Construction Slump Gives CU Chance to Shine

HOUSTON-This south Texas city was able to dodge most of the effects of the recession until last fall, when a construction slowdown affected members of Union Fidelity FCU, and the CU swung into action, according to CEO Cindy Hester.

Credit Union Journal: In which areas does your CU perform particularly well?
Hester: We do all types of lending except mortgages, but we partner with a CUSO in Houston to provide mortgages to our members. We do well in auto loans, but we also do personal loans-particularly loans to keep our members out of payday lenders.

CUJ: How do you do so well?
Hester: Our member base is labor unions, so we get union members and their families. We have 10 unions here in Houston in the construction trades, and they are all eligible. Many of our members are out of work. Things were doing pretty well until last September, but then it caught up with us.

We offer skip-a-pay, and we ask members to work with us on their loans-we offer partial payments or the ability to spread out payments. They want someone to help them, and if you work with them a little bit, they will give us something. We don't want their collateral, but by working with them, even if they are receiving unemployment, they'll give us a little something.

Being a smaller credit union we know everybody, so it is like calling a friend.

CUJ: Are you proof small CUs don't have to merge?
Hester: Our members love customer service, and in a small credit union you get special customer service. When they walk in we know their names and everything is friendly.

We make a lot of loans to people with "D" and "E" credit who could not get a loan elsewhere, and from talking to other small credit unions around Houston, they are doing the same thing. There is a need for small credit unions-that is what our members are telling us.