Credit Unions Deploy Tech, Community Outreach

YOUNGSTOWN, Ohio – As national numbers show credit unions are struggling to attract new and younger members, local credit unions are countering the trend with new initiatives and technology.

“Young people today – they don’t want checks. They don’t even want cash,” says John Demmler, CEO of 717 Credit Union in Warren. “They’re not going to carry a wallet. They’re not going to carry an ID. They’re not going to carry credit cards. So if you don’t have a digital capability to deliver your products and services, you won’t be relevant.”

Five years ago, the Mercer County Community Federal Credit Union averaged 5,000 online transactions a month. Today the average is more than 100,000, just through the mobile app.

“You can do everything on your phone,” Sandi Carangi, says president and CEO of Mercer County Community Federal Credit Union. “You can open an account. You can take out a CD. You can apply for a loan. You can do everything … and that’s the part that is most valuable for our members. The online access has just exploded.”

To  keep ahead of consumer demand, 717 tries to add more digital offerings each quarter, such as a chat service on its website and enhanced video banking from smart phones. Demmler says video offerings can provide a better personal connection.

Associated School Employees Credit Union is looking to upgrade its ATMs to allow customers face-to-face transactions through video.

The president and CEO of ASECU, Michael Kurish, says investing in technology is paramount, with some spending geared toward improving the customer experience and the rest to protecting members from cyberthieves.

“The bad guys are getting better every day and we’re spending a lot of money to protect ourselves from them,” Kurish says. “It’s not cheap but the expense of not investing in it – the consequences – are scary.”

Since 2018, loans at credit unions have risen 8.8% on average each year while deposits have risen 9%. However, the people who use credit unions are aging, according to McKinsey & Co., which found in a 2023 survey that baby boomers are the biggest share of credit union members, accounting for 39%. Only 10% of credit union members are Generation Z, who prefer big banks.

The same survey found 57% of members perceived their credit union as an extremely good value, compared to 46% of big bank customers and 44% of small bank customers.

International Credit Union Day, celebrated on the third Thursday in October since 1948, promotes these member-owned financial institutions, which strive to bring people together through shared experiences and community goals.

The credit union difference, according to Kurish, is that they are operated by a board of local volunteers who are interested in investing money back into the membership instead of benefiting stockholders.

“In the credit union, the individual that comes in is the owner, is the stockholder. So the money, we return right back to them,” Kurish says. “I always say it gives us the opportunity to sit on the same side of the table with them, rather than across the table.”

717 EMBRACES COMMUNITY

Demmler took the reins as CEO of 717 nearly a year ago and has emphasized the importance of involvement that has an impact on the community.

His institution is cosponsoring a big event Oct. 19 in downtown Youngstown. Dubbed The Open, the free event includes a full day of live music culminating in a concert by regional rock band Red Wanting Blue on West Federal Street. It’s just the beginning of 717’s efforts to entice people back to downtown, Demmler says.

Recently, 717 hosted a tailgate party at Kent State University’s homecoming and in July, 717 celebrated its own anniversary with “Financial Wellness Night” at the Mahoning Valley Scrappers game, which attracted a capacity crowd.

“Families came up to me and said just how thankful they were to be able to bring their entire family out for an evening of entertainment,” Demmler says of the baseball game.

Beyond members having a great time, Demmler believes these types of events show how all are “banking on each other and building stronger communities.”

For instance, a promotion at the game taught the importance of saving to children, offering them a savings account with 7.17% interest for their first $1,000. Through another program, those saving for their first home can also receive a 7.17% account.

While Demmler admits the credit union is not making any money on those high-yield accounts, he says convincing people to save makes it worthwhile. Helping people understand financial wellness, such as refinancing to save money, is another.

“Our mission has two prongs to it,” Demmler says. “One is to help people live better lives financially and the second prong is to help the communities we serve.”

Demmler cites a program whereby residents in the 3rd and 4th wards of Warren who want to improve the outside of their homes can borrow up to $10,000 at a 5.99% rate, regardless of their credit score. Councilman Greg Greathouse brought the idea to 717. Demmler says that’s why they call it the Great House Home Improvement Loan Program.

In another service, members can use the app to turn off their debit card should they lose it. More programs are on the horizon, including an emphasis on honoring the intent of the smaller credit unions that 717 acquired and expanding the credit union’s footprint toward Cleveland and Columbus.

“As we grow outward in concentric circles, those are just natural markets for us to continue to grow our presence,” Demmler says.

GROWTH AT MERCER

Carangi agrees credit unions are doing well in the Mahoning and Shenango valleys. “We help each other out and absolutely support each other and take care of our communities,” she says.

The Mercer County Community Federal Credit Union amended its charter and expanded into seven counties about a year ago, including Mahoning, Trumbull and Columbiana counties. In the last nine years, the credit union’s memberships, total assets and employees have all doubled, Carangi says.

This led to the construction of a $6 million, 10,000-square-foot headquarters in Hermitage, Pa., which opened in May, and followed the $1 million renovation at the Sharon, Pa., site five years ago.

“We feel very strongly that we’re in a very good area. There are lots of things happening with growth and economic development and we absolutely want to be a part of all of that,” Carangi says.

The credit union is involved with both the Shenango Valley and the Youngstown/Warren Regional chambers, as well as other economic development agencies. “We are growing right along with [the region],” she says.

The larger headquarters building gave the institution space to upgrade hardware and infrastructure, the mobile app and online banking. Carangi points out members who do not want to come into the office have no need to do so.

Upstairs, the structure has a training room to host financial education events for members. An officer with the Hermitage police will talk about fraud protection on Nov. 14.

Carangi says helping people, including the young members, is part of the personal touch the credit union offers.

ASECU

Kurish, the CEO of ASECU, says his credit  union has  had “an excellent year. We’ve had tremendous increase in our deposit growth. We’ve seen our loan growth increase as well.”

Total assets at federally insured credit unions are $2.3 trillion, according to the National Credit Union Administration, which says those assets increased by $79 billion or 3.5% in the year ending after the second quarter of 2024.

The rising cost of cybersecurity and the effect of governmental regulations have brought the need for additional payroll. While Kurish says those regulations are well meaning, he says Congress applies them to both the offending institutions and everyone else.

Kurish believes that’s why some smaller credit unions have found it easier to merge with others to share the costs and to provide new services.

As of June 30, the NCUA reports there are still 4,533 stand-alone federally insured credit unions with 141 million members.

Kurish believes staying local has helped the ASECU.

“I think one of the items that differentiates us from a lot of other financial institutions, we always talk about the fact that we’re a local institution. … We’re one of the oldest, last surviving institutions that has its roots in the [Mahoning] Valley,” he says. “And I think that’s meaningful to the members. They know their money is being kept local and they have local individuals they can go to, to address their needs and their concerns. The leadership of the credit union is all volunteers from the community. So they’re more responsive to the needs.”

Kurish believes that gives them the ability to be more flexible and nimble, making changes to reflect the needs of the local economy and requests for services.

ASECU has its main office at the corner of New Road and state Route 46 in Austintown, an intersection slated for a possible future roundabout. In addition, the credit union has branches in Boardman, Lordstown and Newton Falls, as well as an ATM in North Jackson.


Credit Union Assets Rise

Total assets in federally insured credit unions rose by $79 billion, or 3.5%, over the year ending in the second quarter of 2024 to $2.3 trillion, according to the National Credit Union Administration’s second-quarter financial performance report.
Highlights include:
Total loans outstanding increased $56.1 billion, or 3.6%, over the year to $1.62 trillion.
Interest income rose $19.9 billion, or 21.6%, over the year to $112.3 billion annualized. Noninterest income rose $2.6 billion, or 10.6%, to $27.1 billion annualized, largely reflecting an increase in other non-interest income.
The credit union system’s provision for loan and lease losses or credit loss expense increased $3.8 billion, or 41.4%, over the year to $13.0 billion at an annual rate in the first half of 2024.
Insured shares and deposits rose $36 billion, or 2.1%, to $1.76 trillion. Total shares and deposits rose by $49 billion, or 2.6%, over the year to $1.93 trillion in the second quarter of 2024..
The credit union system’s net worth increased by $13.3 billion, or 5.6%, over the year to $249 billion. The aggregate net worth ratio ‒ net worth as a percentage of assets ‒ stood at 10.84% in the second quarter of 2024, up from 10.62% one year earlier.