Serving a (Really) Wide and Diverse Audience
CEO Dan Cumbee discusses Dakotaland CU's focus on its sprawling, rural membership.
Dan Cumbee, CEO of Dakotaland FCU (right), accepts the Community CU of the Year honorable mention award in the under $250 million in assets category from Pete Dzuris, CEO of Northland Area FCU, Oscoda, Mich., CUNA Board member, and chairman of CUNA’s Community CU Committee.
During Dan Cumbee's tenure as CEO, Dakotaland Federal Credit Union has expanded its field of membership to an area encompassing 19,440 square miles—a sizable portion of eastern South Dakota.
Within that massive area, the $229 million asset credit union based in Huron, S.D., serves a wide range of consumers. Among its 20,986 members are those whose credit unions merged with Dakotaland Federal in recent years to gain access to a greater range of products and services, and a group of refugees from southeastern Asia--many of whom had never before done business with a financial institution.
Cumbee discusses with Credit Union Magazine the philosophies that have guided Dakotaland Federal's growth, and garnered honorable mention status in the 2013 CUNA Community Credit Union of the Year award competition among credit unions under $250 million in assets.
Credit Union Magazine: What are the challenges in serving such a broad geographical area?
Dan Cumbee: The NCUA made a change in community field of membership that allowed credit unions in rural districts to get a much larger territory. Prior to that, we were somewhat locked into our original county and five low-income county areas—and they weren’t even always full counties.
That made it tricky to qualify people for membership. I’m in the belief of trying to remove limitations as much as possible.
We applied for what I would consider a fairly large territory, pushing boundaries in a way that’d allow us the greatest possibility for expansion over time. But it’ll take us a while to serve all those areas.
We’re still in only six of the 25 counties, and looking at going into a seventh at year-end. I don’t know if we’ll ever reach most of these counties.
They’re very rural; the entire field of membership is 10 people per square mile. With a lot of those counties, you can’t afford to put in a traditional branch.
Also, we’re not just rural but also northern. We have four to five company vehicles and sometimes almost all of them are on the road, heading to one branch or another, because of the distances between our facilities.
That’s a bit of a challenge. And in the wintertime, when it can be dangerous to have employees on the road, we have to alter our schedules a fair amount.
We constantly work on communicating. It’s not as easy as running across town.
CU Mag: Why have you been able to originate nearly 50% of home mortgages in your main county over the last five years?
Cumbee: We definitely put a lot of emphasis on it. We’ve always considered mortgage lending as our prime lending, what we’ve tried to be the best at. It’s been that way for the last 15 years.
We’ve benefited from the low rate environment and the fact we retain servicing. That way a member can get a loan with a particular officer and, 10 years from now, if they have a problem or a question, they can talk to same officer. We go over the top on service to the members.
CU Mag: What have been your experiences developing financial relationships with more than half of the area’s approximately 1,500 political refugees from Burma and Laos, the Karen [ker-IN] people?
Cumbee: We’ve got a fairly new turkey processing plant nearby that employs about 1,000 people. The plant struggled getting reliable, hard-working employees. They went out and recruited this group to the area.
The Karen are from Burma and Laos, and are political refugees. The Burmese armies were basically shooting these people on sight. They went into in refugee camps and then came to the U.S. We are one of the main areas they wound up.
When the Karen first come here, they were illiterate to our ways of life. There’s a lot of training that’s required. They don’t know anything about financial institutions; that’s something they’ve never experienced.
So we started at the ground level by getting them in with a membership. Almost all of them take out a checking account and get ATM cards.
There’s quite a language barrier, and beyond that a lot of different dialects. Quite a few of them don’t read or write.
The younger ones are really quick learners, but folks like myself and older, we’re not as quick to learn new things. We hired a full-time interpreter, and she’s kept extremely busy. We use her to communicate and educate as much as possible about how things work.
It’s very rewarding to serve that segment of our population. They’re not seeking all the thrills that typical Americans do; they’re very humble and appreciative of what they get. Just good people.
We serve about half the population. The other half is unbanked, for the most part. In some cases they’ve never trusted government or establishments, so it takes time to earn their trust and communicate the services we can offer them—and frankly, some don’t have a need. We probably gain 10-15 new Karen accounts per month.
Our biggest goal is trying to educate them against payday lenders and taking auto financing at the dealer at 24% APR. A lot of that sort of stuff goes on.