AEA Federal Credit Union Thrives with Community Support, and Spirit
AEA Federal Credit Union, one of only two locally owned and operated financial institutions in Yuma, Arizona, is moving at a healthy, steady clip along the comeback trail, fueled by a loyal and growing membership, a highly engaged staff that reflects its community, and a confident, inclusive leader, five years after its release from conservatorship.
A decade ago, the criminally fraudulent activities of a single loan officer caused the 78-year old community credit union to suffer losses of more than $20 million. In taking control of the institution, the National Credit Union Administration (NCUA) was mindful of its statutory mandate under the Dodd-Frank Act to make every effort to preserve Minority Depository Institutions (MDI) that play a vital role in the economic life of underserved communities.
Meeting the Diverse Needs of Diverse Customers
AEA’s market in Yuma and La Paz counties is heavily Hispanic, and 51% of its membership is classified as low-income according to NCUA’s criterion for MDI designation. “What helped us stay in business is our members,” says Adele Sandberg, President and CEO of AEA. “NCUA did an economic study, and there wasn’t a good answer to the question of ‘who’s going to serve this community?’ if this credit union didn’t survive.”
Inside AEA’s main branch in Yuma, a steady stream of customers coming in to transact with the tellers – one of whom has been on the floor for 30 years – and loan officers in person speaks to the personal connection members feel to their very local credit union. “There are a lot of conversations in the branch,” Adele notes, “with tellers who shift back and forth between English and Spanish to talk to customers.” While Yuma is well known as “America’s winter lettuce capital,” with a massive multi-layered agriculture industry that includes world-famous dates, the area is also home to three military bases, border patrol workers, educators, and, for part of the year, retired “snowbirds” from the northern states and Canada. “There’s really amazing diversity here,” Adele notes.
We felt we owed it to everyone to survive, because it is so important to the community. People really fought for it.
Miriam Limon, Director of Marketing, AEA Federal Credit Union
Miriam Limon, AEA’s Director of Marketing, was with AEA before and after the conservatorship. In Yuma, the credit union is considered a big employer. There were painful layoffs, but for the staff that stayed on, it was “all hands on deck” through the troubles. “We felt we owed it to everyone to survive, because it is so important to the community," Miriam says. "People really fought for it.” The credit union’s current marketing campaign visually connects the hyper-local financial institution to its community, featuring the faces of local businesses and honoring the loyalty of long-time customers.
Now five years after control was returned to members, Adele acknowledges that it might take another 10 years until all the effects of the losses and conservatorship are gone, but they are in a good position for the future. “We’re showing both member and deposit growth and starting to get some speed behind us, and our CAMEL rating was just upgraded,” she says. As a member of the Federal Home Loan Bank of San Francisco, AEA has a large line of credit they can draw on, and they are gearing up to participate in the Bank’s Mortgage Partnership Finance® (MPF®) Program*. The MPF Program will enable AEA to expand the amount of loans they can originate while still retaining servicing and the relationship they have with a customer.
In the Yuma area, the average mortgage is around $150,000. But at AEA, the average is about $80,000. This make the credit union’s access to the Bank’s WISH first-time homebuyer program especially valuable to their customers. WISH offers matching grants of up to $22,000 to lower-income homebuyers.
Since 2017, AEA has delivered nearly $600,000 in WISH funding to help 40 of their members buy a home of their own, which is an important wealth-building opportunity for lower-income families. WISH grants have given a boost to:
- A family of five headed by a public works equipment operator
- A family of five headed by a public works equipment operator
- A family of six, including a newborn baby, headed by a production supervisor in the agriculture industry
- A family of four headed by a custodian for the City
- A self-employed single mother with one child in college and two at home
- A family of four headed by a seasonal farmworker
- A 25-year-old single mother of two who works for the County
For members who need an extra boost, AEA also offers a “New Beginnings” loan product that enables them to improve their credit score.
Building Talent and Creating Opportunity
Under Adele’s leadership, AEA is also investing in professional development for staff. “I call them the ‘up-and-comings’ – our future,” Adele says of Miriam and others on her leadership team, half of whom are women. To build effective teams, Adele is devoting time and resources to helping people understand each other’s personalities and communication styles.
She also sees mentorship as an important part of her job. “I never saw my sex as something that would hold me back, and maybe that’s because I’ve worked for good leaders who had diverse teams,” she says. “At my first credit union job, the CFO I reported to was a woman, and that had a big impact – I realized then that I could be a CEO.”
It’s noteworthy that in contrast to the rest of the financial industry, women today are well represented at the top in credit unions: 51% have female CEOs. However, the majority of women-led credit unions are at a lower asset threshold. “When you look at the statistics, it just gets worse on the way up to billion-dollar shops,” Adele says. “But I’m hopeful, because we’re seeing more of those go to women with generational turnover – even Navy Federal has a female CEO now.”
As she leads AEA into the future, Adele sees the mission as taking care of the communities they serve. The credit union’s social media platforms highlight how AEA ended 2019 with a flurry of giving, supporting an array of local nonprofits that provide vital support to their community. As Adele sees it, that’s the unique value of this local community credit union that's been serving the area since 1942. “We want to be earning for everyone: if we are, and we’ve got a sustainable structure, that means we can give back to our employees, our members, and our community.”
* “Mortgage Partnership Finance” and "MPF" are registered trademarks of the Federal Home Loan Bank of Chicago.