Crystal Long started working for GECU as a file clerk, and now she’s running the place.
In the 32 years since, GECU – formerly known as Government Employees Credit Union and often referred to as Greater El Paso Credit Union – has come a long way, too.
Now president and CEO of El Paso’s largest locally owned financial institution, Long succeeded Harriet May, who led the credit union for 15 years. May is credited with its growth and with maintaining a culture at GECU that customers obviously like.
May stepped down as president and CEO in December. She’ll officially retire at the end of this month, after 38 years with the credit union, and with the title of president emerita.
“We’ve been in business since 1932, and she made a tremendous contribution to the El Paso community and to the business community as well,” Long said.
GECU’s 303,000 members comprise nearly 40 percent of El Paso County’s population. And its local deposits beat out Wells Fargo or Chase Bank.
Long, whom May mentored along the way, steps into big shoes with enough years of experience at GECU to retire. She holds a master’s of business administration from the University of Texas at El Paso, and is now working on a second one tailored for executives.
Long attributes GECU’s success to its abiding “people helping people” philosophy, which leads the institution to offer small personal loans as well as credit counseling classes and individual help sessions, for members and nonmembers alike.
Long, 51, talked with El Paso Inc. about the perils of payday lenders, the differences between banks and credit unions, and what the striking design of GECU’s headquarters calls to mind.
Q: How did you get started here?
I started working here when I was 19 as a file clerk, an entry-level position. I worked in different positions throughout the credit union till I was finally blessed enough to be made a part of the management team.
Harriet allowed me to move from position to position, so I had a broader picture of what GECU was all about, and that helped prepare me for this eventual goal of the president and CEO.
Q: Some years ago, you had to be a government employee or a teacher to join a particular credit union. What does it take now to join GECU?
Now, it’s where you live, work and worship. So if you live, work or worship in El Paso, you are eligible for membership. We use the tagline Greater El Paso Credit Union.
Q: How many branches?
Q: How did GECU get so big?
I like to think it was our people helping people philosophy. People would tell their friends and family about the credit union and how they’ve been helped by the credit union and through marketing.
But we feel it’s been the service delivery and the philosophy that has really sustained us and made us grow.
Q: Have you expanded beyond El Paso County?
We do have expansion into Hudspeth County, as well as Otero County, N.M.
Q: Not Las Cruces? What’s the rule on expansion?
The commissioners of credit unions in various states have a say in that. So if we wanted to and were serious about it, we could write to the commissioner and say we’d like to be a part of the Las Cruces and the New Mexico area. That’s how the process works. We’d have to ask permission.
Q: So you have done that in Otero County to set up in Alamogordo?
Q: This is an elementary question, but there are banks and there are credit unions. What’s the difference?
In a credit union, you are a part owner of the credit union when you open your $20-share account. The other difference is we are committed to financial education. So what you’ll find is this credit union and others are really great about committing resources toward financial education.
Q: Credit unions are non-profits?
They are not-for-profit. We need earnings because we have to reinvest in the business and to expand and offer services.
Q When you say non-profit and not-for-profit, is there a difference?
Yes, because a non-profit doesn’t have to have ongoing income. We do, because as we grow, we continually reinvest and have earnings to put together other branches and things that will serve the members.
Q: So corporately a credit union is a 501(c)3 or (c)4?
It’s a 501(c)4.
Q: From a consumer’s point of view, what differentiates a credit union from a bank?
Again, it’s the philosophy, people helping people. It’s also the fact that GECU will lend you money to have a vision prescription made. We will also lend you money for a very small amount.
The other financial institutions are very hard pressed to do that because it’s not profitable for them. But to us, it’s about building relationships, so that’s something that we will do.
Q: How small a loan could I get?
How little do you want? Twenty-five bucks? Fifty bucks?
Q: Let’s say I have a $50 medical prescription to fill, and I don’t have the money. You’ll lend me that?
Not a problem. You could come in and we’d lend it to you. We’ll make small loans where others just say their minimum is $1,500 or $5,000 at a banking institution.
Q: What kind of interest would you charge?
It depends on your credit score. Your credit score determines the rate. The higher the score, the lower the rate.
Q: Let’s say I have a good score.
Probably our lowest rate would be about 10.9 percent.
Q: It sounds like a payday loan.
Without the high, high interest rate.
Q: How are you different from a finance company. To whom do they cater?
I think they cater to people who have challenged credit and those that probably can’t get a traditional loan from a credit union or a bank.
Q What interest rate might a payday lender charge for a small loan?
It could be 100 percent. It could be beyond that.
Q: That’s legal in Texas?
That is legal. But with the federal Consumer Finance Protection Bureau coming in, one of their first targets to look at is payday lenders.
Q: What about the Texas anti-usury law?
Actually, the usury law is still there, and 18 percent is as high as they can go. But it doesn’t apply to the payday lender. That’s the difference.
Q: Have you had customers who used to borrow from payday lenders and were surprised they could get the same loan from you without the awful interest rate?
We have countless stories of people we have helped who were in a cycle of payday loans. We’ve been able to get them out of that, so we’re real proud of that.
Q: If I want to open up a regular household account, where should I go, bank or credit union?
GECU, because our philosophy is all about you. It’s all about the relationship and what we can do for you. We offer financial education. We offer financial counseling. We have financial counselors in-house who will work with you.
If you just want to put together a budget and certainly if you get into financial difficulty, we have people who do nothing but talk to people about that.
Q: So if I’m looking for personal services, I should consider a credit union, but if I am looking for other services, I would go to a bank? What services would those be?
They do commercial lending very well.
Q: In October, there was uproar when the Bank of America announced it would start charging fees to customers using debit cards. There was a campaign to get people to quit the Bank of America and other banks planning to impose new fees. They ended up reversing their decision, but there was still a big “quit” day.
Right. Nov. 5.
Q: Did you pick up any accounts?
We did, not a lot, but some. Nationwide, credit unions picked up about 6 million accounts. Not a bad number. We saw barely a ripple here.
Q: Is there a difference in how you handle debit cards, transactions and fees, and how major banks do?
I would say it’s very much the same, and the processors we use are the same ones the bankers use. So the process is pretty much the same.
Q: When it comes to credit and debt, most Americans have too much of both. What is the situation in El Paso?
People here, very much like in other parts of the nation, are carrying too much signature debt. It’s not collateralized. But I do think we’re in a really good place here in El Paso because we haven’t suffered some of the market conditions others have on things like their home.
So when they come to consolidate and borrow against their home, the market prices are looking pretty good, compared to the way they looked in California or Las Vegas. I also think consumers have backed away a little from signature borrowing and are trying to save a little bit.
Q: Is there a problem with people’s understanding of credit in El Paso, their credit literacy, when it comes to using credit wisely? A student passing up a low-interest student loan and paying with a credit card, things like that.
Absolutely. That’s why we have financial counselors in place. And we do well over 100 financial counseling sessions with members throughout the city during the course of a year – everything from how to budget, to trust accounts, how to buy a home for the first time, almost any financial topic you can think of, we’re out there doing the education.
Q: Are there particular situations in El Paso that someone with more education about credit would tend to avoid?
What’s problematic in El Paso are the payday lenders and the check cashing houses. Those are problematic.
I think the other slippery slope that lots of our people in the community go down is credit card borrowing. That’s something that we counsel with members about, to be careful about how encumbered they become with credit cards.
Q: Why do people here tend to get into financial problems?
I think the thing we see the most when people get in financial difficulty is they have gone through a life event. Maybe they’re going through a divorce or there’s been a death in the family. It’s usually a life event that thrusts them into difficulty.
Q: Are your counseling services only for members?
If you come and want financial counseling services from us, we will give them to you. We will encourage you at the same time to open an account and continue the relationship, but we will work with you if you don’t. We offer personal assistance as well as counseling in a classroom-type environment.
Q: What kinds of loans does GECU specialize in?
We’re known as a car lender. Our auto portfolio is the largest we have, at well over $500 million. We’ve got credit cards; we have a variety of miscellaneous loans. We do a lot of mortgage loans here, and we do some commercial lending.
Q: What is your volume of mortgages?
On the books, we probably have 7,000 to 8,000 mortgages today. That’s a rough estimate because we sell a lot of loans on the secondary market. We sell to Fannie Mae. We keep about $250 million on the books in mortgage loans. But most of our new production, we sell.
Q: Why do you do that?
In today’s low-interest environment, financial institutions prefer to sell at least a part of their portfolio on the secondary market to mitigate interest-rate risk.
As rates rise, we don’t want to be underwater. It’s better to sell low-interest rate loans because when we do that, we can use the money we get back and reinvest it in things that yield a higher-interest rate. We can reuse the money.
Q: Are your customers OK with that?
Oh, yeah, because we still service the loans.
Q: How many mortgage loans did you close in 2011?
We closed 1,373 for over $108 million, including first purchase, refinance, home equity loans. The rates right now are wonderful and people are trying to take advantage of that.
Q: Is that a good number for you?
It’s a very good number.
Q: Is there a credit union in town with more?
Not a credit union. There are other lenders that probably have more. We’re making some really good strides in the area of mortgages right now. But again, we’re thought of as an auto lender first and secondarily a mortgage lender.
Q: What kind of commercial lending do you do?
We cater more to small business, and we are primarily looking for loans that are secured by collateral, such as real estate. We felt that as a credit union serving the community, we needed to reach out to businesses as well. Smaller business loans are what we’re really good at.
Q: When you say smaller, what range are you talking about?
I would say probably $2.5 million, down to $500,000 or even lower. We do commercial loans of $50,000 and even less.
Q: How much do you have in commercial loans?
Q: How many loans does that represent?
Three hundred fifty four.
Q: Tell us about this building. What is it supposed to look like? Some say it looks like …
I already know what you’re going to say.
Q: Does it have to do with IBM?
(Laughs) Yeah. A punch card, a prison or Noah’s ark. You either love it or you hate it. There’s really no in-the-middle. We put this building up in 2008 because we were landlocked at our branches, and we had administrative offices in the branches. This gave us opportunity to consolidate and gain some efficiency.
Q: Who was the architect?
Perspectiva’s Eugenio Mesta. It was by his leadership that we came up with the design for this building.
Q: Is it supposed to represent something?
A diamond in the desert. That was what we wanted to portray to the El Paso community.
E-mail El Paso Inc. reporter David Crowder at firstname.lastname@example.org or call (915) 534-4422, ext. 122 and (915) 630-6622.