By Ray Birch
METARIE, La.–While Labor Day means a three-day weekend for many in credit unions, for a select group of others it means much more–a tie to their very reason for being–as well as some tough decisions around staying true to their charters.
Credit unions chartered to serve labor unions are among some of the oldest in the U.S., and many have remained true to those charters and not expanded their fields of membership–which can mean close ties to members but also sharp rides up and down with the economy.
Few know that better than Electrical Workers Local 130 FCU here. The 1,280-member CU was founded in 1955 to serve the local chapter of the International Brotherhood of Electrical Workers and has used the economy’s strong years to build reserves for when times are leaner, according to its CEO, Tina Venturella.
“Our members, despite some economic downturns, for the most part over the years have done well, so we were able to build up reserves and those have helped us during some lean times of late,” Venturella told CUToday.info.
While electrical work is a trade that has always been needed, the recession of a decade ago hit the construction industry hard, which limited the credit union’s members ability to find work, said Venturella.
But what really hurt the CU was the lower interest rates resulting from the downturn that reduced the credit union’s spread, and therefore income, as well as a big drop in its investment income.
‘Some Rough Times’
“When I took over here in 2012 we faced some rough times,” she said of the after-effects of the Great Recession. “We had to get through some lean years, but we are optimistic about the future.”
The credit union in the last few years has struggled to show a profit, losing a small amount of money each of the last four years.
In part, those struggles stem from a new reality for many electricians in a time of some extreme weather events.
“Our members sometimes have to travel to find work, going to other locals in other states,” said Venturella, explaining the member movement can often be related to working in areas where there have been natural disasters.
“And sometimes it’s better opportunities. We have quite a few members working in California—not related to the wildfires—and in Ohio. New Facebook facilities are being built in those locations and they need a big workforce of union electricians.”
The mobility of its membership has meant growth is not as strong as it could be, said Venturella. The CU’s assets have fallen from $5.4 million in 2014 to $4.8 million today.
‘The Big Issue’
“The big issue here is staying in touch with our members,” acknowledged Venturella, who noted the credit union does not offer online or mobile banking. “We have yet to be able to afford those things. So when members travel it can be difficult to communicate with them. It can be challenging. We use whatever means we can—email, fax, text, U.S. mail. But we truly make very personal efforts to do whatever we can for our members.”
On one occasion that meant walking a deposit from the credit union over to a competing bank so the member, who was traveling and needed extra money in his checking account at the bank, could buy what he needed in a different state.
“We did it,” said Venturella, who noted that the credit union does not offer a checking account. The CU simply offers savings and loan products. It also does not offer credit cards.
“We pride ourselves on our superior service. You won’t get this kind of support from another financial institution, and certainly not a bank. We knew that member was in a bind, so we took the time to make that deposit for him.”
No Plans to Expand
Venturella said it’s that personal service from the two-employee shop keeps members coming back. But she recognizes that they key to the credit union’s future is to bring the young electricians—who are following in their parents’ footsteps—into the credit union. She said she understands that growth opportunities are limited with the narrow FOM, as well as by the costs of expansion.
The credit union is located in the office of IBEW Local 130, on the third floor.
“It’s really an office more than a branch of a credit union,” she said. “We have a window for transactions. Our members like what we do, and they see us more like a part of their family—and that is how we treat them.”
Venturella said she has seen other labor union CUs in her town expand their fields of membership, but she does not want to follow their lead.
“Some started many years ago serving one group of workers and they have since expanded their field of membership to grow,” she said. “For us, I think if we did that we would lose our vision and purpose. We still like the fact we serve a small group of workers, which lets us really get to know our members and their families and serve their needs well.”