Expansion Plan Includes 'Advisory Council'

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Andrews Federal Credit Union has a slightly different approach in deciding where it will expand: it seeks "communities that we believe in."

To that end the Suitland, Md.-based credit union is expanding into Washington, D.C. with plans for branches into a number of lower-income communities.

And although it's best known for the Air Force Base that is its namesake and the home to Air Force One, AFCU's CEO Michael Hale said reaching out to lower income individuals will not be something new for Andrews FCU, which has 92,000 members.

"For the most part, we serve people of modest means," he told the Partnering And Leadership Successes (PALS) conferenc. "Think about it. If you're serving airmen and soldiers, you're serving people of modest means. What we determined was 'Why not take that service further? Why not take a mission that has great value and share it."

Hale, who said the Andrews FCU mission statement is "to have a passion for service, for safety and soundness," said the credit union strives to help people of modest means to improve their lives.

"But you can't expect what you don't inspect," he said, pointing to a relationship pricing program AFCU has put in place. The reason, he said, is that a credit union is a cooperative, and "to get some, you've got to bring some." AFCU also uses risk-based pricing on its loans.

Andrews FCU, which also operates branches in Europe, now serves anyone who lives, works or worships in Washington, D.C. "When you reach out, we believe that it's important that the community is one that you actually believe in; one that is part of your core purpose and organization. The challenge is in that some go in wanting to 'skim,' and take those who have higher incomes. The real notion is to go in and serve those who need us. The other thing is that as we've gone into Washington, D.C., it's very important to understand what's common about the mission of the city and Andrews FCU. No. 1 is financial literacy. We recognize, though, that we cannot provide all of those services by ourselves, so we have also developed a relationship with BALANCE Financial Services to augment the services we bring to financial literacy training. You can't do it all by yourself. The thing we're learning to do is leverage other relationships, and that has nothing to do with size. I believe that we as credit unions ought to aggregate the types of services that are out there for our members."

Hale said Washington is too large a city to take on in one bite, so it is doing so in pieces, first by identifying the area of the city that needs it most. It has renovated a building and hired out of the same community into which it is moving. He added that one "thing we want to do is not to assume we know what the community needs. So we have formed an advisory council in that area, and we plan to do the same thing in every region we open a branch in. We plan to open multiple branches in the city."

"When we decided we wanted to expand our FOM in this way, we did a cost analysis and concluded it would take five years. The reality is it will take more like two years," said Hale. "None of the services you will offer will be new. What will be new is how you deliver those services."

Hale acknowledged that Andrews Federal spent some time seeking to find itself. "I know some credit unions have had grandiose mission statements. But a mission statement has to be who and what you are."

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