Firefighters First Federal Credit Union, a $1.2 billion-asset institution based in Los Angeles, has broadened its charter in order to better serve the evolving firefighting industry.
The firefighting industry in California, as with many other professions across the country, has changed in recent decades. During the recession, there were state budget issues which resulted in hiring freezes, closures of fire stations and salary impacts. Meanwhile, the job itself has evolved to include activities such as emergency medical services, urban search and rescue, hazmat and now even anti-terrorism initiatives.
Having recently been approved for
As a result, Firefighters First FCU can now sign up firefighters from anywhere in the country -- not just the state of California. The credit union can also continue to serve an estimated 3,500 members who retired as California firefighters and have relocated to states like Arizona, Nevada and Oregon.
“Essentially, changing the charter and expanding its purview was prompted by the desire on the part of the board to develop a sustainable long-term growth strategy,” Firefighters First President and CEO Dixie Abramian told CU Journal.
Firefighters First CU, she added, remains focused on serving firefighters nationwide, thought individual departments are structured differently, along with different structures state-by-state.
“As we explore targeted growth plans under this new charter, the economy of scale advantages and resources will allow us to continue to develop and deliver the services, technologies, low fees and outstanding rates that our members want, need and expect from their credit union,” Abramian explained.
But it took a few years to finalize the conversion, she added. “We had the opportunity to create a new TIP charter for the fire industry,” she said, adding that the credit union approached then-NCUA Chairman Rick Metsger a few months ago to finalize the charter application. Prior to that, the credit union was state-chartered and under private share insurance.
“We really appreciated his interest and for accepting our invitation to help us celebrate this chapter of the credit union,” said Abramian.
Initially introduced in 2003, TIP charters enable single-sponsor credit unions within a specific trade, industry or a profession within a defined geographic area.
NCUA has approved approximately 75 requests for TIP charters since that time, according to John Fairbanks, public relations specialist at the agency. “The overwhelming majority of TIP groups fall within the education, government or health care industries,” he said. “We have seen very few TIP requests in more recent years. Since 2015, we have only approved seven TIP requests.”
Super SEG
Dennis Dollar, the head of Dollar Associates, a credit union consulting firm based in Alabama, and himself a former NCUA chief, describes the TIP charter a “somewhat of a super SEG [Select Employee Group] charter.”
“The trade, industry or profession must be well-defined and the ability of the credit union to serve the entire TIP in whatever geographic area it is granted must be proven in the application,” Dollar said. “It is a viable option for credit unions that want to stay in their historical niche of engineers, educators, medical, etc., but don't want to have to sign up individual employers within those professions SEG by SEG.”
“It is a business decision for the credit union as to whether a TIP is more advantageous or not, depending upon its strategic goals,” commented NCUA’s Fairbanks. “Some believe a TIP charter helps bolster the affinity the credit union has with the members. Others prefer additional diversification options beyond a single trade, industry, or profession to have more avenues for growth and to protect against downturns in a particular sector.”
Dollar added that his firm helps about a dozen credit unions each year move from SEG-based to the TIP charter. “It isn't a fit for those credit unions which have SEGs in a wide array of professions,” Dollar elaborated. “But it is a viable option for one who wants to stay within its historical service profession but needs broader diversification and more marketing efficiency than SEG by SEG recruiting often allows."
Abramian noted that Firefighters First CU serves the “unique needs” of firefighters with products such as fire station loans to buy things like workout equipment, furniture, barbecue grills and more. “Firefighters also like big toys, so we have made loans for such items as RVs and boats,” she said.
