Ellen Ford, president and CEO of Middletown-based People’s Credit Union was recently named chairwoman of the Credit Union Association of Rhode Island, a local lobbying and public advocacy group that also provides training and support for product development and operations. Ford, who has been People’s since 1982, has led the credit union for nine years. People’s is the third largest credit union in Rhode Island, with $375.8 million in assets. Ford answered five questions about her tenure as chairwoman of the association.
PBN: First of all, how were you selected to be chairwoman of the association? A vote of your peers?
FORD: Yes. I was elected by the members of the board of directors for a three-year term.
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PBN: What will be your focus of tenure as chairwoman?
FORD: In recent years, the financial industry has been experiencing significant regulatory changes. During my tenure as chairwomen, I will focus on ensuring that the association continues to provide advocacy on behalf of the Rhode Island credit unions. I will also make sure informational and educational support for the sweeping changes continues to be provided.
The credit unions of Rhode Island are committed to providing financial literacy resources for middle school and high school students. I will ensure that credit unions across the state continue to expand financial literacy training resources for students.
PBN: What type of headwinds might credit unions face in the near term?
FORD: With the increase in regulation and oversight, credit unions will have to direct more resources to [compliance]. Tight margins will cause challenges for credit unions to maintain earnings sufficient enough to serve its members while absorbing the costs of new regulation.
PBN: There’s been a lot of talk in Washington about interchange fees – the fee that merchants pay banks for processing transactions – and the effects it might have on financial institutions. How does it affect credit unions? More deeply or less?
FORD: Yes, there has been much talk of interchange fees. Although the full impact of this change is still unknown, the transition to the interchange fee structure will negatively affect credit unions and community banks alike. Currently, most credit unions do not charge its membership a fee for the convenience of carrying a debit card. The interchange revenue was generally sufficient to help support the cost structure of offering such a program and the related losses as a result of fraud. Credit unions are committed to providing the best value for members on all accounts and the arbitrary cap on interchange fees may make this more difficult because of the cost of fraud.
PBN: There have been a few local credit union mergers of late. Is credit union consolidation something that you see happening more frequently? Why?
FORD: With the increase in regulation and the efforts to reduce operating expenses, I do see further consolidation within the credit union industry. I do not however, believe there will be as much at the local level. Rhode Island credit unions are well capitalized and have a strong membership.
