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Sunday, 20 December 2015 22:52

Q&A: Scott Sylvester, COO, Consumers Credit Union | Kalamazoo

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Consumers Credit Union has been riding right along with the rest of the industry in Michigan, putting up strong growth in membership, deposits, and loans — both to consumers and small business owners. COO Scott Sylvester expects the good fortunes to continue in 2016 for both the industry and Consumers Credit Union, which has about $650 million in assets and nearly 67,000 members through 16 offices in West Michigan. Two more branches are under construction in the Grand Rapids and Kalamazoo areas.

What do you see the economy doing in 2016 and how is it affecting business?

I think we’re going to see a little more of the same — some slow and steady growth. It’s been a very positive year for the state of Michigan and the economy as a whole. From our industry’s perspective, that equates to people obviously out shopping for cars. The car loan volumes for the year are pretty significant and they’re projected to continue into next year. We’re doing a lot of car loans.

On the other side of it, the housing market has picked up. Maybe you have folks who are no longer upside down on their mortgage, and we’re seeing home equity (lending) pick up as people take care of some improvements that they had put on hold over the last five years. If they don’t want to improve their current situation, they’re deciding to put their house up for sale and move to a different location. We have a lot of first-time (buyers) purchase mortgages. That will continue slowly and steadily in 2016, for sure.

Will movement in interest rates by the Federal Reserve cut into lending growth?

This first increase is going to be them testing the waters and a pretty small increase, maybe 25 basis points would be my guess. I don’t think it’s going to affect long-term rates or even short-term rates by that much immediately. It’s going to be more of a gradual (increase).

With the economy where it’s at, if they take their time and are methodical in how they increase rates, I don’t think it’s going to impact the economy in a negative way. I think people will continue to make purchases for consumers-related goods — cars and houses. I don’t think an increase of 25 basis points or even a little more would slow that down.

What’s the business opportunity for you in 2016?

The challenge in our industry is centered around how people are banking. They are doing a lot more through digital channels — their mobile phones, their iPads and from the comfort of their home depositing a check versus coming into an office. Although not a surprise, it’s certainly a key focus for us in how we are going to transform our business.

We certainly don’t want to be the next Blockbuster, for example. How do we transform those offices and make them expert centers for complex transactions like mortgages and business banking, as the transactions that were there 20 years ago are declining? How do we reinvent ourselves and transform the offices to be able to handle those transactions in a different manner? Maybe two-way video with remote tellers and those types of things.

What do credit unions have to do in 2016 to maintain their growth and momentum?

For us, we will need to continue to acquire members at our offices, through the car dealers and online, with an emphasis on lending to maximize interest revenue. To retain our current members, we must provide them easy-to-use digital tools.

Between January and November, state regulators approved 13 mergers in Michigan, reducing the number of state-chartered credit unions from 175 to 162. Merger activity, especially involving small institutions becoming part of larger credit unions, has been elevated in recent years. Do you see that continuing in 2016?

The small ones, it’s so difficult for them to survive with the regulations and compliance and the burdens that they have. It’s really the same as the larger institutions. And the ability for small credit unions to even get volunteers to serve on their board of directors is such a challenge that I think you’re going to continue to see that (M&A).

Strategically, Consumers Credit Union has made the choice to grow primarily organically, and we’ve had one merger of a small rural credit union in Lawton in our 60-plus years in existence. We feel growing organically allows us to keep our employee culture in place and have employees who are engaged.

There are mergers happening around us. It’s just not something we actively pursue.

Interview conducted and condensed by Mark Sanchez.

Read 2042 times Last modified on Monday, 28 December 2015 10:31

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