Credit Unions Hit the Newspapers…….

The current recession has been big news for a long time now. There has been much written in newspapers about the struggles of many industries with much attention paid to the struggles of the large investment banks who received government bailout money.

Things are starting to strike a little closer to home as the Minneapolis Star Tribune ran a series of articles in the past week identifying Minnesota banks and credit unions that are struggling in this poor economy. Most of the institutions cited were based in the Twin Cities.

The newspaper articles did a fine job highlighting problems affecting some community banks and credit unions and how these institutions brought some of the pain upon themselves with poor business practices. What it didn’t do a good job of was clarifying that the vast majority of credit unions are extremely sound and doing just fine.

This is important stuff and I want to clarify that North Shore Federal continues to perform at a very high level: we are on track to have another excellent year financially and projections for 2010 are even better. We issued another Patronage Rebate at the end of 2008 and will do so again in December of 2009. We also have the highest safety and soundness rating from our regulator.

The “secret” to our success is this: our primary business strategy is to meet the needs of North Shore Federal members, period. We don’t care about being the biggest credit union – we just want to be the best credit union we can be for our members. We don’t pursue certain loan or investment strategies simply because everyone else is doing it or because we are chasing higher returns. Rather, we focus on what our members want and need. Thankfully, the members of North Shore Federal are using good judgment in the products and services they request, meaning we can run a smart business while taking care of our members. Let’s use sub-prime mortgages as an example. Our members have never needed that risky product so we never have been involved with them either as loans or investments. Unfortunately for many other financial institutions, they were a central part of a risky strategy of pushing the boundaries in search of greater profits. NSFCU members never placed us in that situation and we are all better off for it.

You, as members, have done your part as well. We have very low loan losses because our members have a strong tradition of paying their debts, even through tough times. As well, most of our members do most, if not all, of their business with us which is the foundation of our success.

This is truly an example of benefiting from doing business locally. If you ever have a question or concern about something you read or hear concerning financial institutions, call me or send me an e-mail (marks@northshorefcu.org). I would be happy to discuss it.

Mark