WILSONVILLE, Ore. - Despite the many challenges facing credit unions, the retired president of the CU Association of Oregon Geme Poitras believes the cooperative model will continue to thrive.
Poitras, who became OCUA CEO in 1992, is ready to relax and hit the golf course, now that the league has names Troy Stang as his successor (see related story), but he admitted to CU Journal that he still keeps tabs on the numbers.
Poitras shared his views of the CU movement and how it has changed over the past four decades.
CUJ: Recap your credit union career–what was your first job? Your major positions?
Poitras: I was a volunteer board member for Farmers Insurance Group Credit Union, a small credit union in Portland, [Ore.] starting in 1969. I became chairman of the board a few years later, and was chairman for three years.
From there I moved to the league. Oregon at that time had an insurance trust that essentially competed with CUNA Mutual, and I ran the insurance trust. Later, I was vice president of the league’s service corporation until 1992, when I became president.
CUJ: What are some of the biggest differences in CUs then versus now?
Poitras: There a lot of things that were really different. There were no checking accounts back then, no share drafts and no credit cards. Credit unions paid 6% on deposits and charged 12% on loans. Credit unions did not have a loan officer–loan decisions were made by a credit committee. I actually started on the board’s credit committee. We met weekly, usually at lunch, unless there was some sort of emergency. Credit committees went out of vogue in the 1980s.
Credit unions back in those days were not as complex as today. There have been a lot of regulatory things that have come into play that have made a small credit union difficult to run. One of the hardest things there is to do is be a small credit union CEO. Back then, accounting was straightforward and reporting was not as complex. The regulators still came in to do their annual exam, but it was not as complex as today.
One of the biggest changes was the addition of share drafts. Another was the addition of lines of credit–every time members wanted money, they no longer had to come in and apply for a loan.
Credit unions have evolved significantly. Technology obviously had a lot to do with it. When I started there were ledger cards and bookkeeping machines, and everything was done by hand. Today, young people don’t even go into the brick-and-mortar branch, they do everything over the Internet.
Today, credit unions do pretty much anything other financial services institutions do.
CUJ: What are the biggest challenges facing CUs today?
Poitras: Some of the biggest are keeping up with technology. Some of the competitors credit unions are facing today are different from 30 or 40 years ago. If credit unions don’t stay on top of technology today and understand what members expect from financial services, they are going to fall behind. That is a huge challenge.
I think we are going through a sort-of-recession right now. Asset liability is pretty volatile because of uncertainty in interest rates. Credit unions mostly were not involved in subprime lending, but their members were and that is having an impact. I still look at the numbers–I can’t get away from it–and I see delinquency rates rising. Technically, it is not a recession, but we are going through economic challenges.
Now that credit unions have expanded into community charters, there are going to be high expectations of what they will contribute to the community. There will be community responsibilities we have not had to face up to in the past. Now that we are a player in the community, there will be expectations. I think credit unions are doing a good job in that aspect.
Regulatory and legislative challenges are never going to go away. Credit unions were created by an act of Congress, and they can be hindered by future acts of Congress. The bankers are never going to go away, so it is important to educate lawmakers on a state and federal level as to the credit union difference. It is going to take some time to expand member business lending and lending caps. Regulatory relief is something we really need to continue to work hard on, because they are something that will help credit unions grow and serve their members into the future.
CUJ: Will CUs continue to be successful? Why?
Poitras: I think so, definitely. The cooperative model is still viable. I think credit unions are learning how to use it to their advantage. One reason why some credit unions have grown so large is they do a good job for their members. They have been around for a long time, but they grow because they provide good service. The banks are always pointing out credit unions have gotten big, but they are because they provide good service, and they haven’t been bought out a number of times like the banks have.
CUJ: What are you doing today, besides golf?
Poitras: I’m working with Merger Solutions as an adviser. Also, I’m working in an advisory capacity for Brookwood Capital out of New Hampshire. They work with credit cards. One of my biggest concerns as a league president was the consolidation of credit unions. When I started, there were 254 credit unions in Oregon, now that number is down to the 80s. I want to make sure mergers are done right, and for the right reasons.
