First Alliance Credit Union marks 85 years of putting people ahead of profits
There are more places to put your money than ever before, and as questions about about savings, credit card debt, and student loans grow more complicated, they can be intimidating to ask. Worse still, interactions at big institutions can feel almost predatory.
First Alliance Credit Union, though, is a financial institution founded on the principle of people helping people, which stretches all the way back to the 1930s, when Rochester was just a farm town with a nice hospital.
First Alliance was born in a firehouse when a group of firemen pooled their resources to help a schoolteacher buy a home. Today it operates out of three branches and serves 15,491 members in Goodhue, Dodge, Wabasha, Winona, and Olmsted counties.
Nationwide, the number of credit unions has shrunk to just 5,600, down from over 20,000 in 1983, but First Alliance is thriving with energy and optimism.
“It’s just sort of addictive almost, in a sense,” says CEO Michael Rosek. “When you’re part of something great, you want to keep doing it.”
What, exactly, though, is so great that’s going on there?
“We offer the banking without the attitude,” says Pam Evans, director of member services. “I personally feel that credit unions are still one of the best kept secrets in the financial world.”
The institutions originated in Germany as community bartering systems predicated on the idea that a community grows if everyone pitches in together.
Today, that philosophy translates to a more personal, relationship-based approach to banking, which seems to attract the civic-minded.
Board member Harry Wobschall has volunteered with the credit union for 50 years. What’s kept him coming back?
“I guess it’s just people helping people. Basically is what I believe the credit union industry is,” he says. Wobschall should know what that looks like; his other hobbies include volunteering for Habitat for Humanity and other similar organizations.
First Alliance can focus on helping people instead of profits because of the way it’s structured. Unlike a for-profit bank, board members are elected volunteers. Each year the credit union has an annual meeting where its board of directors is elected. Members each get one vote, regardless of whether their account holds $5 or $500,000. By contrast, boards of directors for banks like Wells Fargo or Chase are all paid stockholders, and when their bank makes money, they make money.
“When First Alliance makes money, the members make money. That’s a significant difference,” says Lisette Comai-Legrand, director of marketing and product management.
Members benefit through low interest rates on loans, better interest rates on deposits, and a staff of personally-invested employees helping them tend to their financial well-being.
“The word gets out,” says Rosek. “I mean, our testimonial advertising is off the charts. We have gained so many members by people just saying ‘Hey look, come to First Alliance because they’ll really take care of you and you are served as a person and not as a number.’ I know that’s cliche, but it’s very true with us.”
That approach is also extended to people who may have a few dark patches in their financial history.
“We give people, for lack of a better term, second chances. We understand that life happens to people,” says Rosek.
“We mean what we say when we talk about no judgement,” says Evans. “If that credit score is a 500, well here’s a thing you were doing right to even have it be a 500. Let’s talk about the additional things that we can do to get you up higher. We don’t run from those scenarios. We dive right in 100 percent to offer what kind of resources we can.”
Evans even recalls situations where First Alliance has helped members search for an apartment, then provided the first month rent and a security deposit in a loan.
The institution’s mobile home financing, which they began in 2005, has helped members get into their first affordable home, maintain it, stay financially healthy, then move up a level of home ownership. Later, they partnered up members who sold homes to one another.
During the economic downturn of 2008/2009, they bent over backwards to keep people in their homes.
“We would essentially become the mortgage lender for a loan that wasn’t even ours, just to make sure. Because we’re not doing the community any good if we let neighborhoods or certain areas become full of foreclosed homes,” says Comai-Legrand.
It’s that kind of attention to community that keeps First Alliance’s employees coming back day after day.
“I’m at the part in my career where, I’m not going to lie, headhunters call me all the time. So I could go and make a lot more than what I make here. But with First Alliance, it’s not always about the money. It’s a sense of family. We take care of each other,” says Comai-Legrand.
“That’s our culture,” says Evans. “We will never treat our external members better than we treat our internal members. It’s like home training, it starts at home and then flows outward.”
For a non-member, what’s the best way to experience the difference at First Alliance?
“Put five bucks in your savings account. Talk with a Member Advisor. Tell your story. They will ask you a couple questions and they’ll give you a couple suggestions and you’ll walk out the door with one or two really good tips to help you reach your financial goals,” says Comai-Legrand.
After that, you could, in theory, open an account and never see a First Alliance Credit Union employee ever again. The institution's digital footprint is as robust as any bank’s. The website features online banking, a budget calculator, debt consolidation tools, and more.
That level of online service is indicative of First Alliance’s desire to remain on the leading edge of technology to serve younger members, of which there will soon be more of.
As the Destination Medical Center initiative pulls in more residents with affordable housing concerns, First Alliance’s long-time reputation as a credit union that cares will likely attract plenty of new members. The institution’s experience with mobile and manufactured housing may help alleviate the looming affordable housing crisis.
Regional and large banks would love to see these ‘pesky gnats’ go away, but “We’ll just continue to be a thorn in their side,” says Rosek.
They’ll continue to dig into their roots for the actions of tomorrow. Like last year, when the clocktower at Rochester’s Fire Station 1 needed moving. First Alliance kicked in $10,000 to make it happen, bringing things full circle.
Published in partnership with First Alliance Credit Union