Its roots began as a small charter credit union, established by Reverend Arthur Decary of St. Andre’s parish to primarily help its low-income parishioners have easier access to a financial institution. These days, Ocean Communities Federal Credit Union (OCFU) remains a strong, viable and healthy modern-day financial cooperative. Withstanding recessions, strained balance sheets, and a near miss with permanent closure, OCFCU has emerged stronger and savvier. Profile chats candidly with three of OCFCU’s officers, Paul Peterson, chief financial officer; Pam Laverriere, vice president of lending; and Judy Morin, vice president of financial services, about how the little credit union that could bounced back—and why business is now better than ever.
Morin: Even with a long-standing relationship in the community, we came awfully close to ending our tenure. It was timely that a special case officer with the National Credit Union Association (NCUA) walked in and asked to see our CEO. Within 24 hours we cut our staff by 50 percent and began the process of restructuring how we did business. Our capital, at the time, was dangerously low due to a couple different variables: inadequate lending and collection practices. Today, we are a very healthy credit union with approximately 12,000 plus members and over $140 million in assets. Our interim CEO, Bob Begin, continues to spearhead our growth.
What key principles guided the credit union leaders as they looked to rebuild and restructure the business?
Peterson: As a modestly sized credit union that must find ways to compete not only against megabanks, but also locally owned banks and thrifts, credit unions, and non-bank providers of financial services, we knew that we had to find ways to differentiate ourselves from the clutter of the marketplace. Since we are, most of the time, too small to take on the high costs of developing our own “difference makers,” we concluded that it was critical for us to embrace key strategic relationships with companies that have established themselves as leaders in their field, either locally or nationally. There are two such strategic partnerships that represent the best examples of Ocean Communities’ identifying a need and finding the right partner that specializes in serving that niche: BancVue Limited and CUSO Mortgage Corporation.
Can you elaborate on the benefits of partnering with BancVue and CUSO?
Peterson: BancVue Ltd’s rewards checking product lines [will] allow us to eventually extricate ourselves from our past history of heavy reliance on certificate accounts and focus more on increasing earnings through debit-card interchanges, courtesy pay fees, and electronic delivery of monthly statements. This also allowed us to increase core checking savings accounts, which are the true bread and butter of every financial institution. Over the past three years through the use of BancVue’s national brand, Kasasa, OCFCU has seen a 56 percent increase in checking accounts and increased usage as a primary financial institution for members.
CUSO Mortgage Corporation headquartered here in Maine is jointly owned by eight Maine-based credit unions, including OCFCU. Although OCFCU has long been a strong mortgage lender, many periods in the past promulgated by funding limitations left smaller institutions like ours facing a shortage in expertise for the direct sale of mortgages to the secondary market. This naturally forced the credit union to raise its loan rates and, effectively, price itself out of the mortgage-loan market because of lack of funds. We needed a relationship with a mortgage-banking entity that would give us immediate access not only to the secondary market but also to a strong mortgage-servicing operation. CUSO was the perfect partner for this initiative.
What are some examples of the credit union’s efforts to provide all-around service to its members?
Laverriere: When most banks are exacting tighter lending practices, OCFCU’s venture into lending to high-risk borrowers has brought success by building new relationships with members who really need guidance and counseling in order to be successful. It is essential that members have a financial institution that will go the distance with them. Because we have committed ourselves to building long-term relationships, we have also experienced an increased interest margin. Essentially, the attentiveness and willingness on our part to simultaneously provide loans for members who would willingly pay much higher rates to unscrupulous lenders equates into a win-win for all.