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Change afoot in credit union leadership

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Last month the YS Federal Credit Union saw two sudden personnel changes. On July 26, Chief Executive Officer Karen Wolf resigned from a position she had held for 12 years. That same day, Sandy Hollenberg, then chief operating officer, became the interim CEO of the credit union.

According to credit union board chairman Steve Payne this week, Wolf resigned for reasons that are not public. Board member Chris Zurbuchen declined to comment on the issue.

Payne views Hollenberg’s appointment as a positive change and one that will allow the bank to emphasize its local, community focus, he said last week. The board is considering Hollenberg for the position of permanent CEO.
Wolf, whose official name is Karen Zunk, was named CEO in 2000 at a time when the credit union, then called the Yellow Springs Community Credit Union, was going through a period of change. Since its founding in 1948, the lender had functioned as a cooperative source of small, short-term loans. The atmosphere of the nonprofit credit union was casual and friendly, and business was open especially to the needs of Antioch College students, according to former board member Connie Pelekoudas last week.

“The credit union was a place where friends and neighbors could lend and borrow money from each other,” he said. “It was a community relying on itself collectively which formalized into a legal entity.”

But as an informal lender, the credit union had limited itself to mostly small personal loans and savings accounts, and did not finance many mortgages or business loans, Pelekoudas said. Mortgages are long-term loans, which means more risk for the lender, he said. Small loans are less risky, and they involve less paperwork, which in turn allowed the small number of credit union employees to be more personal and take time with the customers.

“It was casual and there was a lot of friendly exchange,” Pelekoudas said. “Others would say it was inefficient.”
Businesses have a natural tendency to grow in order to stay healthy, Payne said this week. And by growing its capital, the credit union aimed to be able to offer a wider range of services to the community. They increased the real estate and line of credit loans, as well as the signature loans that could be completed in a matter of minutes with just the borrower’s signature, Payne said. The credit union also began shared branching to allow customers to access their accounts from any credit union in the country. And the business grew.

According to credit union balance sheets held by the National Credit Union Administration, at the time that Wolf took over the business, the YS credit union’s total assets were at a steady $8 million, and it recorded 35 real estate loans totalling about $406,000. Last year the credit union’s assets were up to $15 million, and it had 108 real estate loans on the books equalling $4.6 million. The lender also increased its unsecured credit card business from about $250,000 a year to about $750,000 a year. And as it always has done, the credit union still facilitates a substantial number of new and used car loans, including about 200 on the books last year and almost 350 in 2000.

The credit union managed the increased services, which required more paperwork and reporting, with the same number of employees, about five to eight full-time workers. That meant the operation needed to be streamlined for greater efficiency. And the increased capital and need for more cash on hand translated into the need for greater security, Payne said, hence several remodelings of the business front on Xenia Avenue over the past decade.

All of that has translated into a loss of the “mom and pop” feeling the credit union had prided itself on, Payne said, acknowledging the change this week.

“We’ve lost that sense of comeraderie — it was kinda fun to sit and chat at the bank,” he said. “But in terms of security, it’s a bit of a risk.”

While the credit union was growing its capital, other change was also taking place. When Wolf arrived in 2000, the credit union claimed 3,500 members, but the operation has since dropped back to 2,800 members. And while dividends to the members, who collectively own the business and vote for the board members, were at $154,000 in 2000, the dividends in 2011 were down to $17,628.

Dividends, or profits that get distributed back to the credit union members, are decided by the board, Payne said. But according to former board member Patti Purdin, who served the credit union from 2003 to 2010, Wolf had strong influence over the board. And the trend during Purdin’s tenure had been decreased dividends for members and increased fees for services.

From Payne’s perspective, some of the decrease in membership can be attributed to closed inactive accounts, some held by college students or local industry employees who had moved away. And the credit union had tried to grow its membership over the past decade by opening its charter beyond Yellow Springs and Miami Township to all of Greene County, as reflected by its name change to YS Federal Credit Union. But the recession greatly slowed membership growth, he said. And the cap on interest rates industry-wide reduced profits for banks and lenders across the country, resulting in reduced dividends for credit union members, Payne said.

Though Hollenberg said last week that she was not prepared to comment on the credit union’s history, she said she is excited about her new position and hopes to use her tenure to shape a credit union with a more local focus. She hopes to expand member services and create “second chance” programs to allow a wider range of people to qualify for loans, checking accounts and credit and debit cards, she said.

“My vision is to be much more about the community and to offer products and services to meet the unique needs of this community,” Hollenberg said. “Even though we’re a small credit union, my plan is to make sure these things are addressed in a different way than we’ve done in the past.”

Payne echoed the sentiment that the credit union does hope to get more involved in the local community.
“We always had a local emphasis, but Sandy really wants to reintegrate herself with the community — she wants to be a real live participant,” he said. “Before we were focused on being a strong credit union, and now we want to take that part of our mission and go forward into the community.”

The credit union’s current board of trustees includes Payne, Zurbuchen, Bill Simpson, Suzette Castonguay, Deb Carlson, Richard Rutan, Deb Caraway, Emily Miklasevich and James Miklasevich.


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