By Jessica Connor
For years, the S.C. Methodist Conference Credit Union has been there to help young pastors buy their first car, establish credit and take out loans with fair interest rates.
Now, thanks to hard work and some hoop-jumping, those services are available to every member of a United Methodist church in this state.
Late in 2011, the S.C. Board of Financial Institutions granted the credit union an expanded field of membership to include not only clergy, retired clergy and employees of United Methodist institutions, but also church members.
We are just thrilled, said the Rev. Rex Wilson, credit union chief executive officer, who said the decision has been four years of tough research and legwork in the making.
Necessary for growth, good for the people
Credit union leaders had wanted to expand the field of membership for some time, but were limited by regulations and their bylaws. The credit union s attempts at expansion had met with resistance from state banking officials, who for a variety of reasons did not allow the expansion, Wilson said.
But the credit union pushed for it. The long-term health of a credit union depends on a thriving, active pool of members, Wilson said. But because of the membership limitation, the entire pool of people they could draw from was less than 5,000. The largest number of members they ever had was 1,900 “ quite small in comparison to other banks and credit unions.
It s not enough for an institution, Wilson said. We are well capitalized, but we have limited memberships, and our demographic is older.
Unless they could open themselves to a larger pool of members from which to draw lending opportunities, they were at their peak of growth “ and the only way left was down.
We needed to get it done, Wilson said.
A larger membership pool will enable the credit union to expand services and better serve congregations, said James Bradley, retired economics professor and former FDIC (Federal Deposit Insurance Corporation) examiner who served on the credit union s Committee for Expanding the Field of Membership.
I think it s a good thing, Bradley said. With the limited membership field, we couldn t grow our size enough to justify putting in some of the electronic-based sorts of things that banks offer now. ... We re not looking to become huge “ we may be the smallest financial institution in the state “ but we will be stronger and able to offer more services, and of course be available to more people.
As a financial ministry of the UMC in this state, the credit union loans more graciously than some other banks, and their interest rates are less than or on par with other financial institutions “ particularly the high-interest payday lenders some of their clients have utilized in the past, Wilson said.
There is a significant percentage of loans we make that no one else would make, Wilson said. And some pastors have financial difficulties from student loans and other things. They often start out in a hole that can be very difficult to get out of.
Now, Wilson said, the credit union is not just a financial institution, but a true United Methodist financial institution, one that can be fully connectional and helpful for all UMC members in the state.
The Rev. Bob Vincent, chair of the committee and pastor of Shady Grove UMC in Irmo, said he is excited about the opportunity, which he, too, believes will further connectionalism.
We re looking forward to rolling this out and being able to provide financial services to some of those who are in need, and think it will be a wonderful ministry for the S.C. Conference, Vincent said.
˜A massive amount of work
Getting from A to B was no easy feat. It was not a matter of the credit union deciding they wanted to expand the field, but rather getting the state Board of Financial Institutions, which governs banks, credit unions and other institutions in S.C., to grant them permission.
Wilson said his predecessor, Andy Cox, tried to expand the field of membership but was unsuccessful. Early efforts by Wilson, too, were met with resistance “ in 2008, shortly after he started as CEO, Wilson broached the expansion idea with Commissioner of Banking Louie A. Jacobs of the state BOFI, who informed Wilson he was not willing to recommend the expansion.
I was surprised (he said no), Wilson said. I told Jacobs it s not some cloudy, ˜we don t know who they are; they just show up in church thing. We can go to every church and get their names.
But Jacobs wasn t convinced, according to Wilson. So the credit union tried a different tactic, forming the membership expansion committee filled with seasoned professionals to research ways they could accomplish their goal.
The committee soon discovered that most, if not all, credit unions for annual conferences nationwide had an expanded field of membership “ why not South Carolina? The committee felt the S.C. Conference s credit union met the regulatory requirements for an expanded membership field because it represents the conference, which represents the full church. The UMC has a charge conference in every church, and the Annual Conference publishes a journal reflecting its numbers. It all added up.
So they began the arduous task of proving their hypothesis. They reached out to the National Credit Union Administration, posing the hypothetical question (which just happened to be their situation): If I were a United Methodist credit union, and my bylaws said pastors of churches were the membership, and I wanted to expand to members of churches, how would that be handled?
To their delight, Acting Regional Director Herbert Yolles wrote back saying not only would this be allowed, but the NCUA would advise them to use the EZ form.
In other words, it s that simple, Wilson said. We had him saying it d be easy.
Armed with that information, the committee convinced then-State Treasurer Converse Chellis to arrange a meeting between them and Jacobs, thinking permission for the expanded field of membership would be certain.
Instead, at the meeting in spring 2010, Jacobs requested a detailed business plan for the credit union “ a multiyear blueprint for growing the credit union, as well as a pro forma financial statements.
While it wasn t the easy answer they d hoped for, the exercise ended up being a blessing in disguise, credit union leaders said.
What they did was to help us to think through what they felt was necessary in order to be able to approve that, said Steve Barden, credit union board chair who is also business administrator of Trenholm Road UMC in Columbia. So part was from their perspective, they wanted to know we realized we d have to plan for all of these contingencies, but in a way this guided us to do these things to be comfortable and confident in our ability to move forward. ... It was beneficial to the credit union.
While working on the business plan, the committee also secured the signatures of several hundred Annual Conference members all over the state, who said they would be interested in joining the credit union if they could.
Finally in September 2011, their work complete, the committee presented to Jacobs and the BOFI a business p
lan with pro forma statements, signatures and other supporting documentation “ what Wilson called a massive amount of work.
While the committee was prepared to present their case to the BOFI, on Oct. 18, Jacobs requested that only Wilson come to his office for a private chat about the expansion.
He grilled me for four hours, from 9 a.m. to 1 p.m., asking me every question he could think of about our plan to make sure I really understood this, Wilson said. And when that meeting was done, he said, ˜I want to do this.
Weeks later, the BOFI granted the credit union formal approval.
Ready to go
Now, research done and permission granted, the credit union is ready to begin accepting new membership applications. They hope those who are seeking loans will join the credit union.
You start by joining and paying your $1 fee, then you deposit $5 in the membership account, and then you have access to all the financial products we offer, Wilson said.
In addition to car and home loans and revolving credit, the credit union has a variety of products, such as their Holiday Helper Loan, a low-interest loan to be paid off within one year to help people avoid racking up their higher-interest credit cards for Christmas giving.
We re very excited about it, Barden said. With more growth comes more financial challenges, and I m sure other challenges as well, but we are excited about the opportunity and are looking forward to working through those situations.