IRVING, N.Y. — May 16 was not only "Indian Day," a New York state holiday that celebrated the various Native American tribes across the Empire State, it was also the first day in existence for the Seneca Nation of Indians FCU.

The new credit union — the second to be granted a charter by NCUA this year — is expected to open in early August and will serve the Seneca Indian tribe of western New York, near the Buffalo area — a segment of the state that has long suffered from lack of access to affordable financial services.

Under its charter, the CU will accept members who either belong to or work for the Seneca Nation of Indians, a group with a population of over 8,000 enrolled members that operates various business enterprises, including three casinos. (Members of the credit union do not have to be of Seneca Indian descent).

In an exclusive interview with Credit Union Journal, Seneca Nation CEO Connie Scherrer said she is very excited about this opportunity, noting that the tribe have long been an under-banked and underserved community.

"We are going to provide our members with various financial services, including checking accounts, debit cards and loans, which they had asked for in a survey we conducted earlier," Scherrer said. "To attract a younger membership, we will also provide online banking and mobile banking, since almost everyone here is digitally connected."

But since most of the target membership has no credit, a key part of Seneca Nation's strategy will focus on building credit and teaching financial literacy, especially to children.

"One of our products is called a credit-builder loan, which will help people without credit to develop a credit history," she noted. "We also expect to offer auto loans — up to $50,000 for new automobiles, $25,000 for used cars — as well as personal loans of up to $5,000."

Seneca tribe members who used local banks had complained about their high fees, according to Scherrer. She expects the new CU to have about 480 members by the end of this year; approximately 6,000 members within five years and that Seneca Nation will be "profitable by our third year of existence."

Neither Scherrer nor her colleague Debbie Culligan, the credit union's operations manager, are of Seneca Indian descent, but that posed no problems in their hiring. "[The Seneca Nation of Indians] were looking for people with a lot of experience in running credit unions," she said.

Indeed, Scherrer has over 30 years' experience in both banking and credit unions. She began working for New York State's credit union trade association (now called the Credit Union Association of New York) in 1990 and eventually became the chief executive officer of the United Auto Workers credit union in Cheektowaga, N.Y. (Now called Financial Trust Federal Credit Union, the institution and has some $68 million in assets.)

She also worked in Cheektowaga for some eleven years, before taking a position at a much larger credit union, the $747 million the Summit FCU, in Rochester, N.Y.

When Scherrer heard about the new Seneca Indian credit union, she applied for the job of CEO, interviewed with local Seneca officials and was hired. She brought along Culligan, a former manager of the Buffalo Community Federal Credit Union (a $74-million Buffalo-based institution), to join the team.

"We each have some thirty years of credit union experience, and I think that's what impressed them the most," Scherrer. "Just as important, the NCUA were pleased that the CU had hired experienced people."

The Chartering Process
Lucille White, chairperson of the Seneca CU board of directors and chairperson of the Seneca Nation of Indians Economic Development Co., said the chartering process with NCUA was lengthy and featured many stops and starts.

"Steve Scott worked diligently with NCUA to make tweaks in our business plan and finally get it done," White said.

In an interview with CU Journal, Scott, acting deputy director of planning and development for the Seneca Nation and a member of the tribe, said that he joined the process in March 2013.

"There was a lot of back-and-forth with NCUA during the early stages," he said. "For example, when we first conducted our survey of the local community, we only got a 6% response rate, and the NCUA said we couldn't submit the results until we got a minimum of 25%."

Scott noted that before Seneca Nation was chartered, some members of the tribe with good credit scores were rejected when they applied for loans at some local banks.

Though he will not have an official position with the CU going forward, Scott will temporarily serve as an "unofficial consultant" to ensure that Seneca Nation receives a CDFI designation as well as certain government grants.

He successfully chartered another Native American credit union in Wisconsin — the Lac Courte Oreilles FCU — now a $2 million entity based in Hayward. Scott noted the credit union ethos of "people helping people" fits in perfectly with the traditions and values of Native American culture.

The credit union will have a five-member board of directors, a three-member supervisory committee and the three-member loan committee. Some, not all, of these positions are filled by Seneca tribe members, according to Scherrer.

The CU will initially have eight employees, four in the head office in Irving, and two each in branches in the towns of Salamanca and Niagara Falls. Its sponsor — the Seneca Nation of Indians — provided the capital funding, and also offered rent-free space for three office locations, including the headquarters in Irving, N.Y.

However long it took for Seneca Nation to receive its charter from NCUA, it wasn't as long as the Finest Federal Credit Union, the first CU to receive a charter this year after a seven-year delay. The New York-based institution is open to serve the more than 74,000 employees of federal, state, county and municipal agencies or departments engaged in police protection in the Big Apple.

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