This is the fourth article in our series, Money Matters.
A lot of people look to their financial institutions for guidance on investments and help with managing their finances. But are those services available from a credit union? And isn’t it tricky given that you have to be a member?
Yes, credit unions offer those services. And yes, you do need to become a member. But it’s far easier now to join a credit union, said Jeff Bentley, president and CEO of Northwest Federal Credit Union.
A bit of history can help explain the evolution of credit unions and how membership has changed over the years, Bentley said.
Credit unions were founded in the early 1900s when small groups of businesses — for instance, small manufacturing shops, he offered — couldn’t get resources, lending or deposit services from their local banks. “So, they decided to create a cooperative and do it themselves,” Bentley said. “And it was from those small grassroot beginnings that credit unions were formed.”
But membership rules have changed and often no longer do credit unions only have select members from a single business group or occupation. Today, credit unions are able to welcome a wider circle of members, and there are now many ways to join Northwest Federal, Bentley said.
Not-for-profit approach: a credit union hallmark
Because of their origins as cooperatives, credit unions to this day run as not-for-profit financial institutions. And Bentley said it affects the way they work with their customers and businesses.
He pointed to the first months following the creation of the Paycheck Protection Program by the federal government primarily to help small businesses during the COVID-19 pandemic. It’s an example of how Northwest Federal helped people in ways more traditional banking institutions initially did not, Bentley said.
“At the time, the Small Business Administration, who was managing the program, really didn’t even have the rules figured out yet,” he said.
Because of that, a lot of big banks did not participate at first because they didn’t know how they were going to get paid, Bentley said.
Because Northwest Federal is focused on helping people and not on profits, it was an early offeror of the PPP loans. Eventually, most big banks jumped in too, but a lot of their small business clients couldn’t get them on the phone because those bigger banks focused on the larger businesses where they could make a lot more money, Bentley said.
Initially, many of the small businesses seeking the PPP loans from Northwest Federal were not members. “They came to us because they were in our geographic area and said, ‘Can you help us?’ Our answer was, ‘Absolutely!’ And with no strings attached,” he said. “We had to open an account because that’s the way we would fund the loan, but there wasn’t any contingency that they had to do business here and move accounts and all that kind of nonsense. We just helped people.”
Problem-solving drives credit union financial advice
When somebody comes to Northwest Federal looking for financial or investment advice, Bentley said he views it as an opportunity to help address a challenge or problem. It’s why the credit union invests in training its employees not only about Northwest Federal financial products and services but also about trends in the current financial environment, he said.
“We welcome the opportunity for you to come in and just talk to us — see if we can find the solution that will solve your challenge.”
To read more articles and listen to the full discussions in the WTOP Money Matters series, click here.
