Horse Sense

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For most credit unions, this would have been considered an odd request. But here in Geauga County, where automobiles share the roadways with wagons pulled by four-legged creatures, it made perfect horse sense.

"We got a call from a man wanting to know if we would honor our auto recapture rate for his horse and buggy," said Lisa Briggs, office manager at Geauga Credit Union. "He said it was his only mode of transportation."

The credit union was happy to oblige.

In this and other communities across the country where tradition and religious beliefs conflict with modern technology and new laws, several credit union leaders are working to create comfortable compromises.

This is especially true in areas of Pennsylvania, Ohio, Missouri and Indiana where both Old Order Amish and Old Order Mennonites still shun technology. Many call themselves "Plain People" who live according to the Bible and interpret scripture as a sacred command that tells them they are not to be "conformed to the world" (Romans 12:2). While there are variations in their beliefs depending on their sect, for the most part, they shun modern conveniences such as automobiles, electricity, television and computers. Most use horse-drawn buggies as their main mode of transportation and will not allow themselves to be photographed as they consider them "graven images."

It's a challenge for financial institutions that must adhere to strict regulations about member identity, particularly in this age of terrorism and international security, but not impossible, say those who serve them. "Let's face it," said Larry Miller, CEO of Mennonite Financial Credit Union, which serves Mennonite, Amish, Brethren in Christ and related Anabaptist groups. "Most of the Amish do their banking someplace. Obviously, banks are serving these people, too."

Mennonite Financial, of Lancaster, Penn., has $67 million in assets and seven branches, five in Pennsylvania, one in Kidron, Ohio and its newest in Sarasota, Fla.

Miller and other CU leaders said the government regulations are not so rigid that they don't allow for other "creative" means to serve people who don't have driver's licenses, photo identification or Social Security cards, for example.

"The procedures allow for other means of proving identity," Miller said. Among them, employer identification, credit reports and birth certificates.

Even without tax identification numbers, Miller said, his credit union will loan money.

"For our Old Order Amish, there is no church and they really don't have a denomination office," Miller said, explaining that they generally congregate at each other's homes. "If they have relatives who are members who can verify that they are who they say they are, we accept that," he said.

The same holds true at Geauga CU where even strict Bank Secrecy Act standards don't get in the way of serving the most conservative of members.

"When the government came out with the privacy act with all its identification requirements, we decided that as long as the person could provide us with a birth certificate or a Social Security card, they could become a member." If that's not enough, she said, many in the Amish order are employed by the CU's SEGs or related to long-standing members who will vouch for them.

To decrease his CU's risk, Miller said, Mennonite Financial requires backup withholdings. And, for those members who might not qualify on their own, the CU created an unsecured congregation-backed loan for up to $50,000 that allows a congregation to co-sign or provide some kind of accountability. "The examiners used to give us a hard time about that one," he said. "But it's worked well for us. It's very heavily used in the Amish community."

Geauga Credit Union, with just under $20 million in assets, has a Horse & Buggy loan, which means that a member's horse and buggy is held as collateral against money borrowed.

Vera Ruldolph, loan officer at Farm Bureau Credit Union's branch in Wakarusa, Ind., said she has found that most of her Old Order Amish and Mennonite members will concede to getting state photo identification to avoid hassles.

"They are finding that they need it in so many places," Rudolph said, adding that it is not a requirement for joining the CU. "We do require two forms of ID such as a birth certificate, a Social Security card or a paycheck. Even a school record or a work card that indicates they are the person they say they are will work."

The three CU leaders said they provide loans to many Amish-owned businesses, most of which are very successful.

"What really amazes me is how these people with no more than an eighth grade education are running multi-million dollar companies," Rudolph said.

In her rural area where both Amish and "English" commingle, Rudolph said, her Amish and Mennonite members tend to put all of their money back into their businesses or invest in other businesses.

"We never see much of any money sitting in savings or CDs," she said. "If they are not investing it, they've loaned it out."

In the more than 10 years that she has been approving loans for Farm Bureau CU, Rudolph said she's approved loans for her Amish and Mennonite members to purchase everything from farm equipment and construction supplies for a new duck house to new horses and buggies and homes.

Rudolph said the Amish community also has its own bank that offers loans to its own members at rates "a little higher" than CU rates, she said.

In Lancaster, Miller said, many of the Amish, in particular, are using their profits to purchase the area's high-priced land. "If they're not moving out (a trend of recent years), they are buying land that they can pass on to future generations," he said.

Miller, who has worked with this unique field of membership for 15 years, said he appreciates the differences and is happy to accommodate these members in every way possible. That includes the simple courtesies such as providing hitching posts outside branches in Pennsylvania and Ohio and bike racks in Florida where members prefer three-wheelers as their main mode of transportation.

The CU's loan portfolio that has grown by more than 20% annually for the past three years is proof Mennonite Financial's methods work. Its loan ratio is typically between 105% and 110%, Miller said, with delinquencies at .7% and actual loan losses at .1%.

Like most financial consumers, this unique field of membership utilizes everything from checking and savings accounts, and business loans.

"And surprisingly, we have a few that had credit cards and some that take out ATM and debit cards," Briggs added.

While the Amish generally are not allowed to drive cars, those who don't travel by horse and buggy or three-wheeled bicycles, use private drivers or taxi services to get to and from the credit union offices. And, while they don't have phones in their homes, they do have access to phones strategically placed in booths at the edge of their properties.

"If we need to reach them, we just have to leave messages and wait for them to call back," Miller said. That said, many of the Old Order Amish and Mennonite business owners have been given the OK to carry cell phones.

"And, interestingly, these Amish-owned businesses cannot have computers but they can hire computer book-keeping services," he said. "So they still use online services to manage their bank accounts, they're just doing it through third-party vendors. They're finding unique ways to use technology."

Briggs said her credit union's biggest challenge is reaching the Amish via advertising. "We don't have a county paper, a county TV station or a county radio station. In the past, we've used direct mail. Sometimes we get a decent response."

To be honest, she and Miller agreed, most of the members come in via word of mouth. "Amish communities are connected through relationships," Miller said. "We can tell by our activities as all of the sudden we'll get a lot of calls from a certain community."

Miller said his credit union relies on church trade publications. It also attends area trade shows for Amish woodworkers, and advertises in area trade publications aimed at Amish businessmen.

FBCU of Goshen, which has $375 million in assets and 40,000 members, reported it has had success using similar media.

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