HUMMELSTOWN, Penn.-Dareck Caroway enjoys being a branch manager, but he does not like what the recession has done to his role.

"It's made the credit union, and me personally, have to say no to more people who come in needing a loan. I don't, like it," said the manager of Hershey FCU's main office in Hummelstown. "I don't like that feeling and the look in members' eyes who need that loan. These are some of the same borrowers who before 2008 simply came in, filled out some papers, and knew they would qualify."

Like CUs across the country, now the credit union has tightened guidelines, and as part of that change asks for additional documentation. The loan decisions do not come as quickly, and more members are turned down than in the past.

"Even those who get approved are often irked by the new process," noted Caroway. "They say, 'My credit is the same. I am not delinquent on my obligations. . .' Unfortunately times have changed."

To help mitigate bad feelings, Caroway says he follows some key steps. "What you don't do is go into a spiel about being in a recession, the credit crunch, and that things are tighter now. I found saying those things does not help. Members ask what that stuff has to do with them and they have always paid the credit union. Instead I make sure I first credit the borrower for having a good credit history and then talk about us having new guidelines. I just be straightforward about it."


Members Prefer Candor

In the long run members prefer the candor, insisted Caroway, especially when they are turned down. "I don't like to tell members, during the approval process, that things look great and then drop the bomb on them. I point out any issues up front I think they may face. Then, if the member is declined, they know why and are prepared for that possibility. You never sugarcoat things."

The loan decisions are made at another office, whose staff carefully look for red flags, said Caroway. The tighter standards slowed loan growth at HFCU for much of the last four years, but the $55-million credit union's loan portfolio is beginning to grow again. Caroway said some of that is due to great rates: car loans as low as 2% APR, a 15-year fixed first mortgage at 2.875%, and a 4% HELOC.

The branch's area, just outside of Hummelstown in what used to be farmland, is growing, as is the branch's membership, about 9% annually said Caroway. But a limited population makes staffing a challenge, he added. "Especially when you are hiring for the front line. Someone quits and you need to get someone in soon. It can be hard here at times to do that."


The Right Approach

But what's not challenging to Caroway is making sure that he and his staff of five always take the right approach with members. "We get a lot of our members moving more of their relationships to the credit union because of how well we treat them. It can be the simple things, just how you talk to people."

For example, a mother recently brought her daughter in to open a $50 savings account. "But, unlike a bank, I took time to talk to the daughter about the importance of saving and establishing good credit. It was just a small account, but I took the time, as do our staff. Because of that the mother went home and talked to her husband about doing more business with Hershey. We got two more loans, a checking account, and a savings account."

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