New Jersey League Earns NCUF Innovation Grant for Small Credit Unions

Click to visit the New Jersey Credit Union League.The New Jersey Credit Union League (NJCUL) has earned a $30,000 Innovation Grant from the National Credit Union Foundation (NCUF) for its initiative to help small credit unions survive.

In a state where more than 60% of credit unions have less than $10 million in assets, NJCUL President Paul Gentile emphasized, “It’s imperative that these credit unions have the resources to address all the challenges they face.”

Top 5 Challenges

NJCUL has prioritized the challenges through its Small Credit Union Task Force. The task force not only includes small credit unions, but also adds perspectives from large credit unions, corporate credit unions, and the National Credit Union Administration (NCUA).

The task force identified five primary issues that hinder small credit unions’ current and future success:
  • 1) Lack of board involvement and participation;
  • 2) Lack of strategic planning or direction;
  • 3) Not committing the resources necessary to improve the credit union;
  • 4) Lack of management desire to grow – either accepting the status quo or buying time until retirement;
  • 5) Not enough focus on getting where the credit union needs to go.
“Even some of the most committed small credit union managers are often too busy with day-to-day operational issues,” Gentile related. “Time does not permit them to develop or implement long-term planning and growth strategies.”

Small Credit Union Initiative

That’s why NJCUL’s Small Credit Union Initiative is focusing on strategic planning, board involvement, and education.
Volunteers and management at Franklin-St. John's CU in Newark, a church-based credit union with 372 members and $210,000 in assets“Through education, we strive to give board members and management the knowledge they need to better oversee and manage their credit unions,” Gentile explained. “Our desire is to help boards and management work together to ultimately make each credit union a better financial institution for their members.”

Twelve credit unions up to $20 million in assets have been accepted to participate in NJCUL’s Small Credit Union Initiative.

The photo on the right shows volunteers and management at Franklin-St. John's Credit Union in Newark. This church-based credit union, with 372 members and $210,000 in assets, met with a league field representative to discuss growth opportunities.
NJCUL Field Representative Angel Santos (seated on the left) and Salem Baptist Federal Credit Union President Ethel Bond (standing) begin the Small Credit Union Initiative with volunteers and management.Each credit union must undergo a membership survey,operational analysis, and a facilitated peer review as part of their strategic planning.

NJCUL field reps will provide continuous follow-up with each credit union for up to 24 months.

In the photo on the left, NJCUL Field Representative Angel Santos (seated on the left) and Salem Baptist Federal Credit Union President Ethel Bond (standing) begin the Small Credit Union Initiative with volunteers and management in Jersey City.
“We stressed to all credit unions that their board, management and staff have to be committed to ensure that their credit unions will be able to meet the changing needs of members 10 or 20 years from now,” Gentile pointed out. “They must be willing to accept help from others and to help themselves.”

NJCUL is committing to match the NCUF Innovation Grant by spending $30,000 of its own money. The New Jersey Credit Union Foundation is contributing another $10,000.

Seventh of 14 NCUF Innovation Grants

This is the seventh of 14 Innovation Grants to be approved by NCUF in 2008. Innovation Grants are made possible by investors in the Community Investment Fund (CIF).
Click to see how to invest in the CIF!During the 2008 Innovation Grants application cycle, NCUF received 41 applications requesting over $2.2 million in funding. This was nearly four times the $600,000 budgeted for Innovation Grants through the CIF.

“Grant requests were much higher this year because the needs are much greater,” relates NCUF Deputy Director Steve Bosack, the Foundation’s staff liaison to the NCUF Grants Committee. “More credit unions are seeking innovative ways to serve people with low wealth and modest means.”

“More credit unions than ever are investing in the Community Investment Fund,” points out NCUF Executive Director Steve Delfin. “Yet here’s the paradox: even though CIF balances reached an all-time high, the fund has returned a much lower percentage of grant dollars in 2008. This is due to federal interest rate cuts from January through September. So especially during these challenging economic times, we thank all 650-plus CIF investors, the NCUF Board and Grants Committee for allowing us to maintain our $600,000 in Innovation Grant commitments and reward credit unions serving low-wealth households.”
Click here to see how to invest in the CIF!