After 25 years at El Paso Employees FCU, 22 years of which he served as President/CEO, Ray Ponteri retired from the industry on Jan. 4th. Before he traded in his desk for golf clubs, Ponteri sat down with Credit Union Journal to discuss his time in the cooperative movement and how he took one credit union from the brink and turned it into a stable, $275-million institution.
Credit Union Journal: How did you first get into the credit unions?
Ponteri: I was working at the time as an accountant with the City of El Paso. I was asked to serve on the credit union's supervisory committee. I didn't know much about credit unions. I grew up in the Northeast, and to be perfectly honest I didn't know much about credit unions until I moved to El Paso in 1979, although I did belong to a credit union when I was in the Air Force. They financed my first car for me.
CUJ: Tell us about your career prior to that?
Ponteri: I moved to El Paso in 1979 as a VISTA Volunteer. I worked for a community service organization. The program operated food-buying clubs in the housing projects in El Paso. Residents would pool their grocery lists and buy bulk food at a lower cost and then would break it down to the individual orders saving people 10% to 20% on food cost. It was where I learned about cooperative efforts and I guess it helped prepare me for the credit union.
About a year or so after leaving VISTA I began working for the city and was appointed to the supervisory committee. The credit union at that time was small and, to be perfectly honest, not well run at all. If things hadn't changed I don't think it would have survived much longer. They were making bad loans, had few operational controls, and there was lots of internal fighting. After the manager was replaced a position opened for an assistant manager, which I applied for. I never thought I would be there for 25 years nor did I think it would be a great career move. At the time I had a wife and baby and was looking basically for more money. That was in 1984 and in 1987 the manager left and I was given the opportunity to take over. We were about $15 million in assets and had about a dozen employees.
CUJ: You've overseen growth in assets by a factor of nearly 14. What did the CUdo, and what did you do specifically, to help facilitate that growth?
Ponteri: We first cleaned things up. We tightened controls and got a hold of our lending operation. Fortunately our membership was receptive to the changes and responded favorably to the more professional image we were creating. I also began an annual planning process that did wonders for the political fighting that was occurring. The board and management were able to agree on goals. The entire organization began working as a team. The board accepted its role as a policymaking group and allowed management to run the day-to-day operations in compliance with its policies. We began growing and expanding. In short we started to do things right.
Our numbers over the years were great and the NCUA awarded us with CAMEL 1 rating for all but one year of the 22 years I was president. The board and staff have taken pride in this accomplishment. I have always been skeptical when I hear comments that if you receive a CAMEL 1 rating you are not really serving your membership. I have always believed that financial strength and stability is a major factor in attracting people to a financial institution. I think our success proves that.
We began expanding our field of membership to include other local government organizations and eventually changed our charter to a community charter. Because El Paso is spread out over many square miles we began aggressively building branches in different areas of town. In addition, we were able to improve and expand our services.
Today we are working to establish ourselves as a low-cost leader. We recognize that we cannot be everything to everybody, so we limit what we offer. Electronic services are more important today than branches and are far more cost effective. To stay relevant in our market we must reduce expenses by becoming more efficient in the delivery of our services.
CUJ: How has the industry changed since you first broke into it?
Ponteri: Our attitudes have changed and our core values are eroding. We seem to think that bigger is better so we can make more money. The NCUA would rather merge your credit union than help it out. If you make a mistake you will be merged into one of those multi-billion-dollar credit unions, which are too big to fail for now. NCUA's goals and the industry's goals are fundamentally not congruent.
When I started with the credit union there were over 24,000 credit unions. We had over 30 in El Paso. Now we have less then 6,000 and we have eight left in town. As an industry we are not creating new credit unions. In my opinion we are becoming less relevant as an industry with each consolidation. Even the trade associations are failing to provide the leadership necessary for the industry to expand because they have to chase the big dues dollars. Do we really think that when our numbers approach 3,000 credit unions nationwide that we will need a separate regulator, a separate insurance fund, or even a separate industry?
CUJ: What would you tell a young professional in this business or looking to join the cooperative world?
Ponteri: Over the years I had two credit union presidents that I considered mentors. One told me that the quickest way to get fired as president is to make bad loans or have bad accounting records. The other told me that something is only good for the credit union if it benefits 51% or more of the membership. I think both still apply today.
CUJ: What are you going to do during your retirement?
Ponteri: We are going to travel some. There are a lot of places in this country I haven't seen. I am going to play a lot more golf, read more and hopefully stay involved with my credit union and the industry as a volunteer.
