BASKING RIDGE, N.J. – Affinity FCU President/CEO John Fenton amusingly recalls the image he conveyed when he assumed his responsibilities at AFCU eight years ago. Employees, he said, used to make sure they looked especially busy whenever they saw him because they thought Fenton was checking up on them. "I used to say to them, `I'm not here to check up on your work. Someone else will do that. I want to talk to you, find out about your family, things like that,' "he recalls "Now I can walk through the place and maybe walk in on a makeshift baseball game where people are enjoying themselves when they have the time. I also talk to a lot of our new hires and they tell me they come in the door and feel the difference. It's definitely something that's here. It's not just something we talk about," Fenton says. Affinity FCU was formed as GHQ FCU in 1935 when employees of Western Electric, AT&T's manufacturing arm, organized a credit union. Eventually GHQ FCU grew to become the credit union for AT&T headquarters and was renamed AT&T Employees FCU. In 1995, the credit union changed its name again, this time to Affinity FCU. Most of Affinity's major sponsors today were launched as AT&T spun off various operations. With 489 SEGs also contributing to the membership, are those primary sponsors still key to AFCU? "I could probably answer that yes and no," Fenton responds. "Our biggest growth still comes from AT&T, Lucent Technologies, Telcordia. A lot of our branches are still inside the corporations. "That trend is declining as those companies are declining as well. A lot of our SEGs were referred to us by former employees of AT&T. So much of our growth is still based on that AT&T culture," he says. As for challenges, Fenton indicates he could recite a familiar list that includes heavy competition, capital accumulation, technology and trying to keep the credit union philosophy. "Those are there for us, but I'm not sure those are our primary concerns," he says. "If I were to break it down to a common denominator, the member, our biggest challenge is remaining relevant to our members from a value perspective. How do we consistently meet and exceed their expectations? That's our challenge," says Fenton. "Credit unions in general are small fish in a huge pond. We're niche players and the niche keeps changing on us both from internal and external pressures. Meeting all the challenges, the stock ones that I mentioned before as well as the member value issue, is a matter of timing and resources." There never seems to be enough time, he continues. The greatest resource is human resources, especially in a service environment. That poses still another task – finding the right people with the right attitude, nurturing those people and retaining them. Prospective employees are tested on their attitudes. Affinity would rather bring on board new hires with people skills rather than technical skills. Technical know-how can be taught, but as far as Fenton is concerned, "You either have the right personality or you don't." Fenton believes AFCU has been very successful in meeting that human resource challenge. He notes turnover is less than 12%, including the call center. "My first belief as far as managing other people is to make sure they're having fun," Fenton says. "If they enjoy what they're doing, they're going to do a good job. "One of my other basic tenants is to right things I've seen done wrong. It's a matter of finding a better way to do things. I always look to be an active listener with employees. I think everybody is equal in this organization. We're all here for the same purpose – to serve members. My management style is to let people dictate how they run their affairs." Suppose Jane and Joe Potential Member move to New Jersey. They start looking for a financial institution. What would set AFCU apart? "The level of our service," Fenton quickly answers. "All of our products and services are commodities. You have to differentiate yourself some way. We do it by focusing on the member, by trying to figure out what will wow them." One example is refinancing. Like most credit unions, AFCU has seen low mortgage rates spur a surge in refinancing. Yes, Affinity offers an on-line application that allows pre-approval without ever talking to a human. But as soon as the application comes through, AFCU calls the member to tell them what they can expect next. "There's no replacing that human touch," Fenton stresses. Keeping members isn't a slam dunk. "They're very savvy. They know what they want. They know where they're going to go for it. They set very high expectations. When you have savvy people who are big on technology, we have to be cutting edge and it has to be there yesterday. "We do an annual satisfaction survey which asks members to set their expectations for financial services in general, then rate us based on those expectations. "Every year their expectations go up higher and higher. How they match us to that changes as well. Fortunately, the change has been positive. Affinity is keeping pace with their expectations." Fenton sees credit unions in general, including AFCU, becoming more complex. Besides offering 24 branches, 30 ATMs and other normal touchpoints, Affinity has five CUSOs. Under the Affinity Financial Services umbrella, the list includes Affinity Investment Services, Affinity Vehicle Services, Members Alliance Insurance and CUMAnet mortgage and real estate services. "Those are structured as limited liability companies," Fenton says. "We also set them up from both a retail and wholesale perspective. We retail everything to our members under the Affinity brand, and we wholesale to other credit unions. We have about 70 other credit unions across the country we service." Fenton earned his BA in business from the University of Steubenville, Ohio, and an MA in finance at Long Island University, N.Y. After serving as vp/finance at Clifton Savings and Loan Association, he moved on to East Bergen Teachers Federal Credit Union as vp administration and finance. He was president/CEO of Synergy Federal Credit Union from 1987 to 1995, then joined AFCU as president/CEO. Fenton's father, whom he considers a major mentor, always wanted him to go into hotel management. "Maybe he saw the people skill side of it," Fenton suggests. "I didn't listen to him, obviously." But his father may have been on the right track in several ways. Fenton likes working with people. He also enjoys watching service operations, including hotels, and observing what they do right and what they do wrong. "I don't like bad service," he notes. "I'm proud of building teams that go out of their way to serve members. This is not my first CEO experience, and I've worked to create the same type of culture in other organizations. It takes a while to build it, but once it comes to fruition the members know it and the employees know it." On weekends, Fenton tends to devote as much time as possible to his family. He's been married for 25 years, and he and his wife have five-year-old and 12-year-old daughters. He enjoys golf, but he's pretty much given that up, at least on weekends. "My girls don't seem as interested in golf as I am," he notes. Another hobby, skiing, has become more of a priority since it's something to involve the entire family. [email protected]

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