Working To Raise The TIDE

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Serving the underserved often is viewed as simply meeting the financial needs of a geographic area or population segment lacking credit union services.

But it can also be a growth strategy, allowing credit unions to move into new, untapped markets. In the case of Suntide Federal Credit Union, it appears both needs are in the process of being met.

Suntide's new branch, which opened May 17 in downtown Corpus Christi, Texas, is the first facility outside the headquarters office in the credit union's 48-year history. It's also a major step forward for the $20-million institution on a journey toward serving the underserved that began back in 2001.

The credit union, formed in 1956 to serve the Flint Hills Oil Refinery, knew it needed to expand several years ago to keep pace with its growing Gulf Coast community. Suntide already had taken on several different area select employee groups, but wanted to do more. The National Credit Union Administration stepped in with an answer that was not entirely expected.

Advice From Examiner

"Our NCUA examiner said we should serve the underserved rather than attempt to take on a community charter," said June Bailey, Suntide's chief executive officer.

The federal regulator was just beginning its push urging federal charters to serve underserved areas that lacked adequate exposure and opportunity to credit union services. Such a move would enable Suntide to expand while helping NCUA further grow its underserved program, the examiner told Bailey and her staff.

"They wanted to spread services to underserved areas," said Baily. "They told us if it didn't work for us, they'd help us go community."

The unusual notion appealed to Bailey but, unfortunately, not to her board of directors.

"The board felt we had a comfortable credit union with a strong financial position and a good field of membership that they didn't necessarily want to see changed," Bailey said. "I was disappointed and felt that I had failed to convince them of what we thought was a good idea."

Bailey's disappointment didn't last long. Rather than shelving the entire concept, Suntide's board asked to be taught the benefits of serving underserved areas, and the credit union's executive staff undertook the lesson. Soon they had won the board over to their point of view and progress started toward developing a profile toward serving the underserved areas of Corpus Christi.

Seeking A Revitalization

Like many urban areas, Corpus Christi was attempting to revitalize its downtown and that became Suntide's new area of primary interest, said Barbara Via, Suntide's vice president. The designated area eventually grew to encompass six different zip codes that stretched through most of the major commercial and industrial areas of the city, she said.

"In the end, we had the entire bay," noted Via, referring to the vast stretches of oil refineries that stretch along the Gulf of Mexico. In a way, the credit union had come home, or at least was treading in familiar territory.

In Suntide's case, the term "underserved" didn't refer to low-income population segments that often fall into such categories. By taking on the various zip codes NCUA had approved for them, Suntide was advancing its position as a credit union focused on serving SEGs with potential members at many income levels. In many ways, the commercial and industrial segments of the Corpus Christi were markets with tremendous potential just waiting to be tapped, said Via.

But what seemed like a foolproof concept took time to implement. Suntide went through some management changes and a major software upgrade that took more immediate precedence, delaying the launch of the credit union's service to its newly designated markets.

Then there was the question of alerting potential new members to Suntide's services, said Bailey.

"When you're an established credit union, it's sometimes hard to let new market segments know you can serve them," Bailey said.

Advertising was planned, but Suntide knew it needed a bolder, more visible statement to make its impression. That's when the idea of a new branch came into play, said Via.

"Corpus Christi's downtown is up and coming and we wanted to support and be part of that revitalization," Via said.

The downtown branch also would help meet the needs of the credit union's original membership, comprised of workers at two refineries on different ends of town. Another branch would shorten the time required of many of them to reach the credit union to access services. Not only would new members benefit, but long-standing members would gain greater service access.

500 Square Feet, $5,500

Suntide decided to start small, opening a 500-square-foot branch in the lobby level of a three-story downtown building. The branch would only support two staff, but still would be considered a full-service branch.

Suntide spent $5,500 and five weeks taking the branch from concept to opening is doors and has budgeted $2,000 per month in operating fees. The modest investment comes with little more than a lot of faith in both the market and the concept, said Bailey.

"We have excellent loan and savings rates and new members will be pleased with what we have to offer," said Bailey. "We're very competitive with everyone else."

The branch is still too new to measure any appreciable results and Suntide isn't sure what the area's real potential may be. But the credit union is excited about being part of the downtown revival and the potential it brings as a formerly underserved market, said Bailey.

"We're going to take a year to see if it works," said Bailey. "But we've already told the landlord that we're probably going to need more space, including space for a drive-up lane and ATM.

"And we're definitely going to need more staff," Bailey added.

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