Bethpage Federal Credit Union: Community Effort

Financial

Written by Meghan Flynn

Thursday, 01 May 2008

Bethpage Federal Credit Union: Community Effort - American Executive - RedCoat Publishing

Through an unconventional and ambitious method, this community credit union has taken over the Long Island marketplace.

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Back in 2000, Bethpage Federal Credit Union was doing well. Its annual growth hovered around 6%, and it served 11 of the 15 major employers on Long Island, NY. But back then, small banks were merging with national ones left and right. Kirk Kordeleski, president and CEO, needed a plan to keep Bethpage a community focused, sustainable credit union.

Kirk Kordeleski, President and CEO

He and his team set the ambitious goal to double in size every five years and make Bethpage a fixture of its community. At the same time, they knew that simply getting bigger in size was not going to help Bethpage compete with the giant national banks that dominate the New York City marketplace.

“We knew we wouldn’t be able to compete by being like them,” Kordeleski said. “So we created a plan that was based on providing great rates, great service, and filling the void all that consolidation had left: the community banking space.”

Since then, Bethpage has tripled its branch system, extended its services to include all those offered by larger banks, and increased its assets from $950 million to more than $3 billion. All the while, Bethpage remained a credit union devoted to providing its membership with the lowest rates and best service available.

Giving back
Bethpage did not achieve this growth through the traditional banking method of raising capital. To increase its income, it needed more members. The best way to do that, Kordeleski and his team decided, was to focus on increasing Bethpage’s brand awareness. Increasing the credit union’s involvement in community service and local charities helped do that, simultaneously fulfilling Bethpage’s mission to fill the community-banking void and help the people in its community.

What started out as donations to charitable organizations and helping local chambers of commerce evolved into involvement and sponsorship of major events, such as the Memorial Day Jones Beach Air Show and a Not-For-Profit Fly-In to Washington, DC.

“We lucked into the air show in 2003 when its bank sponsor backed out at the last minute, and the New York State Parks needed someone to pay for the performers,” said Kordeleski. “The planes are such a big part of our heritage, and the day was so patriotic after 9/11, it was perfect for us to put our name on it. We are so proud to continue to sponsor the show, which has grown to attract 400,000 people.”

The Washington, DC fly-in was developed last autumn when Bethpage helped pay for 15 local nonprofit leaders to fly to the capitol and meet with Congressman Steve Israel of the Appropriations Committee to learn how to ask for money and coordinate their efforts in the capitol.

Kordeleski explained that Bethpage has as much in common with nonprofit organizations as it does with banks. “We talk about and deliver on the issues that are important to our community like any of the nonprofits, and, on top of that, we provide banking services. Going down to DC allowed us all to learn about each other,” he said.

Although it’s impossible to see a direct correlation between all these efforts and increased membership or income, Bethpage has seen a huge increase in brand awareness—a jump from the 40th percentile to the 70th in the past eight years or so.

Room to grow
Getting this far, however, has come with its share of sacrifices. The decision Kordeleski and his team made back in 2000 to grow quickly was a dramatic shift in the way Bethpage had been operating for 58 years and required different decisionmaking processes and priorities.

“One of the biggest challenges we’ve faced during this period of growth was the fact that some people who had been with Bethpage for a long time, great people that I had worked with for years before becoming CEO, did not make the shift from the environment we had been in, where we were growing at 6% a year, to the environment we wanted to create, where we would grow 15% a year,” said Kordeleski.

The atmosphere at Bethpage had to change to bring about the changes that would carry it into the 21st century and beyond, so the management team and the board set about finding the right people to change the organization from the top down.

Making those personnel changes was absolutely critical to the success Bethpage has experienced, Kordeleski said. “An organization can only grow and change at the rate that its senior team can. We put a high priority on bringing smart people that shared our vision, and that got us where we are today.”

However, this is by no means the pinnacle of achievement for Bethpage, especially in the current economic atmosphere. People are moving away from the big banks that have taken a hit in the mortgage crises and toward smaller, community-focused banks and credit unions. Kordeleski is optimistic and said this year Bethpage may have the opportunity to grow 20%.

“We are the 23rd largest credit union in the country, but this is a $91 billion deposit market, of which we are just $3 billion. There is plenty of room for us to grow.”

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