story & photo
by Alexis Ann
Interview with Warren Scholl,
CEO, CorePlus Federal Credit Union
What is a Credit Union?
A credit union is a group of people who save together and lend to each other at a fair and reasonable rate of interest. Credit unions offer members the chance to have control over their own finances by making their own savings work for them. Regular savings form a common pool of money, which in turn provides many benefits for members.
The definition most commonly seen is: A financial cooperative organization of individuals with a common affiliation (such as employment, labor union membership, or place of residence). Credit unions accept deposits of members, pay interest (dividends) on them out of earnings, and primarily provide consumer installment credit to members.
Core Plus Credit Union, chartered in 1936, has seven branches in Southeastern Connecticut with its corporate headquarters in Norwich. Warren P. Scholl, CEO, talks about history of the credit union, “On Monday, March 30, 1936, an organizational meeting took place in the Wauregan Hotel by the Norwich Teachers League and the Norwich Federal Teachers Federal Credit Union was founded by 27 members and $15.00.”
“Membership is open to anyone who lives, works or worships in New London or Windham Counties.”
“Today, membership is over 21,000 and over $200M in assets,” states Warren. “CorePlus is a federally chartered, member owned, not for profit cooperative. We are a not for profit, not for charity, but for service Credit Union.”
“We’re here as a financial cooperative. The savers provide us with money to lend to our borrowers. And, the borrowers pay us a return that allows us to keep savers. There have been times when money was tight that we’ve had to say, ‘Nobody borrows until somebody saves.’ There is a direct relationship between the saver and borrower at a credit union. They are members and owners of the credit union and essentially, my boss.”
CorePlus benefits from unusual stability and vision in its leadership. A board of directors democratically elected by the membership runs the credit union. “All board members are volunteers and members,” explains Warren.
Alexis: “What is the difference between a bank and a credit union?”
Warren: “Unlike some banks who are in business to turn a profit for the stockholders, our primary beneficiaries are the members-the owners. Not for profit. Not for charity but for the service aspect. So, when we look at branching we’re considering deployment of atms, or points of access for people, which equates to member service.”
Alexis: “Are your rates lower than bank rates?”
Warren: “Generally, our loan rates are lower than banks but not always, depending on the products. The general rule of thumb is that credit unions offer lower loan rates and higher rates on savings. Mortgages are based on national rates and trends. We get prices for our mortgages everyday. Clearly, the government wants us to go down to 4% on mortgage rates. I’m expecting that that’s going to happen. Now, the opposite side of the coin is, as those loan rates go down, the deposit rates are going down, too. Those people who are depending upon returns from their savings are feeling a pinch. I struggle with how to balance the responsibility to our borrowers and the responsibility to our savers.”
Alexis: “Is there a formula for that?”
Warren: “It’s a basic spread between cost of deposits and the returns on investments or loans to members. Our best investment is always in loans to members. We want to make sure we get the money out to our members.”
“We’ve been on a refinancing boom for the past couple of months or so. The rates are attractive for re-financing.”
“Credit unions developed from a social movement of people helping people. We are a consumer-based financial cooperative. Our capital is 9.2%, which is a good position for our members. Our overall membership increased by 7.8% last year. CorePlus is safe, sound and secure.”
Alexis: “How does CorePlus compare to other credit unions?”
Warren: “Our focus on the individualized personalized service sets us apart from other credit unions. We have more of an infrastructure, more of a branch network than a lot of other local credit unions. We have a great staff and provide better service. Also, we are access focused. Five of our seven locations are in former bank properties. What does this tell you?”
Alexis: “How are you regulated?”
Warren: “We are regulated through the National Credit Union Administration. The regulations are similar to those of banks. We are a highly rated credit union and our cycle is every 18 months. We’re very proud of our high marks. We continue to earn a five star rating from the Bauer Financial each year and we’re very happy with that.”
“Our members are the community so their needs are the same as our needs. CorePlus believes in giving back to the community where we work, live and play. As written in our mission statement, ‘Furthermore, we recognize our responsibility to be involved in our community and the credit union movement.’
“CorePlus and our employees donate money to local needy organizations. We donate hundreds of hours serving on boards and committees. Many of our volunteers help support and improve the quality of life in the communities we live and work in. For example, Angela Arnold, director of marketing, is very active in the community and we’re proud that on May 5th, she will be the award recipient of Citizen of the Year.”
“We are very proud of our intern program. A good percentage of our interns from NFA end up working for us. Our shred days are an example of our continued commitment to our local schools and our strong CorePlus team’s desire to help.”