Tale of a Turnaround
Not that long ago, Communicating Arts Credit Union's future was in so much doubt that its board and CEO were actively searching for a merger partner.
With no takers willing to hand over their reins-a condition that CACU's board insisted on-the downtown Detroit CU kept working hard to introduce new products and services that might attract new business.
Among them, courtesy pay fees and blended rates on loans, both of which gave this $23-million CU the boost it needed to feel hopeful again.
"Our loans took off last year so much that we didn't know how we were going to fund them all," said CEO Hank Hubbard. Consumer and real estate loans rose to 18.5% in 2005, up from 11.4% a year earlier.
"Now, we're starting to see our assets grow," he said, adding that plans are in the works to re-open a branch that had been shut down for years after its primary sponsor, Detroit Newspaper Agency, went on strike in 1995.
His board would agree that it is Hubbard's passion for his work and the community he serves that has kept this small CU from being swallowed up in this competitive market.
It's a passion that has extended not only into a community of underprivileged teenagers, but into an underserved country.
For his 10 years of service to the National Academy of Finance, Hubbard has been selected as this year's Advisory Board Champion.
His efforts have included preparing teenagers at a nearby career center for entry level jobs in the financial industry-a task that he has admitted to failing at-for a good reason. About 97% of his students have gone onto college.
Recently, Hubbard and six of his students spent three days in New York where they visited Wall Street and the New York Stock Exchange.
They also got to meet with financial executives including the VP of Global Finance for Godiva Chocolateirs.
"A lot of these kids have never flown on an airplane before," he said. "Some have never even been out of the city."
Hubbard has also been given this year's International Credit Union Development Award by the Michigan Credit Union Foundation for his continued efforts in Macedonia.
His work is part of Michigan Credit Union's League's adoption in 2002 of the FULM Savings House in the Southeastern European country that lies north of Greece and west of Bulgaria. CU officials have made five trips there so far and have been host to
Elenora Petrovic, CEO of FULM, several times as well. (Hubbard took Petrovic on a tour of Detroit, included her in a staff training session on check fraud, and treated her to a Pistons playoff game.)
"My first trip was in 2003 with Drew Egan, President/COO of CUcorp," he said. "I didn't have any idea what I was getting into."
Hubbard said the pair spent much of first trip lobbying with government officials for credit union enabling legislation for their FULM Savings House, which was already operating in CU fashion with the help of the World Council of Credit Unions.
While the language barrier was a trial for the most part, Hubbard said, he and Egan had the privilege of meeting with the nation's president, Boris Trajkovski, who spoke English despite laws that prevented citizens from doing so.
"He was very interested to hear how credit unions were able to help people," Hubbard related.
Unfortunately, Trajkovski was killed in a plane crash a few months after Hubbard's second visit in October 2005, forcing Hubbard to start building that rapport all over again.
"Now they have all new faces, none of whom know what credit unions are," Hubbard said. "It's been very frustrating, but we can clearly see that they are receptive to talking to us."
Hubbard said one of the challenges with the system in place is that there are separate boards for the FULM Savings House association and its financial institution.
"The association board feels it can overrule anything decided by the savings house board," he said. "It came become really frustrating."
The system doesn't allow for checking accounts, only savings accounts and small signature loans, he said.
"Unfortunately, there's a waiting list for loans," he said, noting that most people need the money to purchase items help manage their farms.
Many lived in homes that are in partial state of completion as they have to save money for each phase of construction.
During his second trip, Hubbard said he conducted a training session that focused on staff and board development and strategic planning.
His group was also interviewed on a local television program as part of International Credit Union Day.
While Hubbard stayed in a modern Holiday Inn, the scenery reminded him of "What Russia is like in old movies," he said.
Most disturbing were the "gypsies," or bands of homeless families that begged.
While there was a lot of talk about how little money the Macedonians make, the city that he visited had an upscale mall that appeared to attract lots of shoppers.
The area is also served by a branch of the World Bank, but it operates more like a commercial institution than a consumer institution, Hubbard said. "They have no interest at all in lending people money for a cow."
Hubbard said he was especially impressed by the level of education of even tellers and loan officers. "They have master's degrees," he said, surmising that because jobs are so hard to find, the competition is stiff.
Hubbard said he has maintained contact with staff from FULM Savings House and regularly corresponds by e-mail with Petrovic.
Sitting behind the desk of his no-frills office, Hubbard said he loves his job and appreciates the impact the credit union movement has on average people both locally and internationally.
"I love so much about my job that it would be hard to pinpoint one thing," he said. "The fact that we're able to get out there and do these great things to help people makes me feel pretty good."