Winston-Salem, NC – While most economic stimulus packages are formulated in Washington, D.C. at taxpayer expense, a local credit union’s Holiday Skip-a-Pay program proves that private solutions may be more effective. Members Credit Union (MCU) announced its Holiday Skip-a-Pay program in November to allow members to extend the due date on any non-mortgage loan, fee-free, by one month. The program resulted in the amendment of 4,089 loan agreements, accounting for $876,772 in member payment obligations.
“Giving up the cash flow from over 20% of our non-mortgage loans was an extraordinary measure taken at an extraordinary time,” says Jack V. Braswell, Jr., MCU President/CEO. “These extensions not only made the holidays a little bit brighter for our membership, our records show that this huge sum of money was likely spent right here in North Carolina.”
MCU’s ability to extend such an offer highlights its strong financial condition even as the banking industry has been turned upside down by the credit crisis. Despite well-documented struggles by financial institutions across the globe, MCU is currently in its best capital position in the credit union’s 55-year history (10.84% capital/assets). This means the credit union has more funds readily available for lending, investment, and expanding services to the credit union’s 52,000 members than ever before. While most financial institutions are tightening lending standards, boosting fees, and laying off employees just to stay afloat, MCU’s business model has remained intact.
“Our approach to lending and investing has always been to ask the question ‘what is the most responsible use of our members’ assets?’” Braswell explains. “Not once did the answer involve making predatory loans to people who could not possibly repay, or investing in instruments that encouraged, and tried to profit from, that behavior.”
This business philosophy, guided by the credit union’s member-elected, volunteer Board of Directors, has sheltered MCU from the temptations of high risk, high reward practices that led to the global financial meltdown. The result has been steady asset growth, low loan rates, high dividends, and increased service offerings – including the opening of MCU’s nineteenth branch in November.
The credit union’s Holiday Skip-a-Pay offer officially concluded in December, though loan modifications continue to be made on a case-by-case basis to help members in this tough economic time.