SOUTH AUGUSTA, S.C.-While many credit unions are citing the advantage of being conservative in the current economy, at least one CU has learned it can pull too hard on the reins.
When a major employer in its market cut its workforce in half, SRP Federal Credit Union went into an ultra-conservative mode out of fear. It's a strategy that CEO Ed Templeton still regrets.
"We basically stopped our credit union engine from running because we were afraid. Worst decision we ever made," he told Credit Union Journal.
The toughest internal challenge when cutbacks are being made is managing employee morale, Templeton said, but SRP FCI made its best effort after taking some time to re-evaluate its position following a hasty reaction to the regional layoffs. After deliberation the credit union decided to be bold and forge ahead with its long-term plan.
"We have watched our spending but what we haven't done is lay off any people; we haven't pulled back on any of the facility expansion that we are doing," he said. "And, consequently, our staff is pumped, they are excited and they are appreciative that we are willing to invest in them."
South Carolina's economy has been reeling from unemployment higher than the national average, but that has been a trend for some time — which gives the credit union a firm platform from which to work. With home values remaining relatively stable, SRP has been able to weather the storm by sticking to what has worked in the past.
Volume Is No Substitute
"There is no substitution for good decisioning, no substitute for good lending, and you can't make it up on volume. We have not been plagued by a lot of the extreme lending program that other institutions had," he explained. "We pretty well stuck to the sound tenets that have been the foundation of the loan business for many, many years. Conservative lending is a tried-and-true method of staying in good financial shape. When you try to push and find creative ways to lend money it comes back to bite you."
