MECHANICSBURG, Penn.-If there is a lesson for credit union CEOs a generation from now who may have to lead their institutions through a recession, it is that such downturns prove the value of the credit union business model.
That's the argument from Robert Marquette, president/CEO of Members 1st Federal Credit Union here, as consumers have flocked to safety at the $1.65-billion institution despite the worst financial crisis since World War II.
"Our share growth has been phenomenal this year and this is something we didn't take into consideration when we made our budget this year," Marquette noted. "Credit unions have weathered [the recession] well by continuing to be that dependable provider of products and services."
Though Members 1st has tweaked its underwriting on some larger loan types and put off some expansion plans before the recent legislation was enacted allowing CUs to spread out costs related to corporates, the credit union has largely retained many of its policies and practices. That stability has led to soaring mortgage volume, while aggressive moves in the auto sector has boosted indirect lending volume significantly. Marquette credits the pullback by major banks in those segments along with a new and unique program for its market share gains.
"The lessons our dealers have learned is that we are that dependable source," the chief executive explained. "One of the things we did as an adjustment to take advantage of the turmoil in the sector is that we started a leasing program. For-profit institutions were getting out of it, captive auto financing arms were getting out of it or making the terms so onerous that they were basically out of it."
Piloting A Leasing Program
Members 1st has teamed with a pair of dealers to pilot a leasing program that has yet to expand to other dealerships from which it buys paper. Marquette said the CU plans to be "very selective" in offering the leasing option to consumers and the institution will "walk before we run" when deciding to expand the program.
For now, Marquette remains confident that the willingness to stick it out with members and business partners in a tough environment will pay dividends down the line.
"Even as other financial institutions come back into the market I think we'll continue to do well because of the relationships we've built in these trying times today," said Marquette.
