HARRISBURG, Pa. (9/16/14)--The Pennsylvania Credit Union Association (PCUA) and the Federal Home Loan Bank of Pittsburgh, through recent collaborative efforts, have initiated a partnership onto which each organization hopes to build.
(Editor's note: This is the second of a two-part series on the Federal Home Loan Bank system. Part One was called "Where FHLBs can fit in CU operations" and ran Sept. 15. See resource link).
Given the cooperative, member-owned structure of both credit unions and the Federal Home Loan Banks--and thanks to a recent pickup in credit union membership at the FHLB of Pittsburgh--the relationship that's building between the Pennsylvania league and the FHLB of Pittsburgh seems to both to be a natural fit.
Christina Mihalik, PCUA vice president of government affairs, told News Now that when the association detected growth in credit union membership in the FHLBank, it reached out to strengthen the relationship there.
"If credit unions are partnering with a third party, we figured it would benefit us to reach out and establish that relationship," especially because we have like-minded, cooperative issues we can work on with the Federal Home Loan bank, Mihalik added.
That collaborative work has ranged from general advocacy on common issues such as regulation, consumers and housing, to efforts to address specific issues such as the National Credit Union Administration's risk-based capital proposal. Very notably, the FHLB system's leaders wrote a comment letter to the NCUA earlier this year outlining its concerns over the proposal and how it might affect its credit union members.
And on the operations side, of course, the cooperative banks help their members by offering funding for liquidity for short-term needs, lower-cost funding for mortgages and asset-liability management, and funds for housing and community development (News Now Sept. 15).
"We are really a business partner to financial institutions, and they've come to realize that's exactly what we are. It's a symbiotic relationship; it's a partnership," John Foff, FHLB of Pittsburgh's business development manager, told News Now.
The first building block of the relationship, described by both organizations now as growing, may have occurred when FHLB of Pittsburgh's CEO Winthrop Watson spoke at the league's annual conference two years ago.
"The managing officers of the local credit unions appreciated his words, and I think that that's helped us in our relationship with credit union financial institutions," Foff said.
More recently, the cooperative bank has reached out to credit unions in Pennsylvania by coordinating efforts such as setting up a booth at the PCUA's annual fall leadership conference.
Mike Wishnow, PCUA senior vice president of communications and public relations, says that the FHLB of Pittsburgh has been reaching out to credit unions regularly.
"The FHLB banks deserve a lot of credit because they're doing the outreach," Wishnow told News Now. They reach out by "sponsoring efforts, helping in advocacy, and keeping credit unions informed on what they're doing."
Whatever the spark, over the last few years the FHLB of Pittsburgh has witnessed credit union membership rise substantially. Just a few years ago, only four credit unions in the state utilized the cooperative bank.
That number has jumped to 37, and about a dozen credit unions are interested in becoming members as well, according to Foff.
"As more and more (credit unions) use their services and are pleased with their services," the more the word is spread, Mihalik told News Now. "Word of mouth is everything. A credit union referral is the best way" to spread the word.