Q&A talks about the future of credit unions with Loren Dickinson, retiring president of Nutmeg State Federal Credit Union in Rocky Hill.
Q: During your tenure at Nutmeg, 23 years in total, your credit union mergedwith seven other credit unions. Were you an early proponent of mergers? Have the mergers of credit unions in Connecticut slowed down or are there still strong potential mergers in the market?
A. I’ve always been a proponent of mergers, done for the right reason. I’ve never believed in what I call the “Pacman” strategy. The mergers that we’ve done have made sense for us and for the merging credit union. Mergers in Connecticut have continued, perhaps on a slower rate than in other parts of the country, but the trend will continue, and perhaps accelerate in the next couple of years. The severity of the recession and its aftermath will undoubtedly take a toll on more credit unions, smaller ones in particular.
Q. Back in 2006, you transitioned Nutmeg from a single-sponsor credit union to a tri-county community credit union. What was the thinking back then and have the goals of that transition been met four years later?
A. When we received a community charter in October 2006, we actually were considered a multi-group credit union by our regulator. The bulk of our members then, as well as now, were the result of our long relationship with what began with SNET in 1935, and eventually became AT&T. But we also had the employees of around 250 small companies that were part of our membership. Part of our strategy in seeking a community charter was to better serve the changing demographics of our current membership, and to position ourselves strategically to offer our wide variety of service to a larger audience in the future. Our goals for that change have partially been met. The slow economy and the recession have definitely been a major factor, which will extend the overall timetable for achieving those original goals. But, we’ve been very pleased with the growth that we’ve seen to date in many other areas of our operation.
Q. You implemented Internet banking back in 1996 when it was still in its infancy and the world lived on dial-up access. That was pretty forward thinking of you. What’s going to be the next technological advance in banking from your perspective?
A. I remember ordering the first personal computers for the credit union in 1988. One of our most recent new product offerings this year was mobile banking, just to illustrate the changes that have occurred in technology during my tenure at Nutmeg State FCU. The way things are changing now makes it very difficult for me to predict what’s next. I’ve always relied on my IT Department for that, rather than make my own predictions.
Q. Keep the crystal ball out for a moment longer. What’s the overall health of credit unions going to be like in five years in Connecticut? Do they continue to grow? Does that growth come at the expense of banks or do both continue to grow?
A. Credit unions will survive the current unprecedented challenges that we’ve been dealing with. There will be fewer credit unions, but they’ll be stronger and they’ll continue to grow. Banks are going through similar challenges and, more than likely, the number of banks will also continue to decrease in the next few years. I believe that regulatory oversight of financial institutions is going to get much tighter if we are to avoid a reoccurrence of the problems that got us to where we are today.
Q. Banks and credit unions have long been known for their active community involvement. Any concept of what that involvement adds to a financial institution’s bottom line? Can a credit union be successful and disregard its member’s community needs?
A. Nutmeg State Federal Credit Union has always believed in supporting the communities where it does business. We do the best we can with the resources we have. I feel strongly that by being active in the community you are showing your support not only for your members, but for the community itself. We want to be considered a vital part of the community, not just a business that has an office there. We’ve been successful because of the trust our members have in us. Our community involvement helps to strengthen that bond, and it is the result of that which goes right to our bottom line.
Q. Question has to be asked, why are you retiring now? What made the timing right for you?
A. Someone once told me that I would know when the time was right. They were correct. I’ve loved every moment of the 42 years that I’ve been involved with credit unions, and I will miss it greatly. But, I’m ready to step back and begin to enjoy life by spending more time with my family, particularly my grandchildren, and by pursuing other interests like fishing, golf and traveling with my wife.
