North Carolina’s State Employees’ Credit Union reached a major milestone in recent years. There is now at least one branch in each of the state’s 100 counties.
The 75-year-old credit union was chartered with only 17 members. Today, its membership base is close to 1.8 million and growing. And a lot of this growth has come in the past five years, since the financial crisis and since retail banks have struggled to win back consumer confidence.
It’s hard as you-know-what trying to get in and out of the crowded parking lot of the State Employees’ Credit Union on South Duke St. in Durham. And I am not alone. Yvonne Brodie stopped by this branch because it’s close to her job, not because she wanted to.
“I like the State Employee’s Credit Union because when I make my deposits I can get it out the same day. I don’t like this one because it is very crowded," said Brodie.
Well, for Durham residents some relief is on the way. State Employees’ is renovating that old Golden Corral Restaurant on Durham Chapel Hill Boulevard into a new branch. Brodie will drive all over town to find a State Employees’ Credit Union; Guess Road, Lowes Grove. What she won’t do is stop by a commercial bank.
“I started out at First Union. First Union was bought out by Wachovia, and then bought out again by Wells Fargo, and I don’t like all the changing and names and all that stuff," said Brodie.
A lot of people fell out of love with their banks during this latest financial crisis. Customers complained of everything from rushed foreclosures to higher checking fees. That’s why Sharon Hinton left her bank. I ran into her in the State Employees’ parking lot as well.
“Yeah, I was with CCB, and with CCB, I think it cost more for me to keep my money in the account than I had money. I said, 'we need to switch,'" said Hinton.
No matter the reason, Jim Blaine is welcoming State Employees’ members with open arms. He’s been the president and CEO of State Employees’ for 35 years.
“In this day and time, our members need all the help they can get, it’s a tough economy. The value proposition has really increased at the credit union, plus we are very nice people, and that always helps," said Blaine.
State Employees’ is considered a big credit union on a national scale. It is approaching $27 billion in assets and has a membership base of 1.8 million people. Blaine says there are several reasons for this growth – like a bustling population, more branches and ATMs and expanded services. But he says you can’t beat the cost of doing business
“One, we are quite often the low cost provider of consumer financial products. So we have one of the lowest cost of operations of any financial institution in the country," said Blaine.
Professor Anil Shivdasani is a banking expert at UNC's Kenan-Flagler Business School.
“From a large bank’s perspective, I think that they’re facing a unique set of pressures that the credit unions are not," said Shivdasani.
He says these pressures come in the form of federal regulations that require banks to keep more capital, creating a rather aggressive fee-based model.
“So I think with respect to the small depositor, where your typical mom and pop depositor in the US, the commercial banks have been in a lose-lose situation," Shivdasani.
In the meantime, State Employees’ Credit Union is taking its low-cost alternative model to the bank. Besides opening branches in every county across the state, the credit union is adding to Raleigh’s downtown skyline with its new offices on Salisbury Street which should be occupied late next month.