Why Credit Unions Should Benefit and Drive Communities

September 22, 2022 Lydia Adams

credit union in community

We are thrilled to welcome Steve Arbaugh, Senior VP of Finance and Chief Financial Officer at SECU Maryland, on to the podcast to talk about why credit unions are beneficial for their communities. Before joining SECU, Steve spent thirty years in commercial banking, developing leadership skills in various financial sectors.

In this episode of CFO Weekly, Steve joins Megan Weis to discuss challenges associated with working for a credit union and the importance of making a positive impact on the community.

In this episode, we discuss the differences between a credit union and a commercial bank, digitalization of the financial sector, why it’s more beneficial to invest in retaining an employee than hiring a new one, and why it is absolutely vital for businesses to have good relations with their communities, among other exciting topics.

Credit Unions Versus Commercial Banks

Quote credit unions versus commercial banks

Credit unions don't have to pay the dividends every quarter and can invest those dividends back into the business, which generally allows having competitive loan and deposit rates. Credit unions can also keep their fees quite reasonable compared to other financial institutions.

“We work very hard to advance our technology and do all those things that we need to be relevant going into the future. But a lot of what we do is relationship banking”

Inflation Effects

Quote Steve Arbaugh, Senior VP of Finance and Chief Financial Officer at SECU Maryland

As the US experienced high inflation, banks started to raise rates which increased loan rates for the credit unions. A credit union like SECU has to increase rates to maintain its margins, make profits, and stay in business. Credit unions also raise their deposit rates. But the biggest expenses for SECU go to employee compensation and benefits to attract and retain talent into the organization.

“It's much more expensive to lose an employee and have to go out and find one than it is to just retain them”

Credit Unions Investing in Community Relations and Other Beneficial Attributes

Quote why credit unions are beneficial for their communities

Recently, SECU exceeded 5 billion in assets. To celebrate this achievement, the company announced a million-dollar donation to the community for grants over the next five years. For credit unions like SECU, having a good relationship with its communities is beneficial and fosters goodwill amongst the locals, who are also potential customers, but it also helps the community thrive as a whole.

“The credit union movement was built on the idea of helping people in the communities we serve, and SECU has always embraced that commitment. We take our responsibility to support our communities very seriously”

For more interviews from the CFO Weekly podcast, check us out on Apple Podcasts, Spotify, and our RSS or your favorite podcast player!

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