After Taking Flight, NASA FCU Adopts to Lean Times
In 1949, seven employees at the National Advisory Council for Aeronautics formed a credit union. The agency was destined to become the National Aeronautics and Space Administration in 1958, on the cusp of a time period when the space race with the Soviet Union was to end with a man on the moon.
NASA has seen budgets grow and shrink, personnel hired and laid off, and its efforts sometimes viewed as awe-inspiring, other times as a yawner. Through the decades, the credit union, now known as NASA Federal Credit Union, has kept pace with member needs.
While the membership covers people in a range of jobs, including those in more than 900 SEGs, many are highly educated engineers and scientists and so are members of the majority of more than 900 SEGs on the NASA Federal roster.
The SEG list includes the American Association for the Advancement of Science, American Astronautical Society, American Astronomical Society, American Geophysical Union, Consumer Electronics Association, Mathematical Association of America, Moon Society, National Space Society and Women in Aerospace.
There are also SEGs for people who didn’t necessarily excel in science, such as the Montgomery County Road Runners Club and the Business Forum for HR Professionals. Then there’s always the American Consumer Council. Join that consumer education and awareness group, and you qualify for NASA Federal membership.
Even with a solid membership base, tough economic times meant some members recently found money tight. The business model for checking accounts was challenged. So last fall, the credit union launched an EarlyAccess Payroll option as part of a new premier checking program.
In announcing the program, President/CEO Doug Allman explained, “We developed EarlyAccess as an innovative way to provide NASA Federal members greater control of, and access to, their money during these challenging economic times. One day or more can make a big difference to those on tight budgets and facing financial challenges.”
In July 2011, NASA Federal took another step to help members cope with the shifting economy. With the threat of a government debt default and delayed federal government payments, the credit union announced a short-term loan program. If government paychecks were delayed, members could apply for a Paycheck and Furlough Relief Loan. The offer was extended to cover members depending on government payments such as Social Security. Fortunately, at the last minute Congress avoided the crisis.
Another move by the CU last year attracted mention in The Wall Street Journal. The credit union introduced a 100% loan-to-value mortgage with no private mortgage insurance. The program was billed as a limited-time-only offer, but is still available.
Allman commented, “Changing times call for innovative and flexible mortgage products. For a limited time, consumers can get additional flexibility and affordability with our two unique mortgages not readily available through other home lenders.”
The 100% LTV mortgage allows consumers to purchase a primary residence costing up to $650,000 with no down payment. Members are also offered refinancing up to $650,000 or 95% of the home’s value, again with no private mortgage insurance.
NASA Federal has been active in commercial lending, offering commercial real estate loans over $1 million with variable and fixed rates. Loans are available for first and second mortgages on investment property, as well as property for construction development. For loans over $1 million, NASA Federal works with Potomac Business Services CUSO.
Allman said business lending has been growing, backed by a strong commercial real estate market. Overall, Allman indicated the impact of federal belt-tightening in Washington has been relatively modest on NASA employees in that area, putting them in a better position than residents of other localities.
Even so, with a wary eye on the economy, members have been seeking investment advice through NASA Federal. Pension plans and retirement expectations are challenged, resulting in what Allman describes as “very good growth” in the credit union’s investment services.
He expects to see technology continue to impact credit unions. That ever-changing technology, coupled with regulatory changes, will affect the overall dynamics of financial services. He considers NASA Federal a leader in its market area, with members expecting the credit union to be on top of the latest on-line services. Member feedback helps guide that effort.
For example, NASA Federal has already introduced version 1.2 of its mobile remote- deposit program that added iPod Touch 4G support, enhanced image usability and reports on deposits held for review. A member simply snaps a photo of the back and front of a check on their iPhone, then downloads it to their credit union account.
Like other credit unions, NASA Federal faces the challenge of keeping up with constant regulatory changes. One example is enhanced requirements for protecting member data. So as part of a backup system from Evault, the credit union data is encrypted while at the server site, while in transit during the backup and while at rest in the storage vault. Backup and restore operations must be authorized and authenticated before data transfer can begin, and those backups and restores are carefully tracked and logged.
Allman can trace his credit union background back to his college days, when he worked for a credit union during the summer. He earned his B.S. in accounting from the University of North Carolina, an M.B.A. from George Washington University and is a CPA.
In 1992, when he was 33 years old, he became president/CEO of NASA Federal.
Immediately prior to that, he was chief financial officer at Department of Justice FCU. With two children, 11 and 17 years old, and membership on a list of boards that includes Co-Op Financial Services, the Credit Union Mortgage Association, Allman’s spare time is pretty much spent on family activities.
ABOUT NASA FCU
- Assets: $1.16 billion
- Members : 79,642
- Primary sponsor and SEGs: NASA and 900 others
- Branches: 12
- Capital-to-asset ratio: 10.05%
- Loan portfolio: $716.3 million
- Employees: 257 FTE
ABOUT DOUG ALLMAN
- Married, two children.
- President of NASA Federal since 1992.
- BS from University of North Carolina; MBA from George Washington University.