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Kirk Kordeleski Bethpage Fed Credit Union.
October 29, 2010 @ 12:00 am EDT
This morning we held our LIMBA gathering in the offices of Bethpage Federal Credit Union (BFCU) and were educated about credit unions in general and BFCU in particular. Kirk opened his talk with a primer about credit unions’ structure and history. Credit unions have been one of the few success stories to come out of the financial crisis.They are not banking institutions; they are financial cooperatives that offer banking services. Their charters are such that they were restricted from engaging in the risky investment strategies that proved to be so damaging to many banks and other financial institutions This has resulted in BFCU having a strong capital base to work with as we emerge from the recession.
One of the interesting things about a credit union is that it cannot raise capital by selling equity as the large banks have been doing recently to recapitalize themselves. Their capital comes from deposits and the success of the instruments and products that they
invest those deposits in. Their boards are all volunteer, and have evolved from being oriented around a single company’s employees to serving defined communities. The founder of Filene’s department stores is credited with fostering legislation and founding
organizations that lead to the popularization of credit unions for corporate employees to obtain reasonably priced financial services.
BFCU was founded by Grumman employees in the early 40’s, and grew through adding company associations with some of the larger employers on Long Island, including its next door neighbor Cablevision and Computer Associates in Islandia. Membership was also restricted to employees of those companies. Subsequently, its charter was changed to include all of Nassau and Suffolk counties so that anybody that lives, works, worships, or regularly conducts business in Nassau and Suffolk can become a member. BFCU has invested heavily in their community strategy since changing their charter and it is beginning to show results. Their sponsorship of the Jones Beach Air Show both honors their Grumman roots and serves their expanded Long Island community.
Under Mr. Kordeleski’s guidance over the last ten years, BFCU has grown from $950MM in deposits to nearly $4B and 180,000 members. It is the #1 credit union in the country measured by deposits. It has twenty four branches with three more under construction. BFCU plans to open three to six each year to grow eventually to fifty or sixty branches.
Value, service and convenience returned to the shareholders are are its guiding principles. Since BFCU is a co-op, they don’t have the same profit pressures that retail banks do. As a result, community involvement is a foundational principal. BFCU is expanding its focus to help underserved communities, placing branches in disadvantaged neighborhoods and communicating with a multicultural marketing strategy. Convenience is emphasized with surcharge free access to ATMs in 7/11 stores, Walgreens, Costco and King Kullen. The King Kullens in Commack and Levittown also host BFCU branches.
They are expanding into business services also. The initial focus is on real estate, but lending products and SBA supported lending is forthcoming. Another strategy is to price their product to be number one or two in the markets that they serve, whether that is interest
rates earned on deposits or charged on loans. These approaches have resulted in consistently high JD Power rankings for satisfaction.
Once again it was another educational opportunity to be at LIMBA meeting with an excellent speaker and learn more about an underappreciated Long Island institution that can serve us all.
Please join us for these Friday morning sessions that finish the work week off on a high note and never fail to be of value.
Recap by Craig Plunkett.