In 2006 per capita income is more than $33,000, so 10 people forming a credit union would have to chip in $330 each to raise $3,300, an equivalent amount in today's dollars.
Now known as Nassau Educators Federal Credit Union, that fledgling cooperative has grown to more than $1 billion in assets. One thing that hasn't changed is a primary focus on serving educators. While Nassau Educators has expanded to serve colleges, universities and some professional SEGs as well as employees working in K-12 schools, there is no community charter and you won't find a list of mergers.
Teachers remain the core of the credit union, and that's just fine with President/CEO Ed Paternostro and the board. He points out Nassau Educators has been able to grow membership at about seven percent a year, and that is expected to continue. Sure, the credit union has considered a community charter, but there seems to be no real reason to change.
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"We've evaluated a community charter, but we felt a community charter kind of waters down your focus," Paternostro says. "We want to be very true to our current members and potential members. We felt this is the niche we want to be in, the niche our members want us to be in. We felt if we went out to the community we'd be just like a bank." Of course, that doesn't mean serving educators is always easy. Many CEOs of education-focused credit unions see demands on educators constantly growing, and it's difficult for teachers to find any free time.
So Nassau Educators has steadily made changes, from ATMS to on-line bill pay, that can help teachers make the most of their time.
"The teacher of today is technology oriented," Paternostro says. "They're also pretty financially savvy. They are quality members. We're in a very competitive area. We have every financial institution in the country here in New York. Many, many of these organizations are targeting educators–Charles Schwab, J.P. Morgan, Wachovia, all trying to get into the schools to solicit teachers." Certainly credit unions have been working to tout the credit union difference. Do members understand? Do they consider the credit union their credit union? "We do have a lot of members like that," Paternostro answers. "Is it as prevalent as it was years ago? I don't think so. When I came here we were 20,000 members and they were a lot closer to what the organization was like. Now we have 116,000 members. But once they're here, they feel the difference. Our mission is to make sure they feel special when they come in." Asked if Nassau Educators is typical of Billionaires Club members, Paternostro offers a forthright answer. "There are some good ones and some not so good billion dollar credit unions. I would put myself in with the good ones, the ones that continue to follow the credit union philosophy of putting members first," he says. "We're a non-profit and we don't want to make a large profit. Any large credit union that functions like that, I want to be like them. If they're a large credit union trying to make as much profit as possible and operate like a bank, I don't want to be like them." Paternostro believes word-of-mouth has been crucial to Nassau Educators success. "That derives from our ability to deliver the best service possible. Teachers, secretaries and others all get together. They will talk about our service or things that happened to them at the credit union," he notes. "People come in here and say, 'So-and-so told me I should join this credit union. They got a loan here and they got the best rate. They said the people were wonderful.' That continues on and on. We encourage it by going out to the different schools on a regular basis and meeting with members and non-members."
In addition, for 10 or 15 years Nassau County has enjoyed what Paternostro describes as a very good economy. Growth has meant new teachers are being hired, and unemployment is below the national average.
If there's a problem, it's the fact competition for top-quality employees is stiff, and it takes high salaries to attract them.
Challenges aside, Paternostro considers himself one of the happiest people you'll ever meet. Always has been, he says. Well, there was that one-year tour of duty with the Army in Vietnam, but everything was uphill from there.
"I'm happy just walking on top of the grass," he declares.
Paternostro graduated from Adelphi University with a major in business administration. He then worked in the savings and loan industry for 21 years.
By 1986 he had risen to the role of executive vice president. He liked banking, but S&Ls were merging at a rapid pace, and the future didn't seem very stable. A friend mentioned credit unions. So Paternostro investigated and found an opportunity as CEO at Nassau Educators. He met with the board, and decided they had a very good philosophy. It was the kind of work he wanted to do, and is still doing 21 years later.
He credits an "outstanding executive team" for Nassau Educators success during those two decades. Like other managers of large businesses he's learned to delegate and trust.
He's proud of his family, including two daughters. The youngest just turned one year old. The other, who is 35, recently informed her parents they will soon be grandparents for the second time.
He's also proud of a Nassau Educators community involvement committee established to raise money for a wide range of causes from cancer and muscular dystrophy to Make a Wish. During the past 10 years the effort has raised more than $350,000.
"That brings joy to my heart, because that's what we're all about, people helping people," Paternostro says. –[email protected]
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