Serving Those Who Serve

CUs face many challenges as they serve members deployed around the world.

August 10, 2011
Serving Those Who Serve


  • Financial education to troops and their families is a core CU service.
  • Technology supports deployed or relocated servicemembers’ financial needs.
  • Board focus: Deployment can lead to loan delinquency. Strengthen loan policies and regulatory compliance with the Servicemembers Civil Relief Act.


The wars in Afghanistan and Iraq sometimes hit painfully close to home for military credit unions. Some employees of military credit unions have spouses currently serving in combat. “We’ve already had two of our employees’ husbands killed in Iraq,” says Craig Chamberlin, president/CEO of $678 million asset Marine Federal Credit Union, Camp Lejeune, N.C. “That’s tough duty, and it’s a time when you provide all the support you possibly can for the families.

“It’s important to recognize that these are America’s heroes,” Chamberlin continues. “Even if there wasn’t an armed conflict going on, they’re America’s heroes because of what they’re willing to do. We need to do everything we can to take care of them.”

While the loss of an employee’s spouse is rare, it underlines the stress and anxiety credit union employees and members live with constantly. Military credit unions do everything they can to alleviate a portion of that stress by financially preparing their members for deployment.

These credit unions remain fiercely committed to meeting the financial needs of their members and their families—whether the military makes up 5% or 95% of the credit union’s members. And more challenges lie ahead with the planned drawdown of more than 60,000 troops from Afghanistan by 2014.

That commitment is demonstrated daily by development and delivery of exceptional products and services, such as rewards savings programs, special low-cost loans, short-term financial assistance, financial education, and sponsorship of base activities and local base commands.

“Our main focus has always been supporting our troops and their families,” says Roland “Arty” Arteaga, president/CEO of the Defense Credit Union Council (DCUC), Washington, D.C., which serves about 235 credit unions with 14 million members. DCUC is a chartered member of the Department of Defense Financial Readiness Campaign. “In today’s environment, that means supporting a highly mobile and expeditionary force that deploys frequently to over 100 countries around the world,” he says.

Serving today’s military, according to Arteaga, requires:

  • Dealing with frequent deployments that can create major shifts in base population, prompting many military credit unions to diversify membership by adding nonmilitary select employee groups (SEGs) or acquiring community charters.
  • Supporting a transient population that moves from one duty station to the next on average every two to three years, taxing the financial stability of military families. 
  • Using technology, such as shared branching and online banking, to maintain contact with members and support their financial needs when they’re deployed overseas, relocating to new assignments, or departing active duty.
  • Adapting to Base Realignment and Closure (BRAC) legislation that has closed or realigned more than 450 bases since 1989, causing a reassessment of credit unions’ futures.
  • Providing financial education to help young military members live within their means and stretch their pay, including developing alternatives to payday lenders.

Next: Deployment Challenges

Deployment challenges

The challenges of dealing with deployment have changed dramatically since Operations Desert Shield and Desert Storm in the 1990s, says Chamberlin.

Then, troops went overseas and their families went back to their hometowns, leaving the credit union to scale back operations and cope with staff vacancies as employees who were military spouses departed. Today, families are more likely to stay in the Camp Lejeune area that Marine Federal serves.

“Since we went back into Iraq and now into Afghanistan, the troops and particularly the Marine spouses and their families have become accustomed to deployments,” Chamberlin says. “We have 24- and 25-year-old Marines and Navy Corpsmen serving with the Marines who have had two or three tours in Iraq and are now going into Afghanistan.” Most families stay in the Jacksonville and the Onslow County area, he adds, because “the best support they’re going to get will be here.”

Deployment sometimes leads to loan delinquency, although Chamberlin says strong lending policies and financial counseling helped restrain delinquencies to 0.78% as of May 2011. When members fall behind, Marine Federal provides loan modifications or offers a short-term payment hiatus while members sort out their personal lives. “Members appreciate that and will go the extra mile to try to pay their debts,” Chamberlin says. Marine Federal encourages savings by inviting members to join the Deployment Club, which offers 3% interest on deposits up to $25,000.

Educating members

Financial counseling has been removed from formal military training so troops can better focus and prepare for combat.

“The training tempo in the Marine Corps no longer allows time for financial education and won’t in the foreseeable future so long as deployments to Afghanistan and Iraq continue,” Chamberlin says. “The Marine Corps is focused on keeping these kids alive with proper weaponry and making sure they can take care of one another as opposed to making sure they can balance their checkbooks.”

To help fill the gap, Marine Federal participates in predeployment and postdeployment briefings and offers financial education classes. Chamberlin says the most effective financial counseling often occurs one-on-one, such as when a loan officer persuades a young Marine who wants to buy a new Mustang that purchasing a used vehicle is both a better deal and a better match for his salary and credit rating.

Technology plays a major role in retaining military members, whose paychecks arrive via direct deposit. Online banking, shared branching, and ATM networks keep members connected after they move to a new base or deploy overseas. Today, only 40% of members use brick-and-mortar branches, causing Marine Federal to close two branches in recent years.

Next: Reconnecting with the core

Reconnecting with the core

Credit unions that serve the military typically also include a variety of SEG groups. This strategy counters declining military populations in some locations. But that doesn’t mean these credit unions forget their military origins.

Less than 10% of members at $1.1 billion asset North Island Credit Union, San Diego, are currently linked to the Navy. Even so, North Island was a sponsor of the Centennial of Naval Aviation events, including issuing a “challenge coin” celebrating the 100th anniversary of Navy aviation on one side and the credit union’s 70th anniversary on the other.

President/CEO John Tippets says
North Island participates in events that matter to its military membership as a way to “reconnect with the core”—the credit union’s most loyal members.

Employees at Texas-based, $4.3 billion asset Randolph-Brooks Federal Credit Union (RBFCU), are involved in Operation Home Front, which provides emergency assistance to families of service members and wounded warriors.

About one-third of RBFCU’s members are directly tied to the military. RBFCU was among the handful of financial institutions in its region to create a plan to provisionally cover members’ usual direct deposits when the federal budget debate created the potential for a government shutdown. “While people were struggling with the rising costs of gas and food, we didn’t want concerns over whether they’d receive their next paycheck or be able
to provide for their families to weigh on their minds,” says Sonya McDonald, senior vice president of market development.

Next: Maintaining Relationships

Maintaining relationships

Military credit unions work hard to maintain close relationships with bases, where military personnel are typically reassigned every two to three years. At F. E. Warren Air Force Base, $387 million asset Warren Federal Credit Union, Cheyenne, Wyo., partners with the Airman & Family Readiness Center (A&FRC) to support events and link airmen to financial resources when needed.

Marketing Manager Michele Bolkovatz says about half of the credit union’s members are linked to the military, with a field of membership that includes the Air Force, Army National Guard, Air National Guard, and civilian employees.

Warren FCU, which operated for its first 50 years in the base’s former jail and still has an on-base branch, introduces its services to new military members on the base on Wednesday mornings with its “Right Start” financial education program. 

Active-duty military that need help with their finances can join the “Combat Debt” program that runs in conjunction with Military Saves Week annually and is offered by Warren Federal and the A&FRC. Participants agree to spend three months working to reduce debt, set a savings goal, and work with the A&FRC’s financial coach. The team that makes the greatest progress wins $1,000. 

The credit union often steps in to offer services after the A&FRC makes a referral. For example, one active-duty military family was “underwater” when they sold their home by owing more than the home was worth. This meant the family had to bring $7,000 to the closing. The A&FRC suggested the family contact Warren FCU, which provided a signature loan to fill the gap.

Building loyal members is key so Warren FCU offers:

  • A Visa Rewards credit card with a variable interest rate of prime plus 3%, which currently translates to 6.25%. 
  • Free checking that pays up to 3.5% interest on balances up to $25,000 and refunds ATM fee charges when qualifications are met.
  • An “Accelerated Savings Account program” with a 5% interest rate on deposits up to $1,000 for airmen who set up an automatic allotment to savings.
  • Technology-based services that include mobile banking, text banking, online banking, and online account aggregation.

Bolkovatz says 40% of Warren FCU’s 38,000 members live out of state. Many of these remain active members of the military. Cheyenne is a popular retirement area, so some military members retain their memberships as part of their plans to return.

Next: Delivering value

Delivering value

At $15.1 billion asset Pentagon Federal Credit Union (PenFed), Alexandria, Va., members use a worldwide toll-free line to access its call center 18 hours a day, visit a shared branch, connect via iPad or mobile phone applications, correspond via e-mail, or take advantage of online financial education and services. All communication lines are free to overseas troops.

Chris Flynn, senior executive vice president of PenFed and president of its nonprofit affiliate PenFed Foundation, says active-duty military make up 36% of credit union members, with military family members accounting for another 18%. Technology is essential to connect with these far-flung members, including many U.S. members located in California, where PenFed doesn’t have any branches.

Military members who need a mortgage loan modification due to an involuntary hardship—such as deployment, death of a spouse, medical bills, or reduced income—can complete a “hardship application” on the credit union’s website. PenFed helps qualifying military members with measures such as payment deferrals, a loan to cover deficiency on a short sale, or consolidation of loans into one affordable payment.

Deb York, senior manager, service center and branch operations, says several Fort Hood branch employees are military spouses whose husbands have been deployed three to five times. These employees share their experiences so the credit union understands what military members need. The credit union stays in touch with Fort Hood members by supporting base activities, providing USO volunteers and other organizations, offering pre-deployment briefings, and holding financial education events.


  • CUNA
    • Servicemembers Civil Relief Act resources: enter “servicemembers civil relief act” in search box.
    • Consumer lending schools, select “find training by your position” and then “consumer lending.”
  • Defense Credit Union Council