One year after the members of Northern Credit Union voted to convert the credit union to a state charter from a federal charter, the credit union is reaping the benefits.
“The primary benefit since the conversion has been the ability to increase our field of membership,” said Alexa Bennett, AVP, marketing and R&D. “We previously had three counties and now we have eight in total.”
More specifically, the Watertown-based credit union has seen a field of membership increase, which includes opening another relationship center.
“With our FOM increase we are opening another relationship center in Massena – about 2.5 hours away from our corporate office,” said Bennett. “Our mortgage production has been strong in this area and we are excited to service our existing, and new members in Northern St. Lawrence County with this location.”
The biggest difference from converting from a federal charter to a state charter has been an easier and more efficient process for members to bank with the credit union.
“FOM has been easier to qualify members to bank with us,” Bennett said. “Especially when it comes to partnerships with local business for their customer’s financing. For example, say a member in Oswego County was purchasing an RV at one of our partners, we wouldn’t have been able to finance them. With our new FOM, we now reach three counties south of us and two more to the northwest. It puts us in a better position to finance loans with our vendor partners and helps us build relationships with new ones.”
The New York Credit Union Association has long advocated for improvements and enhancements to the state credit union charter. In recent years, the Association has seen several key improvements to the state charter implemented by working closely with the Legislature, the state Department of Financial Services and Gov. Andrew Cuomo’s administration.
The Association has successfully worked with stakeholders in state government to:
pass a law that allows state-chartered credit unions to mix and match fields of membership;
improve the process for obtaining low-income designations;
ease restrictions on school banking programs;
set the minimum interest rate to be paid by state-chartered financial institutions on escrow accounts in connection with loans secured by mortgages on one-to-six family residences; and
issue guidance that encourages state-chartered financial institutions to establish banking relationships with properly run marijuana and hemp businesses.