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TEXARKANA, Texas – Credit union purists will applaud this $6 million-in-assets not-for-profit, member-owned cooperative. It’s plain vanilla in a world of far more than 31 flavors. It serves members with shares and consumer loans – no checking, no credit cards, and no ATMs. Situated in a town that straddles the Texas/Arkansas border, it carries the same name that appeared on its original charter, is located in the same building in which it began and has not expanded beyond its original field of membership. This inauspicious credit union, Morris Sheppard Texarkana Federal Credit Union, quietly turned 70 years old last month. It just seems fitting for the institution that bears the distinction of the first federally chartered credit union in the United States. Morris Sheppard Texarkana Federal Credit Union was named in honor of U.S. Senator Morris Sheppard, a Texarkana resident who represented Texas in the Senate from 1913 to 1941 and was a stalwart credit union supporter in Congress. Senator Sheppard drafted several pieces of credit union legislation in the early 1930s. But it wasn’t until 1934 that the passage of a federal credit union bill appeared likely, thanks to the efforts of Sen. Sheppard and another Texan who had become convinced of the bill’s importance, Congressman Wright Patman (The credit union chapter to which Morris Sheppard Texarkana FCU belongs is named for Congressman Patman.). Time was running short, as Congress was about to adjourn. Sen. Sheppard had been trying for eight weeks to get the federal credit union law enacted. Sen. Sheppard had sponsored the bill from the beginning and, such was his standing in the Senate, that he had little difficulty in getting the bill through that body. But the bill stalled badly in the House and the sands of time were running swiftly against him. In the early evening of the last day of the session, the bill passed the House.loaded with amendments calling for adoption by the Senate. As the Senate had already concluded its business, Sen. Sheppard saw only two alternatives: refer the bill to a Conference Committee, or ask the Senate for a unanimous approval of the amended bill without reading the amendments or debating the bill. He decided to do the latter. He assured the Senate that the amendments were simply perfecting amendments. Because Sen. Sheppard had the respect and confidence of every member of the Senate, and because he didn’t have an enemy in that body, the bill passed by unanimous consent. President Franklin D. Roosevelt signed the Federal Credit Union Act on June 26, 1934. On October 1, 1934, Morris Sheppard Texarkana Federal Credit Union received federal credit union charter #1. Organized to serve the employees of the City of Texarkana, Texas, operations were established then, and continue to be handled, in the city’s municipal building. For many years, a city employee ran the credit union, according to the credit union’s current manager, Michelle Daniels. “The Treasurer position of the credit union was held by at least six city employees as a part-time position. The Treasurer would devote a small portion of their day to credit union business. In 1944, this position paid $12.50 per month. The office would be in the city secretary’s office, the inspection office, or another office located in the building, depending on who the Treasurer was at the time.” In 1952, Mary E. Young became Secretary/Treasurer, a position she held for 12 years. In August 1954, Young hired Bobbie Eitel as Assistant Secretary/Treasurer. When Young resigned in 1964, Eitel became the Secretary/Treasurer. After Eitel retired from the City, she became the credit union’s first full-time paid manager in May 1993 and served in that capacity until April 2001. During Eitel’s tenure, the credit union found a permanent space within the municipal building to call its own. “Ms. Eitel is better known around here as Ms. Bobbie,” said Daniels. “She has seen the credit union through many years and did a wonderful job as manager.” Michelle Daniels succeeded Eitel as credit union manager. Daniels applied for a credit union position as a result of a conversation Eitel had with Daniels’ husband. “My husband is employed with the City of Texarkana, the fire department. In 2000, Ms. Bobbie mentioned to him that she was looking for a manager trainee and knew that I was working in a financial institution. I turned in an application just like many others did and was offered the job. I love working at the credit union.” “I have many thoughts concerning the future of our credit union, which would include checking, credit cards and ATMs. I look forward to the next benchmark of passing $10 million,” said Daniels. Incidentally, Daniels’ research on the credit union’s history uncovered the fact that her husband’s great grandfather and great great uncle were both early members of the credit union and firefighters like her husband. The credit union currently has 1,000 members, which suggests a high penetration of potential membership with city employees numbering 598. Daniels said she just has to guess how many spouses, children and grandchildren are eligible through primary members. The credit union has a history of strong earnings for its members. The only year no dividends were paid was in 1944; the credit union had a loss of $18.43. In 1975 and 1976, the credit union was awarded the NCUA’s Thrift Honor Award, given to the top 10-14% of federally chartered credit unions that had shown the largest average monthly rate of increase in total savings. “Receiving this award was due to the high interest rates being paid and an increase in the share limit per member,” said Daniels. As late as 1987, the credit union was paying a 10% dividend on share accounts. Third quarter 2004 dividend rate was 3.85%, with a yield of 3.91%. In addition, the credit union has given members interest refunds for many years. “As recent as 1994, we were giving back 10% of loan interest to our members,” Daniels said. “However, at that time, our interest rate on all loans was 15%. As of today, our loan rates are much more competitive than they were 10 years ago. We are currently offering a new vehicle loan rate of 4.25%. Last year, we continued paying interest refunds at a rate of 4.5%.” The credit union, which has one part-time and two full-time employees, operates on a cashless system. If someone wants a withdrawal, they receive funds by credit union check. Daniels believes this tradition may change soon. And her board is looking at implementation of a risk-based pricing program. The biggest change on the horizon is the possibility of moving to a new building. One has to believe that although change is in the air, Morris Sheppard would be proud that after 70 years, his namesake has not wavered from their original commitment of maintaining favorable earnings and interest rates for its members. Happy birthday, charter #1! -

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