While not Discouraging CUs From Expanding Their Powers, Bommarito says CUs Should Expect to Draw Criticism From Some. MANHATTAN BEACH, Calif. - Two years ago neither Western Federal Credit Union nor TRW Systems Federal Credit Union were members of the Billionaires Club - in fact, although both were large credit...
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While not Discouraging CUs From Expanding Their Powers, Bommarito says CUs Should Expect to Draw Criticism From Some. MANHATTAN BEACH, Calif. – Two years ago neither Western Federal Credit Union nor TRW Systems Federal Credit Union were members of the Billionaires Club – in fact, although both were large credit unions, they were each only about halfway there. Then on April 30, 2003, the two merged and the new Western FCU vaulted into the $1 billion ranks. Some business analysts argue there is never a merger of equals and someone always becomes the dominant party. But CEO John Bommarito says the two credit unions did indeed come together as peers. “Both credit unions were performing very well,” Bommarito says. “The former Western had an outstanding and very productive loan program. The former TRW brought very smooth and accurate operations and reporting, and a six-year 95 percent overall satisfaction rate in service. “We served many of the same markets. We looked at our demographics on a national map and we were in almost exactly the same areas with almost exactly the same concentration of members.” Bommarito, formerly CEO of TRWSFCU and now of the new Western, also brought a few things to the merger including an in-depth knowledge of the credit union. He worked there for more than 20 years, starting in 1980 in the accounting department even before he graduated from California State University at Dominguez Hills. In fact, he notes, TRWSFCU paid for virtually all his education, including MBA and law degrees from Loyola Marymount University. He passed his CPA and bar exams while working at the credit union. There has been only one break in his service and that was a three-year stint at KPMG as part of the experience requirement for his California CPA certification. In late 1993, when the CEO retired, Bommarito was named to the post. “I enjoy it here,” he states. “I love the people and I really enjoy the board. They helped raise me, and I’ll never forget that.” That attitude is reflected in his management approach. “We employ what I think is a unique strategy with regard to our professional and career staff. I have a very, very clear bargain with my employees. If they hold up their end and do the job the credit union needs of them, I make sure there’s no economic or other reason for them to pursue a career elsewhere,” Bommarito says. While he sees the merger as a very positive step, it was kind of a shock to some members. So Bommarito and other top managers began what will become a series of Member Roundtables. “We felt once the smoke cleared and members could start seeing the results of the merger, it would be a good thing to give them an opportunity to tell us what they like and what we need to improve,” he says. “It’s not a statistically significant sample. It will show a bias toward high users. It’s not a focus group in the traditional sense. It’s an opportunity to learn from members who are willing to give up a Saturday morning, come down here and tell us what they think. We already did one in mid-November and received a lot of lauds and very constructive input. We’re looking forward to doing more in the future,” Bommarito says. Bommarito figures he and other managers now have the advantage of looking at the merger in a rearview mirror. He praises the hard work that went into integrating details such as corporate policies and procedures and putting together a competitive product mix. Now, he notes, the focus is shifting. “We recently returned from our first true long-range planning meeting with our newly-constituted board. We were able to devise a series of strategies we believe will take us into the future. Unlike many credit unions who hunker down into community charters or have focused on a single geographic area or a few large areas, we have decided to employ a multi-market strategy to build our business and grow in the areas where we’re currently located.” This may mean WFCU could end up being a series of large credit unions across the country, all under the Western umbrella. The approach is one of grow where you’re planted and plant new seeds where you ought to be. Bommarito is convinced the credit union has the in-house marketing and business development talent to do the job. The challenge is allocating resources. “You have to pick and choose priority areas, and that will change over time,” he says. “We may select two or three different markets or membership groups and really focus on them for a few years. As that business grows, we may go on to other things. It’s really part and parcel of a multi-market strategy. We make decisions based on the needs of the membership at that time in those locations, and our belief that the capital and other resources we invest will bear fruit for the members and the credit union.” If there is any negative in the merger, it’s a personal one. Bommarito stresses he’d do it again, but it was difficult to spend the time away from his wife and their three children who range in age from two to nine. He does his best to find the time for them as well as his hobbies of fishing, golfing and cooking. Actually, his passion for cooking extends into the office as well as his home. “I love to cook for my staff. I think it’s one of the things that makes their career experience here very special. We have a large kitchen here and our own vegetable garden and fruit trees. We make sauce from scratch. We also have several barbecues and smokers on the premises. We’re doing Mexican food today. We make very good meals. Whatever people are hungry for, I’m happy to cook it. We rarely go out. We meet all of our obligations, but we have a heck of a good time doing it. “When you’re Italian, you tend to look in the cupboard, see what’s there and find things that work together. With three young children, the opportunity to cook for guests at home doesn’t come as often as it used to. But my wife sure enjoys it when I cook here and bring some home to her. She’s an excellent cook.” He’s also an avid UCLA Bruins fan with season football tickets. “As soon as my kids are out of diapers, they’re sitting next to me on Saturdays at the Rose Bowl,” he declares. So life is good. But Bommarito does express concern about an attitude in the credit union industry that the social mission is so compelling credit unions should be impervious to any attacks by bankers or others. “I get concerned because I see us employing that attitude in a way that suggests we can do whatever we want and at the same time hide behind our credit union philosophy, our not-for-profit member-owned structure, as an impenetrable force field that keeps us from being taxed or facing any restrictive regulations. A compelling argument today may not be impenetrable in the future,” he says. “I think we can still defend out actions. But we have to be careful. We can’t always control the environment in which we operate. I think we have to move carefully, balancing the risks in continuing to ask for expanded powers, especially with regard to serving nonmembers. We have to accept the fact it is going to bring the ire of those who see us as a challenge or threat.” -
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