Headline 25-Year CU Veteran Shares Insights As He Prepares To Retire

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SHELTON, Wash.-Joe Robertson, CEO of Our Community CU for the past 25 years, will retire Dec. 31, noting he is ready to finally take it easy.Robertson's long career with the CU began in 1975 when he was hired as a collection officer for what then was known as Simpson Employees FCU.

Robertson has been active in the Washington CU League. Under Robertson's leadership, Our Community CU has grown to more than $200 million in assets from $31 million during his career, and now serves 22,000 members in Mason and Grace Harbor counties on the Olympic Peninsula, west of Seattle.

Credit Union Journal: Talk about some of the developments you've seen in your 25 years at the helm of Our Community CU?
Robertson: We are in Mason County. The population of the county is 60,000. We also service Grace Harbor County, where the population is 75,000; so about 135,000 between the two of them. We are a couple of long traffic jams away from Seattle, but then we can get away from it and go back home if we want to. For most of my tenure we have been timber-based-a timber mill and logging employees credit union. In the middle 1980s, just before I became president and CEO, Simpson, which was the largest privately owned company in the state of Washington, reassessed its business. We expanded our field of membership, first with four employer groups, to begin to diversify as Simpson was not going to be hiring as many people in the future.

In the 1990s we began using a geographic area to define our field of membership by adding three school districts. We were continuing to diversify away from the logging industry. In 1997 we added Grace Harbor County. In 2003 we changed our name from Simpson Community Credit Union to Our Community Credit Union, because people still assumed they needed to work for Simpson to join the credit union, despite the word "community" in our name.

This year we are in the process of converting from a federal charter to a state charter for field of membership purposes. Our two counties have enough commonalities that we were allowed to serve both of them, but we cannot expand any more. We want to pick up Olympia, which is in another county, and were told no. We will never abandon Mason County or Grace Harbor County, but we would like to further diversify and grow our loan dollars.

CUJ: What is the biggest difference between running the credit union in 1985 versus 2010?
Robertson: When I look at that whole 25 years in terms of threats to the credit union or opportunities that are available, the biggest differences are technology driven. Back then, we did everything in a much more laborious way.

There was less competition back then on lending-in 1985 dealers might have two or three lenders that they worked with. Today, with geographic barriers coming down due to technology, there is much more competition. Point-of-sale financing is everywhere-people can get consumer loans or make durable goods purchases anywhere. Even for laser eye surgery!

A big difference is an attitude change by consumers. Not withstanding this recession...consumers today are much more willing to make purchases, whether they can afford it or not. People also are more willing to declare bankruptcy than they were back then. It is easier for people to get into financial trouble, and then get out of that trouble through bankruptcy.

Another change is because there are so many players, the lender that charges the lowest rate drives the competition. If your rate is not in the same ballpark, you can't get the loan. So it is difficult to price due to risk. You have to keep cost of funds down because you can't charge more than the bottom of the market for the best borrowers. And then there is the subsidized lending offered by auto manufacturers, which is very difficult to compete with. You still get together the ALCO committee and the board of directors to discuss rates on loans and shares, but you don't have as much control as you used to.

In 1985 there was the beginning of the proliferation of credit cards. That's when mass mailings started, and the top seven issuers began controlling 90% of the market. It got to the point anyone who could fog a mirror could get a third, fourth or fifth credit card. That allowed some people to get into trouble. A credit union would make someone a loan and things would be fine at the time, but 12 months later they would be overextended because of all their credit card debt and then declare bankruptcy. Our risk is increased, but we can't do much about it. In the old days a member would come in and ask about a boat loan. We would sit down with him and say, "You have your house payment, and two car loan payments, so it is not a good idea to add a boat payment on top of that. Maybe you should wait until next year." It used to stop there-we would give the advice and people would forget about it and go home. Today, they go to a boat show the following weekend and get financing on the spot, so they buy the boat.

CUJ: What elements of running a CU have not changed in 25 years?
Robertson: Our brand is the same, and it is recognized in our market as providing a high level of service; very personable service. People trust us, they feel comfortable, we are seen in the community being active and we are caring.

About 45% to 55% of new members are referred to us by existing members. We have a call center with real human beings answering the phone. My phone number is available to members. All of our numbers have gotten bigger-we went from $30 million to more than $215 million, two offices to six, 30 employees to 85-but the way we treat people is still the same. We give personal, caring, professional service.

We allow people to talk to a teller and speak to a person on the phone to differentiate ourselves from the competition.

Our capital is down a little bit, to 11%, but its down mostly because of the money we've had to pay out due to NCUA assessments or the failure of WesCorp. I believe in holding on to capital. It helps the credit union compete and expand.

Unemployment in our counties is high because the area is tied to timber and timber is tied to construction. The recession is hurting our lending, so we are down to 55% loaned out. We used to be 105% loaned out in the 1970s and 80s. With field of membership expansion and a charter change we expect to get it back up to 75%.

CUJ: Do you see credit unions taking advantage of public distrust of banks?
Robertson: It depends on the market the credit union is in and which consumers it is trying to compete for. In Seattle there are many more people than in our area and much more competition, so it is difficult to get the message heard. In our area people want to drive to the credit union, park in a lot without a fee and go into the credit union. In Seattle the lifestyle might be that people don't want to go to a brick-and-mortar branch.

One thing we did well is we told people what was going on as Bear Stearns, IndyMac and Washington Mutual were failing. We sent out letters to head off rumors that we might be in trouble because all these banks were failing. This had a big impact. People thanked us for sending them a personal letter with facts to reassure them. It worked tremendously. In the past couple years at least 1,000 people have thanked me personally for sending them a letter, and they thank my wife when they see her. People say, "That's why I bank with the credit union, because the credit union cares."

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