Letter to Our Members
To: Our Members August 30, 2019
From: The Volunteer Board Members and the Management of Vocality Community Credit Union
Several of you have reached out to us about the recent changes. We agree with your comments about our local economy and the struggles our area is experiencing. These economic factors are a part of our decision to increase the service area of the credit union. Our apologies for the length of the response letter, as each of the points seemed important to share and we believe the following information will help you to better understand how governance and business decisions are made at your credit union and credit unions in general. We definitely could have done a much better job in timing and processing of our initial communication to share the changes with you! Thank you for the opportunity to share further information with you here.
Why does the credit union want / need to expand its service area?
As we all face this severe local down turn, the credit union is here and wants to help. Expanding services in a broader environment helps spread the risk and spreads the cost of providing products and services across the whole membership, which in turn provides additional lending and service opportunities which will help us continue to be here for you for the long term. The credit union has to keep providing loans and services to stay viable.
We’ve all been dealing with repercussions of recession and a low interest environment for more than 10 years now. And as our local economy has now been substantially hit by recent changes in the law, many of our community members are struggling, and our general community area is seeing an outflow of population and a reduction in cashflow and sustained levels of income. Since so many of our local friends and neighbors are members of the credit union, this can and has affected the credit union’s ability to collect on debt (increased delinquency and potential foreclosures) or for members to qualify for new loans, and to limit the number of people eligible for the credit union overall, if we only provide services to those “close in” to our office.
How does the credit union make money and where does it go?
Most of the income for credit unions comes from loan interest, and in smaller part by investment interest earned and fees/charges. We do not sell stocks to gain additional income or capital as the banks do. If we can’t maintain/increase lending, the largest part of the income stream for the credit union dries up. Expanding to provide services to others in our connected corner of Northern California opens the credit union’s ability to continue to provide products and services to the whole membership into the future.
The credit union’s income is used to pay for business operations, salaries and benefits for the staff, contracts for products and services, the purchase and maintenance of fixed assets and equipment, and new technology services and security processes needed to run the organization in compliance with safety and soundness requirements. Our income is also used to provide sponsorships andcontributions to charitable organizations and service organizations in support of our communities. Residual earned income is held to fulfill our capital or net worth ratio above the level required by the NCUA; and provides a reserve to support our services as new products and offerings are needed to fulfill ongoing member needs.
Several members have commented on the need and their expectation of the credit union’s hand in socially responsible assistance with our local service organizations. We agree and regularly and directly contribute to our local organizations, with just under $100,000 to our local community charitable and service organizations and our local schools in the last three years. We have remaining commitments for the latter part of 2019 for projects and sponsorships that will take us well beyond that number. These numbers are shared during our annual meeting each year. We have increased our community outreach substantially in recent years and we have no plans to stop providing those important local community contributions as part of our ingrained and growing community outreach programs. It’s obvious from comments received, that we haven’t done a good enough job in sharing information with the community about our standard of commitment for financial and volunteer support for our local organizations…. we just do it because it’s the right thing to do.
Providing financial education through face to face meetings with our financial counselor(s) at the office, providing multiple free business success training sessions over the last two years, as well as providing financial education classes to Southfork H.S. and other youth groups in our area are some of the other ways we support the economic development of our communities today. The more people we can touch, the greater the opportunity for the area we serve to be lifted. Many people may not realize that the credit union is also one of the largest employers in the area and provides substantial economic support for our communities through our engagement in local commerce and the reach of our pay roll dollars.
Why did the name need to change?
Changing the name of the credit union was a business decision made to help the credit union be easily recognized in the new markets - while it was decided that the name would officially change, it was anticipated that the existing membership would probably continue to identify us with the “historical name”, or simply by our initials, much like folks still call the grocery store “Murrish’s” or the building housing the administrative offices of the credit union “the House of B”. The rebranding exercise involved the current volunteers (members of the Board and Supervisory Committee members), the staff, and a focus group of members that represented our ‘consumer’ members and our small business members, as well as those from varying age groups from the membership.
Our existing DBA “Community Credit Union” which was shortened many years ago from our legal name of “The Community Credit Union of Southern Humboldt” for use in Humboldt County only; is not unique and does not provide us any protection or differentiation from others. There are many, many other organizations in California and across the country with the words “community credit union” in them, along with some other identifying “name word”. Vocality is our identifying word now, along with our “Community Credit Union” designation.
Why is the credit union expanding now – has it happened before?
This expansion of our service area (completed January 10, 2019) is just the most recent in the long history of the credit union. The service area and the number of people eligible to receive our services has been increased several times since the credit union began in 1979. Previous expansions did not require and did not seek member approval for their completion. The necessary plans and completed paper work were filed, and approval was received by the appropriate regulatory agency at the time of each expansion request, including this one. The most recent large expansion prior to this one was in 1998 when we began to serve the large area from Ferndale over to areas of Trinity County and from the Pacific down and over to areas in northern Mendocino County.
We are pleased to report that the credit union is financially strong and viable today – and was approved for the expansion by regulators who scrutinized our management expertise, our financial stability and our capacity to reach out and maintain our level of financial stability while doing so. Our local members currently have direct access to our lobby, our night drop and our ATM for various services, as well as access to our phone team, online and mobile banking solutions. Members who live further away continue to ask for more ways to access their accounts. As an example, our member service center currently fields 1800-2000 calls per month and over 4000 of our members are signed up for our online banking services; and another several hundred are waiting impatiently for us to add remote deposit capture (take a picture of your check to have it deposited) to our mobile banking services to improve their access. We anticipate this service to gain members as soon as that enhancement is completed.
Who is eligible to join the CU now?
Some may have concerns about the credit union providing services to people well outside our corner of the Northern California region or across the state. That is not the case - our expanded service area now includes only those who live or work in Humboldt, Trinity, Mendocino, Lake and Sonoma Counties, and family members of those meeting the above criteria; and businesses in our field of membership. People outside our area can only join if they are a family member of an existing member, just as we’ve always allowed over the years. Other credit unions are also eligible, to allow us to assist with investments with them, or their investments with us to promote the credit union cooperative financial process and assist us and them with liquidity and asset management needs. This is a very common thing that credit unions do for one another.
What is the governance and chartered structure of the credit union?
The credit union is not a nonprofit charitable organization nor a nonprofit community service organization. We were originally and remain chartered as a 501(c) 14, Mutual Benefit Corporation (a licensed business) and the credit union is identified and held to compliance standards as a federally insured and state chartered financial institution; responsible for following all federal and state laws, rules and regulations for that business type. Member accounts are federally insured to the maximum limit approved by the National Credit Union Administration (NCUA).
The roles of the Board, the management and the membership of the credit union:
Per our by-laws, the Board’s role is to manage the funds, business and affairs of the organization on behalf of the members. The membership does not vote on business decisions.
The Board delegates the general operations of the organization to the President/CEO who reports to the Board on the financial status and other points of record of the organization monthly.
The credit union reports financial information to the federal agency for credit union share insurance (the NCUA); and our state regulator (the Department of Business Oversight – Credit Union Division). There is a standardized exam process that reflects each organization’s strengths in Capital position, Asset quality, Management of the organization, Equity position, Liability management and Security standards. This is referred to as the CAMELS rating. The credit union has passed its last several exams for these compliance and safety and soundness standards with flying colors. We are audited annually by a CPA firm and produce an annual report of our financial status which is made available to members each February at the annual meeting and on request.
The Board represents the membership in all business affairs and decisions except the following areas where member votes are required:
Per our by-laws and articles of incorporation, the membership has the opportunity to vote each February at the annual meeting, for a 7-person volunteer Board and a 3-person volunteer Supervisory Committee. The volunteers serve rotating 3-year terms and a portion of each group is up for re-election each year. If an individual member wishes to be considered for the Board or Supervisory Committee, they may complete an application to seek nomination by the nominating committee and be placed on the ballot, subject to passing requirements for bondability and other criteria; and be presented for a vote of the membership. Approval by vote is required for those individuals to join those governance groups as positions become available each year unless there is only one person running for the open position(s).
Any change in the by-laws that affect the number of Board members, or Supervisory committee members, or a submitted change to memberships’ right for votes as noted above.
The membership would be asked to vote to consider a merger with another entity if our credit union is to be the acquired organization. This requires a membership vote and the determination is made by the majority of the votes received. If a merger is considered by the Board, and we are the acquiring (surviving) organization, a vote of the membership is not required. (Mergers are also subject to approval by regulatory agencies, whether we are acquired, or the acquiring organization; and the regulators may deny a merger, even if the membership approves it)
How do we know the credit union is doing fine?
The annual meeting is held every February and the membership is notified of the location, date and time and is invited to attend.
The quarterly financial reports of the credit union are available to the public at www.NCUA.gov
The monthly financial statements of the credit union (Approved by the Board) and annual (audited) are available upon request.
The minutes of the previous year’s annual meeting are made available to members at each annual meeting for approval as submitted or with corrections.
We hope that by sharing this information with you, we’ve explained the business reasons behind the decisions we’ve made, how your credit union functions, and how it and our staff works hard and well for your benefit as a member, the membership overall, and for the benefit of our communities. We look forward to continuing our efforts to help your financial well-being and that of our whole community, for decades to come.
The Volunteer Board Members and the Management Team
Dear CCUSH Member,
Effective August 1, 2019 we are changing our legal name to Vocality Community Credit Union, the same people, and the same love you’ve come to expect at The Community Credit Union of Southern Humboldt - just with a new name! Most importantly, this change will not affect your account number and information. We are changing in name only. We will continue to offer you the same level of service you have come to expect. If you use our electronic services, you will see an updated look, but your login information will remain the same. An update to the mobile app will be coming soon and you will have to redownload the app. Your debit and credit cards will continue to work and will be changed to reflect the updated name when they are reissued. Your current checks will continue to work, there is no need to update them. If you’d like to update your checks to reflect our new name and logo, we will provide you a replacement box of checks at no charge!
Why change? 40 years ago we started out as the MATEEL credit union and several years later we changed our name to what we know today. Now we’ve chosen to change our name to reflect how we feel in our hearts and our heads. We have raised voices and helped lift communities around us for years!
In a time that so much in our region is uncertain, we are stronger than ever, unwaveringly committed to our members that made us who we are and ready to help more of our local communities. That visionary spirit of our out-side-the-box founding members remains and has helped make us into the strong entity we are today.
Being so deeply embedded in the community, keeping our members’ money working on everyone’s behalf, we understand the unique needs of people in this part of Northern California. Many of our community friends and neighbors may not realize we have been serving folks from Ferndale to Laytonville, to Whale Gulch; from the Pacific Ocean to areas in southern Trinity County for more than 20 years now, but our name hasn’t changed as we’ve spread our wings. We can now serve more of our neighbors; likeminded and like-hearted individuals and small businesses in Humboldt, Mendocino, Lake, Trinity, and Sonoma counties. We are excited for the opportunity to continue our legacy of helping communities grow one voice at a time and in harmony with our friends and neighbors.
Our mobile “Nomad” branch is in construction and coming this fall. It will help us reach out, gaining voices and sharing our cooperative message, while keeping our roots firmly planted in our Southern Humboldt home.
We are so excited to share this gift with you, our members and cannot wait to see what adventures the next 40 years will bring! At Vocality Community Credit Union we are stepping up for our members, and speaking up for our communities!
Thank you for your Support,