the biggest challenge is understanding ….
the biggest challenge is understanding the difference between a credit union and a bank.
Credit unions, like other cooperatives, are owned by their members who democratically elect members of the board of directors each year. Credit unions are notfor- profit organizations that exist to serve their members. Like banks, credit unions accept deposits, make loans and provide a wide array of other financial services. But as member-owned and cooperative institutions, credit unions provide a safe place to save and borrow at reasonable rates.
One of the most significant differences between credit unions and other financial institutions is in its governance. Credit unions are owned and controlled by the people, or members, who use their services. This is true for small employer-based credit unions to those who count their assets in hundreds of millions of dollars. Governance of credit unions is through a volunteer board of directors who are elected by members to manage the credit union.
Each year credit unions hold annual meetings which are open to all their members and where members can learn about operations and ask questions about how the credit union is being operated. Woods said it is always a challenge to get people to come to annual meetings.
“How do you get people to care?” she asked, highlighting one of the challenges facing credit union CEOs. With a wide range of financial options available for people today, she said it is challenging to show people the value of a memberowned financial institution.
Woods notes that she has not had an account at anything other than a credit union since she was a young child and is firmly committed to the credit union movement, putting the needs of the members first.
Unlike banks, where private investors benefit from profits earned, in credit unions profits are returned back to the members in the form of reduced fees, higher savings rates and lower loan rates as well as through support of community causes and activities.
Taylor Credit Union started as being open to members of the Stetsonville Farmers Union and prior to moving to their building on Hwy 13, had occupied offices in the upstairs of the former Medford Cooperative Service Station on Whelen Ave. in downtown Medford.
Woods is marking 39 years in the credit union movement this year and remains just as passionate about the benefits credit unions bring to their members and to their communities as a whole.
She said they share in the successes of their members and look to ways they can help by doing things such as providing guidance to members on ways to improve credit scores. She said credit unions are there to help people purchase their car or own their own home.
“We celebrate those successes,” she said.
While the commitment to serving the needs of members has not changed over the years, the technology involved in fulfi lling that mission has changed dramatically.
She explained that at the time she started her career 39 years ago, the credit union she was working at had one big computing machine that was shared by all the tellers. “We all had to stand in line and post transactions,” she said.
Every member had a paper card where transactions were recorded. At the end of the day, they would have to manually add all those cards. It was a slow and exacting process.
Like many in credit union leadership positions, Woods worked her way up through the ranks serving in multiple positions. She started her career as a teller even with a college degree. “That was the job I was able to get,” she said.
Woods knew she didn’t want to stay a teller and jumped at every opportunity to learn a new skill or to advance.
“Every time I was asked ‘Would you like to learn this?’ I would say yes,” she said. At one point her credit union’s bookkeeper had to be out and she was asked to fill in while the bookkeeper was gone. Woods quickly took over the position and when the other staff member returned that person ended up taking a different position.
Woods gives her career path of starting as a member services representative to the leadership position she currently holds as an example of that anything is possible as long as you are willing to put in the work needed to make it happen.
She attributes some of her success over the years to her previous CEO who encouraged every opportunity for employees to grow and learn. “We try to do that here too, we try to advance people whenever we can,” she said.
“The more information people have the more they can help with members,” she explained. By having an understanding of how the different areas of the credit union work together Taylor Credit Union employees are able to work better as a team which benefits the members.
“It is all intertwined,” she said.
One of the challenges in recent years has been the explosion in services delivered in electronic methods. Historically a credit union lobby was a busy place, especially on payday or when a lot of people come in asking about car or home loans.
When the COVID-19 pandemic caused traditional credit union lobbies to shut down, there was a shift to more electronic communication and access to accounts and services. This trend had already been taking place over the past several years, but was accelerated by the forced lobby closures. This has in turn put more emphasis on the “back office” operations services at credit unions compared to the forward facing services delivered through the traditional teller lines.
Woods explained that when they reopened the lobby last July, they had been used to a lot of foot traffic. “It really slowed down and was really quiet,” she said. At the same time, the back office operations and electronic service delivery continued to be booming. Woods noted that fewer people are cashing paychecks as more employers switch to direct deposit. She noted the business has changed while the volume of that business has grown substantially.
She recalls that big box computer everyone shared to the move to having shared personal computers between a few staff members. She recalls how in the mid-1990s it was a major step for every employee to have a computer at their desk.
“Today you can’t live without a computer. There is very little that is done by hand anymore,” she said. Many of the programs are internet based. “You can’t function without a computer today,” she said, noting that this is not always a good thing and she thinks back to things that were actually easier to do with paper.
While Taylor Credit Union still keeps a couple typewriters around for the rare need, virtually all forms are available electronically which allows for ever-increasing efficiencies streaming the process for both consumers and staff.
Woods said the most rapid changes she has seen have been in the past five to eight years with the explosion in cellphone applications and programs. “Every day it seems there is something different,” she said.
She notes services such as Venmo and Zelle offer new payment methods. “That has just changed tremendously,” she said. “It is almost overwhelming,” she said.
Just as overwhelming has been the rise in cryptocurrencies such as bitcoin.
With the rise in new technologies there has also been a rise in fraud as unscrupulous people continue to try to steal from others.
Woods said she sees it as a major responsibility for credit unions to help people understand fraud and educate members on the steps they can take to reduce and prevent themselves from being victims of fraud.
“Fraud has mushroomed throughout the pandemic,” she said.
While they are seeing new fraud schemes emerging, there has also been a resurgence in old schemes such as people being given fake checks or people buying stuff over the internet and not getting their merchandise. Woods describes the internet as being a tremendous catalyst for fraud. She said they work to educate members with developing spending plans and helping them not get sucked into fraud.
Just as times and opportunities for fraud have changed, so have the regulations that credit unions and other financial institutions have to operate under.
She said the first explosion in regulation was following the September 11, 2001 terrorist attacks and the passage of the Patriot Act which had major changes on financial transactions. She said another wave of changes came shortly after the 2008 bubble and for a few years she said it seemed there was one new rule after another. Rules again changed over 2010 and 2011 and continue to grow in layers of complexity. This presents a challenge for those who work in credit unions and other financial institutions as they have to know and follow these rules.
“Regulation isn’t always bad,” Woods said, noting that many times regulations are changed to provide protections to their members. “They are there to protect consumers,” she said, noting that consumers also share the burden of protecting themselves and hold some responsibility with the choices they make.
Increasing consolidation in financial institutions is an ongoing challenge facing credit unions and communities across the country.
“There is still a purpose for a small credit union,” Woods said, explaining that smaller credit unions have much greater ties to their individual communities and are focused on the communities they are located in and service. “Bigger is not always the answer,” she said.
While Taylor Credit Union’s goal is to continue to grow over time, Woods said the credit unions seeks to grow at a steady pace as they retain their commitment in being a local financial institution and providing for financial services to members.
She said she sees participating in building the community and caring for the people they serve as being important for the credit union going forward.
She said with giant financial institutions it is possible for them to lose sight of the community. She said there is real value in people being able to recognize leadership both the credit union management and members of the board of directors.
“It is important for people to see each other,” she said. “Supporting each other as a community is very important.”
For Woods it comes down to the core values of compassion, trust and empathy as they work cooperatively with their members to continue to build strong communities.