Arkansas in the name of Arkansas Federal Credit Union reflects its history being founded in 1956 to serve the banking needs of personnel at the Little Rock Air Force Base. But today, while this is one of the largest financial institutions in the state with more than $1.5 billion in total assets, its membership is not limited to residents of Arkansas. Arkansas Federal has more than 120,000 members in all 50 states and 22 foreign countries. It employs about 300 people and has 18 branches.
Banks have been under pressure during the pandemic, as many customers have struggled to pay business, personal and mortgage loans. While many banking institutions have had to lay off or furlough some of their employees, Arkansas Federal continues to grow and expand, opening three new branches in 2020, and is still on track to open its new Little Rock headquarters and branch office on Cantrell Road in the fall of 2021.
Arkansas Federal remains financially secure and has continued to grow during these challenging times, said Rodney Showmar, president and CEO.
“We are proud to say that there have been no layoffs, pay cuts or hiring freezes,” Showmar said. “Not only that, but we’ve also continued to hire top talent, with the addition of 97 new team members since March. We continue to experience record growth, despite the many new challenges 2020 brought. This steady, continued growth is a direct reflection of our commitment to make a difference in the lives of our employees, members and the communities we serve.”
It’s all about convenience for the member.
“We want to make it easy for members to transact with us, whether they prefer to meet with us face-to-face, through our state-of-the-art digital channels or over the phone,” Showmar said. “In addition, the combination of employee and member satisfaction is another reason we continue to thrive.”
There are no military, state, or government affiliations required to become a member. Any Arkansas resident can apply online, over the phone or at any of Arkansas Federal’s locations. A consumer can become a member by depositing $5 into a savings account. This $5 not only grants membership, but it also establishes an ownership share of Arkansas Federal.
Being a not-for-profit, 501(c)(1) financial cooperative has advantages, as the credit union doesn’t have to provide a return to outside stockholders like most other financial institutions. Instead, earnings are returned back to members.
“Profits are used to return real tangible value to our members,” Showmar said. “Whether it’s value in the form of lower fees, better loan rates, higher dividends or a combination of all of these benefits, it results in outstanding financial value for our members.”
Members maintain membership even if they move out of Arkansas, provided they maintain a savings balance of $5.
Arkansas Federal was listed as a “Best Credit Union to Work For” in the country by Credit Union Journal, and only 18 credit unions with assets of $1 billion or more made the list. Showmar said the credit union takes member feedback seriously and uses it to improve service.
“It’s one of the reasons we are proud to share the results of our Net Promoter Score (NPS) for 2020, which stands at 71 percent, which is considered ‘World Class’ by NPS standards,” he said.
One of the first things Arkansas Federal did when the pandemic hit was offer its members the opportunity to skip a payment for every single consumer loan. It proactively reduced the minimum payment required on all credit cards to $0 for three consecutive months. Members were allowed to skip two additional loan payments beyond the normal once-a-year skip, as well.
No type of proof or documentation was required to get this assistance — customers were taken at their word. Arkansas Federal also offered personal loans at a low rate for those who needed them.
Terry Vick, executive vice president and chief lending officer, said existing loans were modified for members who requested it.
“By modifying the loan, there was no need for the member to reapply. We simply utilized their FICO score at the time they applied for the loan to see what we could do. If the member thought their FICO score had improved since their original loan application date, then we could do a hard-hit credit inquiry at their request and make their loan structure even more favorable.”
Vick said Arkansas Federal employees quickly adapted to the new climate and focused on a new way of supporting members’ financial well-being.
“Teams worked around the clock to expand emergency financial services to members such as no- to low-cost loans, expanded skip-payment options, as well as other loan solutions such as the Small Business Administration’s Paycheck Protection Program loans,” he said.