Credit Unions

Longevity Lessons From The Oldest US Credit Union

With its conservative approach, rooted in the Great Depression, St. Mary’s Bank of Manchester, New Hampshire, has endured more than a century of economic challenges. In the latest PYMNTS Credit Union Tracker™, in collaboration with CO-OP Financial Services, St. Mary’s COO Ken Senus, offers insights into how the credit union has kept its doors open during difficult times — including why, even against newer competition, it is appealing to younger millennial members. Plus, the latest headlines and trends from around the space, all inside the Tracker.


As credit unions (CUs) face increased competition from traditional banks and new players from the FinTech crowd, many institutions ponder the same question: What can we do to keep our doors open?

Unfortunately, there’s no silver bullet available, but CUs looking to stay in business might consider taking a lesson from a fellow credit union — one that has been in business longer than any other member-owned institution.

Founded in 1908, St. Mary’s Bank of Manchester, New Hampshire, holds the distinction of being the nation’s first and oldest credit union. According to its website, the CU was initially founded in a Manchester parish as a resource for Franco-American immigrant mill workers who had settled in the area and wanted to borrow and save money. Membership could be obtained by spending five dollars on a share of capital stock.

St. Mary’s was initially chartered in 1909 by the New Hampshire legislature. A 1925 amendment to the organization’s charter allowed the financial institution (FI) to be referred to as either “La Caisse Populaire, Ste-Marie” – translation, “The People’s Bank” – or “St. Mary’s Bank,” as it is currently known.

The CU has seen considerable growth over the years, currently serving more than 100,000 members and holding more than $989 million in total assets. It operated out of its first volunteer president’s home for its first five years before moving to a rented office in 1913, later relocating to its own building in 1930. St. Mary’s has since occupied the same site, constructing a new building in 1970 and replacing that structure with its current headquarters in 2013. The CU’s original home is now the site of America’s Credit Union Museum.

PYMNTS recently spoke with St. Mary’s chief operating officer, Ken Senus, about how the credit union has evolved since it was founded and why, perhaps counterintuitively, its age is an appealing factor for millennial members.

Conservative Approach, Rooted in the Great Depression

St. Mary’s has endured a century’s worth of economic challenges since its founding, including the Great Depression and the 1935 bankruptcy and shuttering of the Amoskeag Manufacturing Company, a textile firm that served as a significant economic engine for the Greater Manchester area in the early 20th century. Economic troubles also hit the Manchester community in the late 20th century, as several local banks closed during the recession of the early 1990s.

After enduring delinquencies and losses, St. Mary’s focused on loan loss reserves to return to profitability in 1992, a spokesperson said. According to Senus, the CU emphasized a “conservative approach” in its lending decisions to emerge successfully from the difficult economic environment.

“We made sure we were providing value to our membership,” he said. “We also made sure we weren’t putting them in a position [that] was risky.”

This thinking is the key for credit unions to stay in business, Senus explained, even after a century of changes and challenges.

“The secret to longevity is staying current with the changes in the industry and being wise in your practices, making sure to make smart decisions for [your] members and smart decisions for their money,” he said.

From Mill Workers to Millennials

To effectively stay in tune with the changes facing the credit union market, member-owned institutions must focus on how technology is shaping the industry, Senus noted. Older credit unions that have managed to stay in business for many years, including St. Mary’s, are staying informed about what services their members expect an FI to deliver.

“We’re adapting and keeping on top of what’s taking place in the industry,” he said. “As online and mobile technology is becoming more relevant – as regulations become more burdensome – we’re putting resources where the resources need to be.”

For its part, St. Mary’s has invested in its information technology (IT) infrastructure in order to deliver more convenient financial services. These investments allow it to provide its members with banking services that were not available to its original mill worker members. Some such recent innovation investments include online and mobile banking products, mobile check deposit and person-to-person (P2P) transfer services.

Senus also advised that credit unions should take steps to understand third-party service providers’ offerings, staying up-to-date on the expectations that millennial members and customers have for their FIs. CUs that are invested in millennial expectations will have an edge over their community competition, he said.

“We may not be the first FI to launch some of these [services], because we don’t have a team of programmers like Bank of America or USAA,” Senus noted. “But we can stay closely on top of things they are doing so we can launch and be ahead of a lot of other credit unions and community financial institutions.”

While St. Mary’s is investing in digital technology solutions, the credit union also intends to maintain its physical locations as part of its strategy to appeal to millennial members. After all, a recent survey indicates approximately 80 percent of millennials want to be able to visit a physical branch to conduct their financial business.

“While you need electronic channels, you still need a physical branch to bring millennials in,” Senus said. “They still want to see that branch location relatively close by.”

Staying in Business, More Than a Century Later

The strong preference among millennials to have access to a physical location in which to conduct financial services is a sign that CUs can still be competitive in the financial services landscape, Senus said. Credit unions can find ways to offer their services even as new FinTech players emerge as competitors. Many newer FinTechs lack a physical presence where customers can speak with an employee to address their financial concerns.

“If you ask me, we’re ahead of the Venmos and Square Cash [services] of the world because we’re more relevant,” Senus said. “We’re the trusted advisor with a full range of offerings, plus we have [the services] they have.”

St. Mary’s will continue to “do what we do” as it looks to stay operational, he added. Specifically, that means taking a more conservative approach to lending activities and staying abreast of the latest technology trends.

Even as the nation’s oldest credit union looks to stay current with the newest financial innovations, some things have remained the same. Membership to St. Mary’s is still available for the purchase of a $5 capital stock share.

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To download the November edition of the PYMNTS CREDIT UNION TRACKER™, powered by CO-OP Financial Services, click the button below.

About the Tracker 

The PYMNTS Credit Union Tracker™, powered by CO-OP Financial Services, serves as a bimonthly resource for staying up-to-date on the most significant trends and developments across the credit union market.


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