How 1 Small CU Is Offering A Full (And Online) Menu
Allen Selden gives God all the credit for his CU's successes.
Considering his place of employment, that's understandable.
As manager/CEO of WGM (World Gospel Mission) FCU, Selden oversees $4.5 million in assets for about 1,150 members-many of them missionaries who serve around the world.
Modesty and religion aside, Selden and his staff of three have to praise themselves at least for the physical tasks that keep the operation running smoothly.
That includes managing the basic credit union services such as checking and savings accounts, VISA cards and risk- based loans.
"We are doing an awful lot that credit unions 10 or 20 times our size aren't doing," Selden said. "I give the Lord credit. As we make our decisions and watch what we do, He's there guiding us and making that dollar stretch."
Selden said the biggest challenge, not surprisingly, is lack of financial resources to provide adequate staff and services. But, thanks to the many resources available to small credit unions, WGM has managed to stay competitive. That includes providing online banking services for members who are scattered all over the world.
"Our membership based dictated that it was a no-brainer to go into online banking," Selden said.
Online Services At Low Cost
With the help of Electronic Record Keeping Service of Indianapolis, Ind., WGM was able to get the computer system and the software that allows members to check their balances, make loan payments and transfer money at a cost to the credit union of just under $5,000.
"I know that other people thinking of going into online services have been quoted four to five times that," he said. "Those prices would put us out of the ballpark."
Selden said he thinks open communication is vital. "I guess we really focus on one-to-one communication," he said. "Every e-mail that is sent to us gets a personal response. And, while we do have voice mail around here, we try to-and pretty much succeed at-answer 95% of the calls that come in."
Selden said a recent survey showed that the volume of foot traffic from members who work at World Gospel Mission, where the credit union is also located, e-mail and postal service from members is divided equally.
Perhaps the biggest change-and the most successful, Selden said-was the addition two years ago of risk-based pricing.
"It changed our credit union dramatically," he said. "Prior to having it, we were not a viable player in the loan market. We were basically telling our best people to go elsewhere.and the people who really wanted and needed our services, we were saying no to them as well."
While WGM FCU also offers mortgage loans, there isn't much call for it, considering the membership base.
"Missionaries have to raise their own funding, which they do by traveling throughout the United States for about a year," Selden said. "Then, they spend about four years on the foreign field. They don't own homes."
He said the credit union is a big player in the five-year cycle. In addition to holding their money, the CU handles direct deposit of their paychecks. (Yes, missionaries do get paid from WGM, he said.)
In addition, the credit union provides them with VISA cards, a product many members would otherwise not be able to obtain.
"What we found was when the missionaries would go into a bank and ask for a line of credit or a VISA card, that would get denied," he said.
Why? "They've been living outside the United States and in a year, expect to leave again," he said of what are typically red flags of risk. "We know from working with them, they are some of the lowest-risk people around."
Difficulty In Delinquencies
Admittedly, when delinquencies do arise, collection is difficult, Selden said.
"Delinquencies and repossessions are next to nothing," he said, but when they do happen, Selden has to find someone in whatever country the member in default is in for help.
"That's where cooperating with other credit unions comes in handy," he said.
On the home front, Selden doesn't hesitate to reach out to the other CUs in the area for help. In fact, he is the VP of his local chapter of credit unions and heads up a group specifically for small credit unions, which he said has been one of the highlights of his four years in credit unions.
"We are dealing with things in like circumstances," he said. "We struggle with the same things. Like what do you do when the board asks you to put on that eighth or ninth hat?"
Selden said the Indiana league is also a big source of help for his CU. "One of the things that really attracted me to (the CU industry) was the cooperative spirit. Before I became staff, I was on the (credit union) board. I saw that instead of competing, credit unions help each other."
Prior to WGM, Selden said he wore many different hats over a 20-year period with the World Gospel Mission.
"I worked in the media center and helped missionaries put together presentations, I was a purchasing agent and in charge of the computer department," he rattled off.
Assets Not The Priority
While Selden would like to see the credit union grow, asset size is not a priority. "We would rather go slow and focus on member service than turn into a huge credit union overnight," he said.
Among the tools being used to help in that steady growth are quarterly newsletters created by an outside writer for $50, monthly statement stuffers and e-mail.
"We have developed a data base of e-mail addresses and to those members who have given us permission, we send our monthly special."
Selden said the product he hopes to add next and the one members are most asking for is debit cards. "I'm hoping to work that out in the next several months," he said, noting that the Indiana league's Service Corp. has a program he thinks will fit into his CU's budget.
If he could make any immediate changes, they would include making seminars more cost-effective for small credit unions. "I know our league has addressed this and that its small CU task force has a proposal on the table," he said.
That said, Selden said he couldn't think of anything about the industry to complain about.
"I am very happy right where I am at," he said. "I love the work. It's a joy to come in and help people save money and meet their financial objectives."