Insight From the Field | How New York University FCU Is Using Partnerships and Products to Scale Its Growth
By Matthew Stratford, CNote
March 29, 2024
Growth is hard to come by.
The NCUA’s Q4 2023 Quarterly Credit Union Data Summary revealed that credit unions of nearly every size were struggling with membership (except those with assets above $1B). For example, federally insured credit unions with assets of at least $500M but less than $1B in assets saw a $3.8% decline in membership. Credit unions with at least $50M but less than $100M in assets saw a 3.5% decline in membership.
This decline has also had an impact on deposits. According to a report from TruStage, in March of 2023, the average member had $13,818 in total savings deposits, a $286 year-over-year drop, and the largest in credit union history.
While there is no silver-bullet solution, New York University (NYU) Federal Credit Union offers a prescient view and compelling blueprint for how to position your credit union to grow amid financial challenges.
When Mira Ness, CEO of NYU FCU, joined the credit union in 2006, it had approximately 2,000 members and roughly $7M in assets. Today, NYU FCU has about 10,000 members and more than $70M in assets. How are they doing it?
Invest in Products and Services That Address Your Members Challenges
Over the years, NYU Federal Credit Union has expanded what it’s able to offer its members. That includes online banking, Zelle, and Apple Pay, as well as student loan consolidation, quick cash loans, and credit-builder loans. “We are able to provide the loans that our members need,” Mira said. “We’re constantly trying to listen to our members about what they want.”
For example, one of the first additions that Mira made at NYU Federal Credit Union when she joined 17 years ago was a mortgage program. Within six months of joining, she added five mortgage loans to the credit union’s portfolio, which allowed the credit union to begin making money on interest “right away.” Since then, NYU Federal Credit Union has continued to expand its mortgage program to include mortgage preparedness loans, first-time homebuyers’ loans, and down-payment assistance loans, which has become the credit union’s most popular offering.
Invest in Partnerships
When Mira took up her position, she began investing in partnerships. NYU Federal Credit Union partners with Citibank to give its members access to the bank’s sprawling network of ATMs. They also partner with Neighborhood Housing Services of NYC to host financial education seminars about available housing grants for low-income members. The credit union even partners with Citi Bike NYC to provide its members with a considerable discount to access thousands of bikes across New York City, Jersey City, and Hoboken. However, one of NYU Federal Credit Union’s most innovative partner relationships is with United Nations Federal Credit Union, a large, international credit union that has a presence in New York City.
Although NYU Federal Credit Union’s assets have grown considerably since Mira joined in 2006, the credit union is still too small to carry a high number of mortgages on its balance sheet, despite the demand from its membership. Therefore, to meet its members’ needs, the credit union forged a partnership with the United Nations Federal Credit Union. NYU Federal Credit Union sells its mortgages to United Nations Federal Credit Union but holds onto 10% of each loan. In return, United Nations Federal Credit Union gets to improve its balance sheet, while NYU Federal Credit Union gets to serve more members. Last year, the arrangement resulted in NYU Federal Credit Union earning approximately $400,000 in fees, which Mira says was a “huge boost” to the credit union’s bottom line.
Another partnership that’s proving to be beneficial for NYU Federal Credit Union is with CNote. In 2023, NYU Federal Credit Union became a CNote Impact Cash® Partner. CNote invests Impact Cash dollars in mission-driven NCUA-insured partners like NYU Federal Credit Union, generating returns on institutional investors’ cash allocations while supporting financially underserved communities across the country. “Because we need cash flow, and we have to have liquidity for our transactional mortgages,” Mira said, “CNote has been very helpful for us.”
Invest in Financial Education
Given the popularity of its mortgage programs, NYU Federal Credit Union offers numerous financial education and information seminars. Although much of the credit union’s business flows out of these seminars, Mira says that that’s not her and her team’s goal. “Our goal is education and to help people,” she said. “We want people to get the best possible deal, and if someone else is going to be able to give it to them, we tell them to go for it. Educating people and gaining trust is the most important thing.”
Connect with CNote to learn more.
About CNote
CNote is a technology platform that provides a sustainable flow of non-member deposits that are low-cost and deliver consistent value. This service is available at no cost to CUNA member credit unions as arranged by CUNA Strategic Services.