With larger banks facing intense scrutiny and negative publicity, are credit unions becoming “a flight to safety” for weary depositors?
Definitely. This typically happens whenever there is a significant downturn in the economy and financial marketplace. Credit union members, because of their high level of trust and loyalty, will turn to their credit union as the “safe harbor” for their financial needs during those times. Since credit unions normally pay higher dividends on Savings Accounts and Certificates, and because the Members funds are insured, there is definitely a higher level of trust that members rely on during tough times.
You’ve completed several mergers in the last decade including those with Stanley Works Employees Federal Credit Union, Skinner Employees Federal Credit Union, and Connecticut Grange Federal Credit Union. How have they benefitted Nutmeg and do you have plans for future growth?
We’ve completed seven mergers since 2001, the most recent being Manpoe FCU (in Manchester) and Phoenix FCU (in Hartford) last summer. Both credit unions benefit in a merger, the members of the merging credit union are given access to a great variety of services, many of which they never had. And the continuing credit union, in this case Nutmeg State FCU, has the opportunity for growth as a result. Our long range strategic plan certainly identifies mergers as a potential source of additional growth, should the opportunity present itself.
With credit still being tight out there, is Nutmeg still making loans? Are you making more loans than you did in the past? What type of loans are you making?
We are open for lending business, as we have been right along. We are certainly more aware of the conditions that our members are experiencing, and we will continue to work with them every way we can to get them through these rough times. We continue to offer, and make a full range of consumer, credit card and real estate loans. But, like everyone else, we’ve also seen a slowing of demand in the past year, reflecting the reluctance of many to take on more debt during this recession.
What is the most common misconception people have about credit unions?
I believe it involves eligibility for membership. Many credit unions like ours, are now allowed to conduct business in an expanded area called a “Community” through a community charter. In our case anyone who resides, works, worships, volunteers or goes to school in Hartford, Tolland or Middlesex Counties, members of their family and other organizations can join Nutmeg State FCU. Many people in the general public are still unaware that these opportunities with credit unions exist, and, as a result they don’t realize the wide variety of competitive products and services that are available through the credit union.
Reader response:
“Hi Loren, Just saw you on TV and so happy to see you. Just had to say hello and say you have done so well. Can.t believe it is a year and half since Doug has left me and can.t get over it. Say hello to Judy and Amy must be grown and married by now. Didn’t get chance to talk to you but just wantt to say hi and look forward to seeing you on TV again. Take care and give my best to family.”
Love JeanÂ
