Three credit unions offer an alternative banking experience to residents in Schuylkill County.
As the only financial institutions based solely in the county, the three credit unions are nonprofit organizations that, like banks, accept deposits, make loans and provide a wide array of other financial services, according to the National Credit Union Administration’s website www.mycreditunion.gov.
But as member-owned and cooperative institutions, credit unions are owned and controlled by those who use their services and the profits are returned to its members in the form of reduced fees, higher savings rates and lower loan rates. A volunteer board of directors is elected by members to manage a credit union.
According to NCUA’s credit union locator, there are three credit unions in Schuylkill County: Schuylkill Federal Credit Union, 101 E. Union St., Pottsville; CACL Federal Credit Union, 1800 W. Market St., Pottsville; and Hidden River Credit Union, which has two locations at 60 Westwood Road, Pottsville, and 705 W. Market St., Orwigsburg.
There are also credit unions in Hamburg, Lebanon and Hazleton.
Credit unions were formed under the Federal Credit Union Act by President Franklin Delano Roosevelt on June 26, 1934. The act authorized the formation of federally chartered credit unions in all states, helping to make more credit available, and promote the principle thrift through a national system of nonprofit, cooperative credit unions, according to the NCUA.
Many employers sponsor their own credit unions while most members’ families join. Many credit unions also serve anyone that lives, works, worships or attends school in a particular geographic area. Membership in a group, such as a place of worship, school, labor union or homeowners’ association may qualify someone to join.
CACL Federal Credit Union has 7,920 members. Chartered since 1953, the credit union started as a postal employee credit union, which is where its name comes from, Francesco Mercuri, chief operating officer, said Wednesday. CACL was named for the Carriers and Clerks that worked there.
“We hung onto it because the customers liked it and it was what it was known for,” Mercuri said.
Now, membership is open to anyone who lives, works, worships or attends school in Schuylkill County, he said. It is also open to businesses based in Schuylkill County or do business within the county.
“We like to differentiate ourselves from banks,” Mercuri said. “When you join a credit union, you become a member here. Everybody who joins gets one and only one vote.”
While banks answer to shareholders, credit unions answer to members.
“Our members can decide what we do,” Mercuri said. “At a credit union, we are not-for-profit and consider ourselves member-owned. We like to pride ourselves on having better member service, lower interest rates on loans and higher interest rates on deposit products.”
CACL is also the fastest growing credit union in the county.
Mercuri said the credit union’s assets, which are determined by deposits and investments, went from $65 million in 2014 to over $92 million this year.
Meanwhile, membership at the Schuylkill Federal Credit Union has been more exclusive, but that will be changing when it merges with Hidden River Credit Union in May.
“We are different than the other two credit unions,” Cindy Nettles, manager and CEO, said Wednesday. “We are SEG based, select employer group.”
That means in order to join the Schuylkill Federal Credit Union, a person’s employer must already be a member. Chartered in 1958, the credit union currently has roughly 2,500 members, Nettles said. The largest employer members are the county, city and Schuylkill Medical Centers.
“We are not-for-profit and the profit that we do make at the end of the year we try to give back to our members in cutting loan rates or increasing deposit rates,” Nettles said.
The Schuylkill Federal Credit Union will become a third location for Hidden River Credit Union in May. Chartered in 1953, Hidden River Credit Union has about 12,000 members, John Murga, CEO, said Thursday.
“I think it is going to expand services for both memberships,” Murga said.
Membership will still be open to anyone who lives, works, worships or attends school in Schuylkill County.
“Essentially, their members will become members of Hidden River Credit Union,” Murga said.
Murga explained the difference between credit unions and banks as how each is able to raise capital. While banks can go to capital markets, credit unions are not allowed to engage in various commercial ventures.
“Credit unions won’t do financing for a five-story office building downtown,” Murga said.
The other difference is organization. Like the other credit unions, Murga said each member has one vote and the board of directors are volunteers. As a nonprofit, fees are also only used to cover costs.
“It is certainly true that credit unions have better rates and are more competitive on the loan side and we serve our members. We treat them like owners,” Murga said.
Murga said people are getting tired of the changes with some of the larger banks.
“I think financial institutions are changing,” Murga said. “Banks certainly have their purposes, but I think credit unions are geared more towards the customer and go out of their way to serve their members.”