Rising over the lobby of The County Federal Credit Union’s newest branch in Houlton is a wall-to-wall replica of nearby Gateway Crossing footbridge, which stretches across the Meduxnekeag River to give walkers access to the historic downtown Market Square and trails along the river.
The idea, notes the credit union’s CEO and President Ryan Ellsworth, is to fit his business into the local community.
“We wanted to come to Houlton, so we approached Houlton Federal Credit Union and merged with them in October 2010,” Ellsworth said.
The merger gives the Caribou-based credit union an office in Houlton with 11 employees, three of whom have been added since the merger. The combination brought in the 3,300 members of the Houlton Federal Credit Union with The County Federal Credit Union’s own members to total 17,325 as of June 30.
The County Federal Credit Union had $202.4 million in assets as of June 30, a number Ellsworth would like to see grow 3.6 percent to $210 million a year from now. He’d like to see membership rise 1.5 percent, to 17,600, in a year.
“I think that is very good growth, particularly for being in an area of Maine that seems to have an overall declining population from year to year,” said Ellsworth, who became president and CEO of the credit union in March 2014 after being promoted from executive vice president.
He also plans to add a fifth location to the current headquarters in Caribou and branches in Houlton, Presque Isle and Fort Fairfield. The credit union plans to move its accounting and back office computer operations from cramped quarters in Caribou to a new facility in Presque Isle by November.
Most of the workers for the new 7,500-square-foot building already are hired, so the credit union will send them to the new building. Ellsworth expects to add only a handful of employees to its current 51 over the next few years. That includes a new position for a chief financial officer within the next 18 months at the new Presque Isle facility and a branch administrator within 24 months.
Ellsworth has experience working at both a credit union and a bank. The Presque Isle native worked at Katahdin Trust Co., a bank with $644 million in assets as of Dec. 1, 2014. He was a credit analyst in the commercial loan department there, and he was promoted to commercial loan officer before leaving in December 2004 to become executive vice president of the credit union.
Ellsworth, a University of Maine graduate who majored in business administration, initially thought he wanted to be a stockbroker and did an internship in the Bangor office of Paine Webber (now owned by Swiss bank UBS AG).
“I quickly realized I wasn’t cut out for that kind of job. It was a cold-call position to drum up business,” he said. “I don’t have that ‘Slick Willie’ salesmanship at all.”
His first job out of college was at Seafax, which creates credit reports for the food industry. The company also collects payables for the meat, seafood and poultry industry. He left after one year but said it was a great way to put things he learned in college to work, such as communication skills.
He was living in Portland but found he was returning to The County frequently.
“I missed my family and friends,” he said. So he moved home and got the job with Katahdin Trust.
Ellsworth credits his business acumen to his mother, who is executive director of the Aroostook County Action Program, a nonprofit focused on family services, energy and housing, employment and training as well as community services. She formerly managed a lab at the hospital in Presque Isle. His father was a potato farmer until Ellsworth was about 7, though his house wasn’t on the farm.
“So I was exposed to business and like it very much,” he said.
Maine has 48 federally chartered and 12 state chartered credit unions with total assets topping $6.75 billion and 655,716 members, according to a recent report by the Westbrook-based Maine Credit Union League. That translates into nearly one in two Mainers belonging to a credit union, making Maine the fifth-strongest credit union state in the nation, the league notes.
Comparatively, at the close of 2014, the state Bureau of Financial Institutions notes on its website that it regulates 42 financial institutions in the state: 12 credit unions, one savings and loan, four commercial banks, 14 savings banks and 11 limited-purpose banks. Combined assets of the 42 institutions as of June 30, 2014, totaled $17.3 billion.
Additionally, Maine credit unions have a combined 1,900 full-time and 350 part-time employees and about 1,000 unpaid volunteers who serve on boards and committees. In total, the 60 credit unions have more than $5.6 billion in savings and $4.4 billion in outstanding loans. There are 198 total credit union branches in Maine, and 238 no-fee ATM locations, which the league notes is the largest no-fee ATM network in Maine.
Ellsworth prefers working for a credit union. He said he’s found more of a cooperative spirit among credit unions to collaborate and share information on policies and other issues.
“There’s a cooperative spirit because credit unions are owned by every one of their members. Few banks are member-owned. Most are stockholder-owned,” he said.
There are two types of credit unions based on population, industry and/or location. Select employee group, or SEG, credit unions are affiliated with a company, group or union like firemen or a university. The other type, a community-based credit union, is based on a field of membership, meaning members must live, work or worship within a certain geographic location.
He acknowledges the tension between banks and credit unions because of the nonprofit status of credit unions. Because they are nonprofits, credit unions often offer better rates on deposits and loans than banks.
Maine credit unions give members benefits of $38 million annually related to better loan and savings rates and lower and fewer fees, according to an independent study in 2012 by former state economist Chuck Lawton, who now is chief economist with Planning Decisions Inc., a consulting and research company with offices in Portland and elsewhere in the state.
Banks and credit unions both take in deposits and issue loans, but credit unions don’t pay corporate income tax as banks do. Like banks, they are federally insured, but by the National Credit Union Administration for up to at least $250,000. Banks are insured for the same amount by the Federal Deposit Insurance Corp.
Banking organizations have argued that credit unions shouldn’t be allowed to keep their tax-exempt status because they have become very large. Nationwide, the tax-exempt status translates into $9.45 billion in potential federal tax revenues from 2014 to 2018, according to Office of Management and Budget estimates. But credit union organizations have countered that they pass their profits on to account holders, whereas most banks must answer to shareholders.
Ellsworth said that while there have been national efforts to change the status of credit unions, he expects them to stay the way they are for now. He notes that nonprofits in general are coming under criticism for their non-tax status, but if they suddenly had to pay taxes, if could seriously affect their survival.
He also noted that while the credit unions don’t pay taxes on net income, they do pay real estate taxes, and their employees pay income taxes.
“Banks will say if a credit union walks like a duck and talks like a duck, it should be taxed like a duck. If they’re going to compete with us and offer checking accounts, loans and all the same services we’re offering, they should be taxed like us,” Ellsworth said. “On the surface they appear the same, but the structure of ownership is different. That’s why we’re treated differently. Our profits don’t belong to us. They belong to all of our members, therefore it’s their money, and we don’t get taxed on it because it’s their profit, not ours.”