CHICAGO-A group of small, faith-based credit unions here has banded together to provide one another with networking and guidance with the aims of growing business and improving CAMEL ratings.
About 20 CUs make up the Faith Based Credit Union Alliance, with an average of fewer than 300 members each and assets around $500,000. Joyce Jackson, who oversees the group as a regional director for the Illinois CU League, explained that the group came together as a result of struggling loan portfolios and the bad economic conditions.
"With the economy the way it is and most economists saying that things aren't going to turn around in the immediate future, they felt they needed to come together" and figure out how move forward, build their books of business and cover expenses without eating away at their net worth, said Jackson.
While most of the CUs average around 16%, the group's goal is to ensure that all participants get their low-income designation from NCUA in order to apply for funds from agency, which can be added to other CDFI funds to facilitate programs in their communities. Some of those programs are being funded via grants from the Illinois CU League Foundation. Other objectives include working to increase loans, find investment opportunities, grow memberships and raise CAMEL ratings.
All of the CUs are single-sponsor institutions that are based in their respective churches-a mix of Methodist, Baptist, Catholic and other denominations-and the group meets at a different church each month. Among the initiatives the group has undertaken so far are working with an economic development specialist from NCUA and establishing an internship program that hosted six students from a local college. Many of the association's CUs lack a web presence, said Jackson, and one of the interns' accomplishments this summer was creating a website template that the CUs can use in order to establish an online presence.
Looking To Create Service Center
Because the CUs work out of their churches, the group is also trying to cobble together the funds to open a service center that can accommodate members from all 20 CUs and offer more services and longer hours than the individual facilities currently provide.
The CUs' low assets and membership numbers might make one think these CUs were potential merger candidates. But Jackson stressed that with strong net worth and member bases that can be tapped into further, mergers are unlikely at this point-and that's the way they like it.
Hiram Crawford, a board member at 230-member Israel Methcomm FCU, emphasized that merging is "the last thing we'd want to do," and said that maintaining these CUs' independence is "one of the major purposes that keeps us together."
Crawford's wife, Joronda, also a board member at Israel Methcomm, said the networking is paying off. Since the group first came together last year, Israel Methcomm's net worth has risen from the 8% range to 11.37%, and its CAMEL rating has also improved.
"When you network, you come up with other ideas, and I think it helps others," said Joronda Crawford. "The sky is the limit."
