claimed they never signed their loan papers.
Members Take Advantage of Predicament
“That first year I took over we probably charged off a million dollars in loans because a lot of members jumped on the fraudulent loan scam news,” said Gimble. “There was nothing we could do to prove they didn’t sign their papers, and we could not afford another negative news story about us in the papers, so we charged-off the loans.”
The problems didn’t end there. One year later in 2015 the credit union found six days’ worth of member transactions that had not been posted under the old regime.
“A total of $100,000 came out of people’s accounts and they got mad at us all over again,” said Gimble.
But the credit union has come back, said Gimble, by slowly building back member relationships backed by friendly, skilled employees, and dedication to providing members with the services they need.
“We came from a period in which everything was working against us,” said Gimble, noting the image problem the credit union had to work through. “Our core system was old, so we had to move to a new one, which has helped a great deal in adding new services. We had no home banking and certainly no mobile. Debit cards were not online, and we did not have bill pay or remote deposit capture that members demand. We have all of these services now.”
A Different CU Today
Those new services, said Gimble, have done a lot to let members know the credit union is different today, changed, and not connected with the problems of its past.
“They saw the new products, how they were treated by staff, recognized that we were skilled and began telling their friends,” said Gimble. “Serving the local police and firefighters has helped, as they can be very loyal if you treat them right. And they tell their coworkers, friends and families about you if you are good.”
Citymark expanded staff from three to seven people, and all employees are universal. That has helped the credit union make more loans.
“With everyone able to write loans, we made more of them. We just got down to the basics in the past few years, talking to members about their situations, offering great loan rates and letting them know we can do better for them,” said Gimble. “We simply went hardcore, spoke with everyone who came into our lobbies. We did not advertise at all. For example, we would say, ‘We saw you drive to the credit union. We know you have a car, so let us help you with a better loan rate.’ We became very aggressive. Nothing fancy about it.”
What Examiners Like
Having universal staff also pleases the examiners, noted Gimble. He said that there is a great deal of overlap in responsibilities today, with at least three people responsible for specific business areas. As numerous experts have stated, poor internal controls where duties are controlled by only one person frequently leads to fraud.
Gimble admitted that in the beginning it was difficult to see a way out for the credit union. He said having capital near 13% in 2014 likely helped the CU avoid a forced merger and also gave it the ability to add new services.
“Sometimes I said to myself are we ever going to get this done, is there light at the end of the tunnel,” recalled Gimble. “But my staff have been great. They are great to work with, give 100% and have been dedicated to turning around our situation. I would always tell the team, ‘We’ll do this together,’ and we did.”