Writer: Max Crampton-Thomas
2 min read April 2021 — Mike Tomko, president & CEO of BrightStar Credit Union, is in the business of looking out for people. When the COVID-19 pandemic took a toll on many, Tomko positioned BrightStar Credit Union as a valuable resource for those who needed it. Through personal attention to detail and human touch, Mike Tomko worked to meet each customer on his or her level.
What are the advantages to joining a credit union instead of a bank?
We pride ourselves in trying to be the lowest in fees and rates. Credit scores under 6.50 are usually rejected at a bank, but in a credit union, almost everyone is ranked under 6.50. I’ve come to realize that the difference is that we typically lend money to people who may not have stellar credit records. They don’t make a ton of money, but they need cars, credit cards and personal loans. We make all of these products and services affordable to them. That’s a fundamental distinction between banks and credit unions. Banks tend to chase their members out and inadvertently send them directly to us.
How did your relationship with your members evolve during the pandemic?
This has been a tough time for our members financially, and we had almost $60 million in loan balances that were under deferred payments because people could not pay. The vast majority of those deferrals have expired, and people are paying again. Many people got the deferment and never stopped paying; they took it as a safety net if the situation were to worsen. We are very happy about that. All other financial institutions have a collections department; we call ours the Member Resolution Center because it is not really about collecting. The two things that people need during COVID are advice and empathy. They need to hear what they should be doing from financial experts. We’re very fortunate that we have established a good relationship with our members, because they take our calls even if they have not paid their debts. They know we’re asking them how they are doing and whether we can help them in any way. We sometimes extend more money in lending because we are sympathetic towards each unique situation. It’s our responsibility to help them financially, not just to sit back and demand payment.
Credit Unions’ business models are not-for-profit, and that is a huge difference from big banks. Anyone who works at a big bank will tell you it is all about the numbers since there are shareholders that need to be kept happy. In a not-for-profit world, we still need to cover our expenses, but we do not have any shareholders that need to be pleased. While we have to make money at the end of the year, it’s not the same pressure that the numbers drive.
How has your advising changed in the transition to a post-COVID landscape?
People got exasperated about the situation. If they could not pay, they stopped contacting their lender, which only made things worse. We talked to people and told them to speak with their creditors if they owed money because going dark would negatively affect their credit. Almost everyone in our industry has been very open to skipping payments, making deferments and working with their customers to avoid negatively affecting their credit.
How critical is financial literacy?
It’s scary how people are not up to speed in terms of financial literacy. People are sometimes naïve and don’t do the level of due diligence that they should. We partner with a company called Balance Financial and if one of our members is having a hard time with money, we provide the 800 number to help them receive the advice they need. We pay for this service on behalf of our members so it is completely free for them to utilize. We also find that financial literacy in schools is critical. We spend time and effort educating people at all levels on how to be financially savvy.
What role will credit unions play in Greater Fort Lauderdale during the COVID-19 recovery?
There is a need for us; we’re a major balancing force. If bank fees go up, everyone will jump up. The only ones who will not, will be the credit unions. Years ago, Bank of America decided to charge users to have a debit card. People were upset, so our memberships grew to an all-time- high because we were the only alternative. We’re the outlet that makes banking fair and reasonable, providing all the technology, services and products that banks provide. We’re a major competitor and we keep banks in check.
What are your priorities for the near term
Not everyone was fortunate enough to maintain a good credit score during this pandemic. People will come back, and they will need different services. If their credit score was hurt, banks will not want to talk to them, and that is what we are here for. We take more risks because we believe in the inherent goodness of people.
We are again one of the Best Places to Work, for the second year in a row, and that is an important focus of ours because we realize we’re only as great as our employees. Training is essential, that’s why our training department is going above and beyond standard practices. We’ve completely redesigned our program and present it in a fun, engaging and most importantly, effective way.
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