By Lisa Broadwater, Manager of Consumer Lending Product Development, Eastman Credit Union

Since December, 50 firms have pulled out of writing federally-backed or private student loans. In April, giants Bank of America and Citicorp announced pullbacks – Bank of America said it would stop writing private student loans, and Citicorp’s said it would stop writing ones at schools where paybacks were unsatisfactory as well as stop writing federal student loan consolidations altogether.

 Eastman CU has had a private student lending program (it does not write federally-backed student loans) since 1989. Eastman’s is now the largest such program of all U. S. credit unions at 1,758 on the books for $26 million (average balance about $29 thousand). The student loan program has been growing at more than 20% a year.
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By Cathie Tierney, CEO of Community First CU in Appleton, Wisc

Community First CU of Appleton, Wisc., ($1 billion in assets, 77,000 members), a 13-county community charter credit union that is the third largest in the state, held a four-day loan sale beginning January 31. This was the day after the Federal Reserve unexpectedly dropped interest rates 75 basis points prior to their regular meeting; Community First’s pre-made ads (they plugged in the interest rate once the Fed’s regular announcement – an additional .50 bp drop - was made) hit the airwaves within 24 hours of the Fed’s lowering began making news headlines. The credit union offered rates as low as 3.95% on any secured loan, real estate and refis included (the rate was guaranteed for five years). The lowest rates were for the best credit and for loans of at least $10,000 in new money. Persons taking advantage of the loan sale had to have a direct-deposit checking account with the credit union. Community First was hoping for $35 million in loans but got 2,000 calls on the first day and over the four days received 3,000 applications for $158 million in loans. [For more on the loan sale, see the February 2008 Callahan Report –ed.] Cathie Tierney is CEO.

How did the loan sale turn out for you?

CT: It was amazing. We wrote $149 million in loans. Ninety-three percent of the applications were approved. The other 7% were not necessarily poor credit risks; the applicants may have balked at giving us their checking or direct deposit. Thirty-one percent of the applicants were new members, who opened 696 new direct-deposit checking accounts with us. Seventy percent of the $149 million was new money.

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By John Hirabayashi, President & CEO of Community First CU of Florida

Community First CU of Florida began in the Depression as the credit union for teachers in Duval County. It now is the ninth largest credit union in Florida with $1.2 billion in assets and more than 100,000 members. It serves a number of counties in northeastern Florida as well as education-related SEGs (colleges, private and public schools, etc.); it is headquartered in Jacksonville.

You are in one of the states most affected by the mortgage problems. When did you begin to see problems and how did you react?

JH: Yes, Florida and California are the two hardest hit states I believe. We began to see problems last summer. This was after many subprime-related problems were being written about in the press; I think the mortgages with more traditional underwriting – such as ours – saw their troubles coming later.

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  By Bridget Looby

In the Saginaw area, Catholic Federal displays a deep commitment to the communities and the Catholic flock.

Catholic FCU began in 1956 in the rectory of St. Mary’s Cathedral in Saginaw and then grew through new members and mergers. It expanded to encompass the 11 Michigan counties composing the Diocese of Saginaw. It can accept members of Catholic parishes in the Diocese of Saginaw, employees of the Diocese of Saginaw (or Catholic parishes) and employees of the Catholic schools who are either Catholic or non-Catholic, as well as relatives of members regardless of where they live or what their religion. The credit union serves 23,000 members and has over $210 million in assets.

You are pretty closely tied to the Diocese of Saginaw?

BL: Yes, our geographic area is the same as theirs. A few years ago, the credit union noted that other credit unions were converting to community charters so Catholic FCU wondered if it should convert as well. But during a planning session our Board and management decided to stay true to the credit union’s roots and stay primarily Catholic. One idea generated from not joining the mass exodus of local credit unions to community charters was to hire a Vice President of Business Development. Needless to say, I am that end result. I see a large part of my job as getting out into the diocese office, parishes, schools and their functions and telling people about our credit union.
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By Scott Vandeventer, COO/EVP, Evangelical Christian Credit Union

Less than 20 years ago ECCU had $40 million in assets. It now has over $1 billion in core assets and $3 billion in assets under management owing to a participation network. Its employees are passionate about helping their credit union’s member ministries.

Explain your credit union. 

SV: We exist to make evangelical Christian ministries more effective. Like any financial institution, we provide loans and banking services, but we are not a typical credit union. Instead of serving consumers, our primary market is ministry organizations, specifically churches, Christian schools, colleges, and other evangelical ministries. World Vision and Campus Crusade for Christ are two examples. Even with all this emphasis on serving non-profits, we do serve individuals.  Essentially, so we can focus on doing the best for ministries, we limit our services to individuals to just deposits, with the one major exception.  Because we serve Christian workers doing relief, linguistics and other kinds of work around the world, we are thrilled to provide this specific member segment with all the banking services the average credit union provides.  It’s really another way of serving ministries—the organizations that send them overseas like having a banking partner that will drop everything to meet the needs of their expatriates—today these folks are in more than 100 countries.
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