Joyce Moed | Business Samples

CIO Employees Federal Credit Union
By Joyce Moed, Reporter

Washington–AFL-CIO Employees Federal Credit Union, here, faces several challenges being a smaller credit union, said its CEO James Norris.

"Membership growth–that's our No. 1 issue," he said.

This is especially difficult for the 10,000-member CU, which recently purged its non-active members.

"We are trying to market benefits of membership," Norris said. "We're also looking into charter expansion and a merger possibility."

In the meantime, the $76-million credit union has created a "good management team, with a lot of expertise," Norris noted.

The next challenge for AFL-CIO during this current economic climate is in lending, Norris said.
"We've just been through a couple years of collection activities," he said. "We've cleaned up our loan portfolio."

This was done due to poor underwriting decisions by prior management, Norris said. He added that this may put AFL-CIO Employees FCU in a better position than other credit unions who are new to facing these challenges now as it brought them the experience needed for this current market.

"We've already done these," he said. "Others are challenged with delinquencies they haven't dealt with before. We're already in that collection mode. We've already got programs in place."
The members they are mainly seeing now in these times are ones that really want to pay their loan agreements, but may have some circumstances–such as job loss.

"We have some in-house financial counseling," Norris said. "And we are also members of BALANCE. They are the experts."

Another challenge smaller credit unions may experience right now–and any time–is marketing, Norris said.

"We need to be creative," he said. "We can't afford to go on TV or radio. We are out and about in our various SEG groups. The biggest thing is really creativity."

But being small, and specifically being a credit union, may be a great opportunity right now for AFL-CIO, Norris said.

"Credit unions can be the knight in shining armour," he said. "When we come out of this economy–and we will–we want to be there."

Norris expects the market to improve by summer of 2009, at which point he expects credit unions to be looked to for mortgages and home equity loans.

"Another challenge for small credit unions is the convenience factor," Norris said. "We only have two locations, but we are members of shared branches–we are CO-OP members. It's tough getting that across to our members. We have to focus to get the word out that we are convenient."