NEW YORK–It began its life with $570 as the Credit Union of Employees Conference Committee, City of New York. It’s lived through a depression, was once led by the man whose name would go on Shea Stadium, was among the first to introduce “Phone-A-Loan,” and had an up-close view of the collapsing towers of the World Trade Center.
Municipal Credit Union is marking its 100th anniversary, and its history is also very much that of credit unions. As the world celebrates International Credit Union Week this week, kb-studio.ru is sharing the credit union’s historical birthday by highlighting—decade by decade--Municipal CU’s century of existence, with both a look back at the milestones and a look ahead from its current CEO, Kam Wong. Wong himself has a history with the now $2.5-billion CU, having taken a job in 1981 in the accounting department. He became CFO in 1988, president in 2006, and CEO was added to his title in 2007.
Below you will find not just fascinating pieces of Municipal CU’s history, but credit union history, as well as insights as shared today by Wong.
The New York State Banking Department receives official documented request for the establishment of a Credit Union of Employees of the City of New York.
The request comes with pledges from 19 charter account holders to deposit $570 to establish the institution.
The credit union’s name is changed from the “Credit Union of Employees Conference Committee, City of New York” to “Municipal Credit Union.”
'One Big Advantage Over Banks'
kb-studio.ru: You started at the credit union in 1981. What has it been like competing for business in the Big Apple today, both in your time leading the credit union and before?
Wong: The competition here is very keen. All of the big banks—Citibank, TD Bank … there was a big influx of the major banks in the early 2000s, which certainly stepped up the competition. But we have one big advantage over these banks, and that is our members are of modest means. The banks have deemed these consumers to be unprofitable. They can’t afford to offer the low-cost products and services like we do, and we emphasize a great deal in our advertising that we are low cost. Our members need low-cost services. That is our niche.
January 1920 – Total Members: 3,400; Total Shares: $216,432; Total Loans: $236,506
April 1920 – MCU’s president is part of a committee to consider the formation of a New York State league of credit unions.
April 1920 – MCU helps American Express start a credit union.
March 1922 – The Credit committee raises the loan amount from 10% of annual salary to 15%.
May 1923 – New York Governor Al Smith signs a bill allowing credit unions to offer loans on real estate secured by mortgages
April 1926 – MCU begins to issue checks to individual creditors in cases where loans are for debt consolidation.
June 1929 – A new bylaws amendment allows an officer or employee of the state of New York residing in the City of New York to also be elected to membership.
December 1929 – MCU has nine employees with salaries totaling $15,197. Loans outstanding totaled $1,361,983.25.
Using ATMs To Provide Convenience
kb-studio.ru: The banks may not be a huge threat to you, but as CUs have moved to community charters have some been able to chip away at your field of membership, a group that has been steadily employed over the years?
Wong: Our membership has remained strong and loyal to Municipal. We have a strong bond with them. Not only has our service and low-cost banking kept them with us, so too has convenience. We have 200 ATMs across the city that don’t charge our members a fee. We have ATMs in many of the facilities where they work. We have three in the New York City Police Department headquarters.
January 1930 – Total Members: 12,647; Total Shares: $1,415,155; Total Loans: $1,459,840
October 1931 – Twelve MCU employees agree to donate 1% of their bi-monthly salary to a special fund to help unemployed civil servants.
January 1932 – MCU is reported to be the largest New York State chartered credit union.
January 1933 – The New York State Banking Department approves MCU’s request to establish Christmas Club Accounts, which pay 2% interest.
December 1933 – MCU reports no charge-off of bad loans during 1933 despite the depression.
March 1936 – MCU begins remitting funds for its 11 employees to the newly established Social Security Administration.
November 1936 – Municipal Credit Union joins CUNA
Surviving The Recession
kb-studio.ru: You mentioned that the Great Recession of the early 2000s was a critical period for Municipal—when you made some important decisions.
Wong: The financial crisis arrived shortly after I became president and then CEO, and it was a big challenge for me, and for the credit union. In late 2008 I began to worry about reputation risk for the credit union due to the crisis. I did not want people to think that because the big banks were in trouble that we were in trouble too. Many people were of the mindset that all financial institutions at that time were in trouble.
So I asked our marketing department to come up with ideas about how we could instill confidence about the credit union in our members and in the community. We ended up launching what we called the “strong, trusted and growing” campaign. Those were the traits of our credit union that we wanted people to know about and understand.
It was well received. We started with some full-page ads in the major newspapers here. Not only did we tell people we are strong, trustworthy and growing, we also told them that we were not a contributor to the financial crisis.
People at that time needed to quickly understand who we are and what we stand for. Even today, I have to say, not a lot of people know what credit unions in general stand for.
January 1940 – Total Members: 26,206; Total Shares: $4,153,225; Total Loans: $3,483,966
January 1940 – MCU has 18 employees whose salaries total $33,814.36
January 1940 – MCU arranged with a number of auto dealers to provide cars at a discount of 10% from lists and 25% discount on accessories.
May 1941 – MCU is authorized to act as an issuing agent for Series E. Defense Savings Bonds.
March 1946 – To assist returning veterans, MCU begins accepting applications for loans up to $5,000 and 4.5% interest rate.
January 1947 – MCU does not charge delinquent interest on loans to members serving in the armed forces.
February 1947 – Governor Dewey signs a bill allowing the spouse of a credit union member to become a member of that credit union.
November 1947 – Banking Department allows MCU to offer loans to the spouse of a member if he/she has independent income.
Steps Taken To Survive The Crisis
kb-studio.ru: What steps did you take during the crisis that helped Municipal weather the tough times and thrive?
Wong: When we saw mortgage delinquencies climbing we took action immediately. We were one of the pioneers in launching a forbearance program. We told members that if they have a problem we will work with them, give them a payment deferral—we started with six months and considered further extensions based on each circumstance. We allowed these members to eventually refinance if they wanted.
My thinking in offering the program is that if some of my members can’t afford to pay for their house due to a temporary financial reason, what good would it do to take over the house? It would not do my members any good or the credit union. Why would I want to take over a house with a mortgage that was probably upside down? I would have to sell the home at a loss. Why would I do that
January 1950 – Total Members: 38,028; Total Shares $9,840,325; Total Loans: $9,542,040
May 1951 – MCU adopts a pension plan for its employees.
November 1951 – William Shea, who would later lend his name to Shea Stadium in Queens, N.Y., is elected to the MCU board.
April 1954 – MCU, in coordination with the New York State Credit Union League, agrees to sponsor two cooperative housing projects of more than 400 units called Chatham Towers and Chatham Green. They were located in the vicinity of the Manhattan Municipal Building and construction costs exceeded $8 million.
July 1956 – The MCU board moves to allow an increase in the loan amount from 10% of the member’s annual salary to 20%.
February 1957 – As directed by the Banking Department, MCU hires its first outside auditing firm.
'Proud of the Actions We Took'
kb-studio.ru: You said the forbearance program was very successful?
Wong: Yes. At the height of the financial crisis we had 200 to 300 mortgages in the program, now we are down to 30. We have these loans in place now and they are performing and members have their homes. I am very proud of the actions we took.
January 1960 – Total Members: 48,000; Total Shares: $12,132,557; Total Loans $12,320,394
January 1961 – MCU begins paying dividends semi-annually.
November 1966 – MCU celebrates its 50th Anniversary at the New York Downtown Athletic Club. Since its opening in 1916 to this date, MCU had approved more than $250 million in loans to more than 175,000 members and paid more than $9,000,000 in dividends. MCU’s president is William F. Shea.
April 1968 – MCU begins offering joint accounts.
June 1968 – The board, by resolution, authorizes management to enter its first data processing contract with the service bureau.
November 1969 – The New York City Housing Authority becomes the first city agency to offer payroll deduction to MCU members.
'Let's Take the Opposite Approach'
kb-studio.ru: Any other steps you took during the crisis that stand out?
Wong: The banks tightened their credit guidelines during the recession, especially around credit cards and auto loans. So I said, let’s take the opposite approach. I believed that if people can’t pay for their home they will still pay for their credit cards and cars because they really need those things to get by. We created several marketing campaigns around auto lending and credit cards and took a lot of business from banks. People told us we were too aggressive in these two areas. But as it turned out, we were right. For the first time delinquencies on auto loans and credit cards were lower than mortgage delinquencies.
January 1970 – Total Members: 52,397; Total Shares: $27,978,918; Total Loans: $28,783,565
July 1970 – The NYC Health & Hospitals Corp. takes over the city’s hospitals and its employees immediately become eligible for MCU membership.
April 1971 – The chairman of the NYC Health & Hospitals Corp. is elected as MCU’s 200,000th member.
July 1971 – MCU invests more than $500,000 in several minority banks and savings and loans institutions, including Freedom National Bank; Carver Federal Savings, and Banco de Ponce.
September 1971 – MCU relocates its back office from the Manhattan Municipal Building to 156 William Street.
April 1972 – NYC Comptroller Abe Beame announces a payroll deduction plan for City workers is approved.
March 1977 – MCU introduces its in-house processing system.
August 1978 – Phone-a-Loan is introduced.
Up Close View On September 11
kb-studio.ru: Where were you during 911? (MCU’s offices are located adjacent to the World Trade Center site.)
Wong: I was SVP/CFO at the time. My COO was not in office yet but was on his way to our headquarters when the attacks happened. So I was in charge. At 8:30 I was walking through our departments and I heard an explosion and then saw a flash, from the fireball. I immediately thought of the 1993 World Trade Center bombing and I thought this was another bomb. But when I went downstairs I saw one of my mangers crying in the hallway. She said, ‘Kam, I saw a plane fly into the tower.’ I did not believe her.
But having been around in 1993 and having to evacuate staff at that time, I began asking employees to leave the building. I walked three of our five floors, and two staff members walked the other two, evacuating employees. I did not want to take any chances.
But I did not leave. And when I went back to my corner office with a window that faced the South Tower of the World Trade Center, I saw the other plane hit. I saw it with my own eyes and said, ‘Oh, my god. This is really bad,’ and I left the building.
As I was heading to my car I said I can’t leave without checking on our downtown Manhattan branch. So I walked over there. When I got there I won’t forget what I saw when I opened the door—80 employees huddled in the branch where only 20 people work. A lot of our employees were on their way to work when the attack happened. Those near our Manhattan branch went inside that location and waited for instructions from the credit union. I told them all to go home.
January 1980 – Total Members: 137,774; Total Shares: $89,894,560; Total Loans $61,032,012
May 1983 – MCU begins offering IRAs.
May 1983 – The MCU Brooklyn branch opens at 185 Montague Street. In addition, the MCU Manhattan branch opens at 2 Lafayette Street.
November 1983 – MCU contracts with PFP Insurance Company to provide life insurance for its members. The premiums will be paid through payroll deductions.
January 1985 – MCU’s membership in a shared ATM network (NYCE) is approved.
January 1985 – The MCU Bronx branch opens on East 150th Street.
September 1985 – Holiday and vacation club accounts are established.
April 1986 - MCU takes over HYFIN, which expanded its membership base to include healthcare and education fields.
May 1986 – The MCU Staten Island branch opens at 80 Bay Street.
October 1986 – The Touch Tone Teller system is established
Remembering Black Monday
kb-studio.ru: Are there any other points in time, in the history of the credit union, that stand out for you?
Wong: There are many, but a few others come to mind, one being Black Monday when the stock market crashed in 1987. Until then, I think a lot of credit unions, including Municipal, thought they were immune from any problems in the economy, that nothing would be felt from economic issues. But while it was not a problem, Municipal for the first time saw large amounts of deposits moving from the stock market into the credit union. That told us the economy certainly can have an effect on credit unions.
And there was the Y2K scare. While nothing happened, it made us think. We said the credit union has grown and is a lot bigger now. What would happen to us—to the credit union and our members—if everything stopped. So we had to think about that possibility and prepare for it.
I also recall our major system conversion in 2006, when we flipped the switch on Labor Day weekend. It took us two years to complete, but when we finalized the conversion it went smoothly without a single hiccup. And that is for a credit union that today processes five million ATM transactions each month. That’s just ATMs. Out transaction volume is huge.
January 1990 – Total Members: 194,000; Total Shares: $276,314,500; Total Loans: $158,008,055
September 1991 – MCU begins offering youth accounts.
November 1991 – MCU celebrates its 75th Anniversary.
January 1995 – MCU provides 25 $1,000 scholarships to high school seniors.
January 1997 – The MCU Co-op City branch opens at 755 Co-op City Blvd.
February 1997 – The MCU Elmont branch opens at 1660 Hempstead Turnpike.
April 1997 – The MCU AutoNet program is introduced.
July 1998 – NYACK Hospital Employees Federal Credit Union joins MCU ranks.
September 1998 – Brooklyn Postal Employees Federal Credit Union is merged into MCU.
July 1999 – MCU launches nymcu.org.
January 2000 – Total Members: 272,059; Total Shares: $628,376,276; Total Loans: $562,448,635
May 2001 – “MCU OnLine,” a PC-based home banking tool, is introduced.
November 2004 – MCU opens new Yonkers branch at 38 South Broadway.
February 2004 – MCU joins the Co-op Network, making more than 19,500 additional ATMs available to members for use for free.
January 2007 – MCU opens the Melville (Long Island) branch at 498 Walt Whitman Road.
March 2007 – MCU President Kam Wong is named the chief executive officer; he continued to hold the title of president.
April 2007 – MCU opens the Georgetown (Brooklyn) branch at 2142 Ralph Avenue.
October 2007 – MCU opens the Flatbush (Brooklyn) branch at 1560 Flatbush Avenue.
2008 – MCU opens the Oceanside (Long Island) branch at 3411 Long Beach Road and the East Meadow (Long Island) branch at 1 Merrick Avenue.
December 2008 – MCU experiences one of its largest deposit growth years since opening its doors, despite the economic crisis, with member funds increasing by more than $75 million.
December 2009 – Total loans increased by $127 million, bringing the portfolio to $1.2 billion.
January 2010 – Total Members: 313,269; Total Shares: $1,281,149,578; Total Loans: $1,200,858,519
January 2010 – MCU becomes an in-clearing institution for check processing.
June 2010 - The Brooklyn Cyclones play their first game at the newly named MCU Park (formerly Keyspan Park) in Coney Island. MCU agrees to be the park’s Naming Rights sponsor through the year 2021.
April 2011 – MCU opens the Coney Island branch, which is adjacent to MCU Park.
July 2011 – MCU sponsors the World Police and Fire Games, which was held in NYC for the first time.
January 2012 – MCU launches its first mobile banking app.
August 2012 – MCU opens the Springfield Gardens branch at 134-66 Springfield Boulevard.
November 2012 – MCU announces its Member Assistance Program for members affected by Hurricane Sandy.
October 2013 – MCU announces a Federal Employee Assistance Program for those affected by the federal government shutdown.
April 2014 – MCU establishes the Build a Better School Initiative, a public sector/private sector partnership to help NYC schools.
May 2015 – Sylvia Ash is named MCU board chair; she is the first female board chair in MCU’s history.
August 2015 – MCU opens its first “smart branch” in Rego Center.
December 2015 — MCU membership tops 400,000.
January 2016 – MCU Achieves Full Payment Card Industry Compliance.
October 2016 - MCU celebrates its 100th Anniversary