United Federal Credit Union

Growing support from within

Business View Magazine interviews representatives of United Federal Credit Union, for our focus on Top Credit Unions in the U.S.

Humble beginnings often reveal themselves on the heels of success, and in the case of United Federal Credit Union, that past arises again and again through their outstanding client service, mindful banking solutions, and the ongoing mission “to empower members to their ultimate potential.” Headquartered in St. Joseph, Michigan, United was founded in 1949 by five employees from the Whirlpool manufacturing plant. It has since grown to be one of the top 100 largest federally-insured credit unions in the U.S., with 38 branches covering six states (Michigan, Ohio, Indiana, Nevada, North Carolina, and Arkansas), and assets in excess of $3.3 billion.

President & CEO, Terry O’Rourke

In United’s earliest days, a part-time volunteer staff ran the credit union from a cash box in the personnel office. Since that time, they’ve grown their membership base to about 177,000, but the personal touch and spirit of volunteerism remain the same. Today, their credo “strength in numbers brings opportunities and prosperity to all” matches this new image perfectly. “We’re very conscious that every action we take has an impact on our members,” offers Duane Wilcoxson, Chief Information Officer. “That’s why we’re very thoughtful about that.” Terry O’Rourke, President & CEO, adds, “Our team lives by the motto: We help first, and there’s a member at the end of every request.”

The United branch staff is also highly engaged with the community. According to Kimetha Firpo, Senior Vice President of Human Resources, “The whole management structure is designed to help us connect with communities in each of our locations. We emphasize that further by offering a Volunteer Day Off. Each employee gets one per year, and they can take it however they want – to support the organization, or to support a community cause that speaks to them.”

United also runs a Pay It Forward program that provides $20 to every employee to give to a person, family, or organization in need. “The program grew out of our annual holiday party planning,” says Firpo. “Staff were brainstorming ways to celebrate with our teams, and they felt they should think about others during the holiday season. They decided to take the funds that were earmarked for internal holiday celebrations and give them back to the community.” In 2020, United donated more than $17,000 to 63 different individuals and community organizations across six states during its 13^th annual Pay It Forward initiative. “What’s exciting is that staff members make donations on top of what United gives them,” Firpo adds. “Internally, we share with each other how we’re supporting people in the community. I think it’s really fitting for the time of year, and it reinforces what we’re all about.”

Credit unions understand better than most financial institutions that non-financial factors, such as client relationships, have long-term financial impact. O’Rourke believes United’s acclaimed reputation, credibility, and innovative banking products are rooted in “Team United” and their employees’ unwavering commitment to taking care of members. “Their performance over the COVID-19 pandemic has been nothing short of heroic,” he says. “Despite personal challenges that might have impacted them, everybody showed up to continue to serve our members. Because that’s who they are, and that’s what they care about. Any success we’ve had is really due to our employees.”

Over the past several years, United has worked tirelessly to be what O’Rourke affectionately calls a “listening organization”. He shares, “There are multiple ways our team members can let us know how we can improve in serving our membership. The reason people like working at United is because they know their voices are heard, and that they can make a difference.”

Senior Vice President of Human Resources, Kimetha Firpo

A common purpose can be a powerful motivational tool, and Firpo believes United’s mission is what attracts such highly skilled and dedicated individuals. “They like the idea of working someplace where they can help people,” she says. “But what’s really interesting about our organization overall is our footprint is so broad. That allows us to have a diverse set of viewpoints to understand how to serve members in different markets.”

United is a multiple common bond financial institution. Under this charter, the credit union can welcome businesses and groups from around the areas they serve as Select Employer Groups, or SEGs. These multiple fields of membership allow them to easily expand into different markets and bring new members in without the artificial borders created by community charters. People who live, work, or worship in one of the communities served by United are welcome to join.

The credit union has no concrete plans to expand United’s market footprint as United has “tremendous opportunity” in its existing markets, according to O’Rourke. “We’ve recently started an expansion program in northwest Arkansas, and we’ll continue that. We’ve also been expanding in northern Indiana, and we’ll continue that. We’ll certainly look for opportunities in places that are contiguous to our existing markets, but we’ve got plenty on our plate as it is.” One of those items is the partnership they’ve recently announced with southwest Michigan-based Edgewater Bank. “We’ll align the resources of the two organizations and that will benefit the financial well-being of our community,” says O’Rourke. “We’re very excited about that acquisition.” Due to the impact of the COVID-19 health and economic crisis, it was one of only six credit union bank purchase deals announced in 2020.

O’Rourke admits, “The biggest challenge in the industry today is the economy – that, and the interest rate environment. With interest rates being at basically zero and having such a flat yield curve, credit unions, like every other financial institution, are experiencing compressed net interest margins. That puts pressure on our income. We have anticipated charge-offs from the economic environment, but we’ve been preparing for it by building up our loan loss reserves.”

On the positive side, United has invested heavily in mortgages, an industry that has flourished amidst a complex and often contradictory patchwork of forces across the U.S over the last year. “The mortgage business has been extremely strong over the past several months,” says O’Rourke. “With the interest rate environment being what it is, people have been refinancing and purchasing homes because they’re able to get such a great deal on mortgages. That’s really benefited United and allowed us to continue to perform very well financially, despite the compressing net interest margins and additional loss provisions that we are building up in the event of charge-offs.”

Chief Information Officer, Duane Wilcoxson

The cooperative even did some ‘pandemic-proofing’ before the words “novel coronavirus” or “COVID-19” became part of everyday speech. “We were already on this path of digital transformation before COVID-19 forced the closure of our lobbies,” says Wilcoxson. “Our digital investments support our value proposition to our members, which is that we know them and we deliver what they want; simple, personalized experiences, whenever and wherever they choose.”

United already had a pretty robust roadmap for digital coming into 2020 and, at the beginning of the year, they were hitting that pace well. Wilcoxson explains, “The team was already working on launching a brand-new online mortgage origination application through a partner called Blend to make the online mortgage process very streamlined and efficient. In the first quarter, we also made some enhancements to our online account opening, so that members could open a new deposit account in under five minutes. Recognizing the need to improve virtual messaging channels for members, we made investments in this area, as well. We expanded our traditional chat capabilities and added enhanced text messaging channels through Apple and Google devices and improved the experience of chat through Facebook Messenger, creating more spaces where members could come to us. As COVID-19 hit, we saw members taking advantage of these channels and leveraging our existing online calendaring and appointment scheduling products.”

He adds, “It was a great situation where our strategic vision and the external landscape came together at the same time and allowed us to continue to support our members with a high level of service through the pandemic. Within our industry, you hear a lot about the fact that COVID-19 accelerated plans that people already had in place. For us, we were already in acceleration mode, already working on that digital transformation. We were slightly ahead of the curve. I’ve talked to some of our peers in the industry and got the impression that they were more reactive. As for us, we were already on that pace.”

O’Rourke concurs, noting, “Several years back, we went down that path of investing in our digital channels. They say luck is when preparation meets opportunity. Well, when our lobbies shut down, our members continued to receive excellent service through our digital channels because of the investments we’d made in the years leading up to that moment. But our goal isn’t to move members from one channel to another. Our goal is to provide the same excellent level of service, no matter which way they decide to interact with us.”

AT A GLANCE

United Federal Credit Union

What: One of the largest federally-insured credit unions in the U.S.

Where: Headquarters in St. Joseph, Michigan

Website: www.unitedfcu.com