A pair of credit unions in Florida and North Carolina have joined forces in order to improve services to their respective memberships.
Local Government Federal Credit Union and Florida A&M University FCU have agreed to collaborate on strategy, governance and operations. The goal, the two CUs say, is to provide each other with advice and support, sharing best practices and innovations.
“One of the enduring hallmark traits that distinguish credit unions from other kinds of financial institutions is our nature to help each other. Consequently, it should not be a surprise to anyone that our two credit unions would link up,” Local Government FCU CEO Maurice Smith said in a press release.
FAMUFCU’s CEO, Ernest Allen, said his credit union “has become a more enabled and powerful institution because of its connection with LGFCU.” He added, “we feel fortunate to have the wherewithal of a multi-billion enterprise supporting our cause.”
The two CUs are of drastically different sizes. While Local Government holds assets of more than $2 billion, FAMUFCU has just $20 million in assets. But the CEOs of both institutions insist the collaboration can benefit both.
“It would be hubris to believe that large credit unions cannot learn from small institutions,” said Smith. “We intend for both our organizations to benefit each other. LGFCU is thankful CEO Allen and his board are willing to collaborate with us.”
Smith is chairman of the Credit Union National Association board of directors, and he has expressed his concerns about the ongoing consolidation in the movement – particularly as small credit unions continue to fail or be merged into larger institutions.
“Sustainable economic development often comes from within the community,” he said. “When hometown financial institutions pull up their tents and leave, low-wealth consumers are the first to suffer.”
The two CUs’ partnership has gained the attention of several national credit union groups.
“Community development begins when institutions have a sense of community,” said Cathie Mahon, CEO of the National Federation of Community Development Credit Unions. “This goes for credit unions in our movement as well. To think that credit unions from other communities several states over is willing to help each other serve their members is truly inspiring.”
Renee Sattiewhite, executive director of the African-American Credit Union Coalition, said FAMFCU and Local Government’s partnership is “an example of how the movement can be propelled forward,” adding that “when two dissimilar credit unions galvanize forces, the results can be moving.”