DAWSON, Minn.-Despite the tough conditions in rural Minnesota and the shrinking population in the counties Dawson Co-op CU serves, the $53-million credit union has deployed strategies to keep going strong.
Even as the population of Big Stone, Chippewa, Lac Qui Parle, Swift and Yellow Medicine counties is on the decline, the credit union that calls these counties home is still topping the Return of the Member rankings established by Washington-based consultancy Callahan & Associates.
"We've always been in there, we've always been strong in loans to assets," said CEO John Nevis. "If you can control your expenses and loan out money, I think you're going to rank pretty good in return of the member."
With the cost of fuel skyrocketing, the cost of running huge pieces of agricultural machinery is likewise soaring. But the prices of food, coupled with strong demand and subsidies for corn-based ethanol, is enough to keep farmers eager to take out loans to pay for tracts of land, machinery and other operating costs.
"One of the advantages we have is that we're in a small, rural market and the lending demand is strong. About 50% of our loans are in agriculture," Nevis said. "The expenses for the farmer are high too, and we're always depending on the weather, but our members seem to be doing well."
Though Dawson has only about 3,100 members, the five counties in which it can garner members has a total population of 50,000; leaving Dawson with a decent-sized chunk of the market. Dawson has had to do very little to bolster its lending-the credit union does no indirect lending at all-and is still able to offer a better savings rate than the competing banks.
"I think the relationships get to be stronger and the loyalty is better. I don't know if we do anything special," said Nevis. "As a credit union we expect to offer better than market interest rates. Our certificate and savings rates are generally a point above the competition. It kind of sells itself."
Remarkably, Dawson continues to grow at a rate of 10 to 15% a year, Nevis contends, even though the population of central rural Minnesota declines.
"In the Midwest and these small rural areas, we keep losing population. When the kids graduate high school they don't stay here," Nevis pointed out. "We try and get them while they are still high school age and we try to get them with checking and debit cards and do some student loans."
It is through the aggressive pursuit of the youth that Dawson is able to grow. Once teens develop the relationship with the credit union in high school, many continue to stick with the CU after graduating and moving on to college or simply leaving town. Nevis said that he spoke with a staffer at a nearby bank who told him that his board accepts the idea that there is no chance to grow.
"What kind of statement is that?" Nevis asked. "They just accept the fact that they are going to shrink, and we certainly don't do that. If we're shrinking, we're hurting."(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
