Credit union sands the hard edges off banking
With 201,000 members that rely on its decision makers, Don Evans is proud Hudson Valley Federal Credit Union avoided the subprime storm. No doubt the members, who receive a share of the credit union”™s profits at year end, feel the same.
“We didn”™t, by any definition, do any lending that would hurt our membership,” said Evans, the credit union”™s vice president of lending and business services. “Subprime brokers targeted people with low credit scores, and many ended up in homes they couldn”™t afford but banked on the housing market”™s continual rise. It didn”™t happen.”
HVFCU made loans, said Evans, “but to members with good credit scores, good credit history and the ability to pay the loans…we have approximately $1 billion worth of service loans that are controlled through Freddie Mac or are loans on our books. We only do loans we can service and permit contact with our lenders.”
Evans says the decline of home prices and rise of foreclosures is certainly a concern. “We have tried to reach out to people in trouble with simple ARM”™s (adjustable-rate mortgarges) and try to put them into fixed-rate mortgages. Those mortgage rates, however, can change several times a day, based on the market.”
Evans says “junk fees” can drive up the cost of borrowing and there are a bagful of tricks some lenders can use. “We just try to provide the best rate. It”™s that simple.”
Federal Reserve chairman Ben Bernanke”™s moves to keep the economy afloat are “Interesting,” observes the longtime banker, “but they affect short-term rates. The best indicator is 10-year Treasury bonds. They don”™t adjust due to any action by the Fed. They don”™t move as quickly. I don”™t want to predict what impact Bernanke”™s moves will have on the market. One thing is certain, it will help credit card rates go down again.”
Evans advises those in the credit crunch “not to wait to contact their lenders. “If you”™re having trouble meeting your bills, call immediately. People are being hurt by job losses, the high price of food, gas and heating costs. We maintain an independent agency called Balance. It”™s available to any member to help them work through a financial crisis. They are not working on behalf of the credit union,” says Evans, “but of our membership.”
And for the member who might occasionally write a check for more than they have on deposit? “Privilege Pay will kick in and automatically transfer funds to cover any check or debit coming out of your checking or your Visa card up to $500. It is not a loan, per se, but if you are a qualified member and have an overdraft, we don”™t charge a fee ”“ the first time it happens. If it happens more than once, our fee is lower than other banks. It does help our members, as they are not charged twice, once by the bank and once by the place where the charge was incurred.”
Hudson Valley Federal Credit Union, created by IBM in 1963 for company employees, became a community credit union in 2003, with its market limited to Dutchess, Orange and Ulster. There are currently four branches at IBM facilities in Fishkill and Poughkeepsie, and nine in other locations in Dutchess and Orange counties. The credit union will open its first branch in Ulster in the town of Ulster by fall 2008. The 5,870-square-foot facility being built on 9W at Grant Avenue will offer drive-through teller and ATM service.
“We are always looking for locations where we can best serve our members,” says Evans. “Most of our locations are in Dutchess right now, because we originated here. And many of our ”˜Gen X”™ and ”˜Gen Y”™ customers became customers because mom and/or dad worked for IBM. Their parents were happy with our service, and subsequently, we”™ve become part of the family.”
While HVFCU”™s main customer base was built on membership, it is growing its commercial portfolio, too. “We are finding a lot of businesses have come to us because short-term rates have gone down. We”™ve only been in the arena a few years, but our commercial loans total approximately $50 million now.” And yes, says Evans, “We”™d like to see that grow. Helping business grow helps our members. We also don”™t penalize them (business borrowers) for prepayment on permanent construction loans, so that adds to the attraction of using us for their lender.”
While Evans has spent a career in banking, his original career path was the law. “I”™m an attorney and still have my license in both Massachusetts and Maryland,” says Evans. “While I don”™t give advice, I can certainly challenge the lawyers when something comes up. It does come in handy.”
Evans says HVFCU is proud of its growth and the fact that it is the third-largest financial institution in the state and the 29th largest credit union in the US. The credit union”™s future growth plans include branches in the city of Beacon and Orange county”™s town of New Windsor, both slated to come on line before the end of the year.