Credit Union Times - Centennial Edition - (Page I36) CeLeBrAtiNg 100 YeArS , SPeCiAL CeNteNNiAL editioN Members Stay at Heart of CUs through Years of Change union members, Hoel and others said. By DaViD MOrrisOn First, that relationship meant they were CU Times Senior Staff Reporter ARLINGTON, Va. — From their earliest beginnings, employed. Even if they were likely among credit unions have focused on meeting the financial the lowest paid workers at a given employneeds of their members, but the profiles of those mem- er, that relationship meant they had regular income from a regular source and were bers have changed over the years. “Probably the single biggest shift in credit union a known quantity. “One of the things I used to think really membership came about when credit unions began to move away from being sponsored by only one company,” differentiated credit unions from banks that said Robert Hoel, fellow in residence at the Filene many people might not have thought of is the amount of additional money banks used to Research Institute. have to spend to vet their The first move was having multiple customers and borrowers employers sponsoring their employees into before they wrote any loans,” a credit union, followed by accepting memsaid NAFCU’s chief econobers from a defined community. Each shift mist, Tun Wai. “When they Tun Wai broadened and diversified the pool of people were more employer sponeligible for credit union membership, which sored, more credit unions didn’t have to do both strengthened and challenged credit as much of that because they knew who unions, Hoel said. their members were, where they worked Hoel and other credit union researchers and likely roughly how much they made.” described the shift away from single sponThe employer relationship also tendsorship as the most important change ed to give credit unions a more homogebecause that relationship between the credit nized membership. Whether sponsored union and the employer-sponsor touched on by an employer or a union, credit union so many parts of credit union operations. members tended to be grouped as mostly Employers liked it because it allowed in a given profession or field. This made them to offer their employees an important Robert Hoel both marketing to and serving members benefit at little to no cost, Hoel explained, easier, but also represented a weakness and credit unions liked it because it allowed them easier access to potential members without spend- since the credit union was vulnerable to economic downturns and potential catastrophe if the credit union’s ing a lot of money on marketing. “If you had some marketing news or a marketing sponsor shut down. Even though credit unions are still growing into their idea, all you had to do was to make a copy of a flier and run it down to the HR or employment office. It made relationships with communities rather than companies, Wai and Hoel both commented that these new strucyour job a lot easier and less expensive,” Hoel said. In addition, the relationship with a single sponsor at tures would be better in the long run. “I think greater diversity in terms of employers, ecofirst, or multiple sponsor groups, tended to define credit nomic circumstances and background is a strength in the end,” Hoel said. “Even though it’s more expensive to market to a broader array of members, credit unions will also find those members offer a greater range of opportunities for growth.” Wai generally agreed, though he also said that serving a broader array of members also helped drive the trend toward greater mergers and consolidations as credit unions felt defeated in trying to keep up with the products and services demanded by an increasingly diverse membership. Hoel and Wai also stressed that credit union members have also changed while remaining members of their credit unions– and that credit unions have to get used to both target marketing both younger members just starting out their financial lives and older members near or at retirement. Wai especially feared that too many credit unions were missing the opportunities older members present. “One of the things I hear from credit unions is that our older members are going to retire and move away,” the NAFCU economist said. “But nowadays, geography doesn’t really dictate banking relationships any more.” He also pointed out that the old axiom that retired people were no longer customers for financial services does not apply since many retired people are merely treating their retirement as a chance for second careers or volunteer opportunities. Hoel also suggested that the current economic downturn has given credit unions a way to market themselves particularly to younger people who would still need financial products at good rates, especially credit cards and auto loans, but also need a trusted relationship with a local banking institution. —dmorrison@cutimes.com Sibling Ceos Carry on tradition From ‘Mother of CUs’ By JiM ruBenstein CU Times Senior Correspondent CINCINNATI — When you talk family business among the Herrings of Cincinnati, it has to be about credit unions and a rather proud history. The offspring of the late CU pioneer Louise Herring, often called the “mother of credit unions” because of her extraordinary skills in organizing and supporting CUs in the 1930s, is a brother-sister team, both of whom head up Cincinnati CUs. Underscoring that industry legacy and sense of dedication, Bill Herring is president/CEO of the $80 million Cincinnati Central CU, a member of the CUNA Board and chair of American Share Insurance. And Herring’s sister, Catherine Herring, is president/ CEO of the $46 million Communicating Arts CU and also dedicated to the industry, serving on an array of state league and CUNA committees. The Herring siblings even have offices in the same building. “As a teenager, I do remember those discussions around the dinner table where my mother described the exploitation of workers at Kroger and about the importance of individual dignity, particularly on race, gender and so on,” said Bill Herring, who like his sister found himself recruited to help their mother sort and post CU ledgers at home. For Catherine Herring, her entry into the business was one that “just evolved” from her mother’s request that she and her brother to assist with various chores at Cincinnati CUs “which simply needed the help.” Growing up in southern Ohio where the Ku Klux Klan was active with cross burnings and immigrant discrimination, the 63-year-old Bill Herring does recall his parents’ concern for protecting individual rights and the importance of raising workers’ standard of living. His mother, starting at age 23, had long since developed a name for herself in the movement, setting up 13 CUs for Kroger employees. In those days CUs kept memberships small so volunteers could handle the work load. Her mother, who later founded the Ohio Credit Union League and was its first manager, went on to join Edward Filene and other CU pioneers in Estes Park, Colo., in 1934 as they set up the Credit Union National Extension Bureau, the CUNA forerunner created from a confederation of state leagues. Among his recollections, Bill Herring remembers his mother’s anger over exploitation by “bucket shops,” an equivalent of modern payday loan outlets. People who borrowed from the bucket shops ended up in such debt holes, they were unable to recover. Though attention was always on the family, including three other siblings, Bill also remembers his mother being away from home traveling across the state to help people start their own CUs, 500 in all. Her car was her office and sometimes her hotel to save on hotel bills. In talks before CUNA groups, Bill has always said that his mother’s “views Bill Herring and activism made her unpopular in some circles with critics attacking her for being among other things, a communist.” Not all his mother’s efforts were successful. In the 1970s, she organized Everybody’s Credit Union to serve people living in poverty but the CU later closed because of a lack of capital. “My mother always said she had the right to fail,” Bill Herring said. “Fear of failure would not keep her from doing anything.” Louise Herring died in 1987. Among home-life memories, Bill Herring recalls “lots of members calling 24/7 to talk to my mom about problems at work,” particularly workers from CUs affiliated with the Cincinnati newspapers. “Some of those printing-plant employees ended up hearing impaired from working the presses and so there was my mother consoling them and advising them on their finances.” “Everybody was told to come to Louise” when they had problems, said Bill Herring, who remembers reading off ledger cards and calling out names to his mom. All of that on-the-job training has long provided him with a special perspective in running Cincinnati Central and serving as a CUNA director, he said. “I think my mom provided me with firm grounding on the idea that the average working person has the power to control his own economic destiny,” with those in CUs empowered to provide the necessary financial tools, said Herring. Prior to taking the CU job, Bill considered going into the Peace Corps and joining a Catholic seminary. Herring said he has no regrets about going to work for a credit union. “Had it not been for this job, I would have never met my beautiful wife, Kathy,” an arts teacher, he said with a laugh. He has been with his CU since 1969, and is a former chairman of the Ohio league. Along with the CUNA Board, he is a trustee of Smart Money Community Services, an agency partnered with the CU to aid the underserved and low-income of central Cincinnati. Among his other achievements, Bill Herring holds the 2002 Herb Wegner Award for Individual Achievement. He is a business graduate of the University of Cincinnati. Catherine Herring joined her credit union in 1973 and has been CEO since 1987. She is a member of the state credit union subcommittee of CUNA, trustee and former chair of the Ohio league’s legisla http://www.cutimes.com
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