WASHINGTON-The credit union spirit of people helping people, which Evan Clark first spotted 27 years ago, will not have disappeared in 100 years. "I think the service that we provide members and the personal touch will be there," said the CEO of the $220-million Department of Commerce FCU here. "That's the basis of the credit union movement and I don't think we'll ever lose that."
Clark first came to the CU movement 27 years ago while working in the Peace Corps in the Commonwealth of Dominica. He said he will never forget the 10-by-1 CU made of corrugated steel that was run by two 25-year-old women. "This was a $10-million credit union that existed because the grapefruit and banana farmers couldn't go over the big mountain every day to get to Rouseau and deliver their money. So this credit union did it for them. That kind of spirit is not going away."
But what will need to change, said Clark, whose credit union has a robust 1.50% ROA, is that the CU industry will have to become much more efficient and use capital more effectively. "This has to be done for us to succeed. The average credit union has an efficiency ratio of 80%, compared with 50% for the average community bank, and 30% to 40% for the money center banks."
A continuing migration toward electronic banking will improve efficiencies, said Clark, who predicted that will reduce the need for branches. "But brick and mortar locations will be there, just not as prevalent," he offered.
