Even though Hurricane Katrina affected roughly two-thirds of Mississippi credit unions, and Biloxi-based Keesler Federal Credit Union, the state’s largest credit union, suffered tremendous damage during the category four storm, business is brisk as credit unions recovered quickly to accommodate their members’ needs.
Mississippi credit unions report a robust $3.17 billion in total assets, $1.72 billion in total loans to its 515,000 members at 105 locations across the state.
“Although all Coast credit unions were affected and many sustained physical damage, we were awed by their response to the disaster,” said Charles Elliot, CLE, president and CEO of Mississippi Credit Union Association.
As many other organizations have done, credit unions are revising their business continuity plans, said Elliot. “Katrina, not Camille, is now the worse-case scenario,” he said.
The Mississippi Business Journal asked Elliot to discuss credit union trends, political and industry issues, market opportunities and challenges for growth.
Mississippi Business Journal: What issues are the state’s credit unions facing from federal proposed legislation?
Charles Elliot: Our greatest need at the federal level is risk-based net worth requirements. The current law requires the same capital levels for all credit unions. For the benefit of members, such as being able to provide even more favorable rates, fees, terms and service, credit unions should be able to maintain capital levels based on their individual safety and soundness.
MBJ: What issues are you facing of a political or business nature?
CE: Banks continue to attempt to restrict access to credit union membership. We continue to defend American’s right to choose their financial institution, and one of those choices should be a credit union.
The credit union share of the market has remained constant, about 6% of total assets, for more than 12 years. During this time, banks have generated record profits for their stockholders. Banks grow more in one year than the combined assets of every credit union in the nation.
MBJ: Where is the credit union industry headed in general, without a change in the tax-exempt status?
CE: The financial services industry is a world of constantly changing products, services and demands. Credit unions are continuously seeking ways to provide the financial services, products and conveniences today’s members want and need.
MBJ: What opportunities does the industry have before it?
CE: Credit unions are working to provide more people with an opportunity to improve their financial well being. We are continuing to expand service to those within our field of membership, especially those who are underserved or of “modest means,” as they are often unable to obtain service from traditional financial institutions.
MBJ: What are the challenges for growth among your member credit unions?
CE: One challenge for growth is convenient access for members. As financial cooperatives, credit unions often don’t have the resources to operate more than one branch or location. But, through the Shared Branching Network, more than 300,000 members (60% of total) of 15 credit unions in Mississippi have access to their accounts at 20 shared branch locations in the state and another 2,200 nationwide.
Contact MBJ contributing writer Lynne W. Jeter at Lynne.Jeter@gmail.com.