OBSERVATIONS: An institution that deserves our respect (02/05/06)

OBSERVATIONS: An institution that deserves our respect

by Walter Prochorenko

Courtesy, confidentiality and efficiency. These are the service mandates of one of our best known and respected Ukrainian institutions: Self Reliance New York Federal Credit Union. Couple this mandate with the three tenets of the business philosophy that this financial institution espouses - establishing a good customer base, maintaining a high capital ratio and providing loans to help in the development of the community - and you can see the reason for Self Reliance New York's tremendous success.

In recent reports by the National Credit Union Administration (NCUA), which encompass 9,300 credit unions in the United States, Self Reliance in New York ranked fourth in average share balance, fifth in average loans, ninth in net worth, 16th in lowest expenses, and 25th in returns on assets. This is quite an accomplishment considering that these criteria were measured against some federal credit union powerhouses such as those of the U.S. Navy, the Pentagon, all of the various 50 States employees', etc. The Navy credit union alone has over $25 billion in assets, and there are now over 100 Credit Unions with over $1 billion in assets. Thus to beat out such "big boys" in these rankings should make us very proud. No wonder the national banks are becoming very nervous and want to change the rules and regulations that govern federal credit unions.

Recent success of Self Reliance New York can be attributed to the affable and dedicated president of this institution who has been on the board of directors since 1973, and its CEO since 1992: Bohdan J. Kekish. Dr. Kekish is a former economist for Moody's Averages and a former investment banker with Hornblower, Weeks Hemphill and Noyes Inc.

Dr. Kekish expresses great pride and satisfaction not in himself or in his own achievements, but in how much this credit union has meant to the Ukrainian community; how much this establishment has given to various educational, artistic and community causes; and how democratic the entire institution remains.

Started in 1951 with $350 in deposits, Self Reliance New York now has well over $500 million in assets and hopes to attain the $1 billion mark very shortly. That's quite an accomplishment for an institution that only requires a $50 membership fee and a minimal deposit in order that the members can enjoy some of the very best interest rates on their money, lower than average mortgage and loan rates, and friendly personal services from a well-trained staff. Dr. Kekish also proudly points out that any member regardless of how much he or she has with the credit union has the same single vote as any other member, even though their deposits can differ by millions of dollars. This is democracy at its best.

Completing this democratic formula is the credit union's board of directors, which meets monthly and which provides an interactive source of ideas while also acting as an important sounding board for innovative services and processes. Dr. Kekish speaks of his board members as his associates and proudly refers to their collective achievement. The board's importance and their own individual and collective accomplishments also must not be underestimated.

As for community relations, very few institutions or individuals give back as much to the community as does this New York credit union. Last year alone, Self Reliance, directly or through its newly formed NY Self Reliance Foundation Ltd., gave over $1 million for community projects. This consisted of donations of $250,000 to Columbia University's Ukrainian studies program, some $500,000 to The Ukrainian Museum (part of an overall $1 million donated so far), $50,000 to the Ukrainian Free University, $1,000 for every year of the 100 years that St. George's Church has been in existence, and various amounts to miscellaneous schools, museums, concerts, choirs, dance and drama groups, seminaries, etc. Therefore, it is no wonder that Self Reliance has only a 0.01 percent default rate on its loans. Who would want to do damage to an institution that does so much for so many.

According to Dr. Kekish, what better dividend could the community expect than the staging of "Lisova Pisnia" by Lidia Krushelnytsky's Ukrainian Stage Ensemble which they supported? And yet, the credit union still paid over $11 million in dividends in the year 2005 and enjoyed over $8 million in net earnings. This will certainly ensure its stability and its continuing service to the community. It is no wonder then that Dr. Kekish and Self Reliance New York has obtained direct praise from President Viktor Yushchenko himself, as well as from Ukraine's Ministry of Foreign Affairs, and numerous other U.S. and Ukrainian institutions over the years.

Self Reliance NY FCU maintains three branches: Kerhonkson, N.Y.; Uniondale, Long Island; and Astoria, Queens. When asked about the growth potential and particularly about the Fourth Wave of Ukrainian immigrants becoming future members, depositors and clients, Dr. Kekish replied that this is one of his priorities.

At present, this group still has certain issues with which its members must contend. They have a fear of depositing their monies in U.S. banks in general and Ukrainian credit unions in particular due to an inherent concern with secrecy issues. Many Fourth Wave immigrants are still "illegals" and they use banks and private companies only to send their very hard earned money back to Ukraine. The overall amount thus transferred is hard to calculate, but the figures run into the tens, if not hundreds, of millions of dollars.

Another problem that has been observed, but never studied in depth, is the fact that many of the legal Fourth Wavers tend to spend their money rather than save it. This mirrors a tendency observed among other immigrants from the former USSR. A study of this phenomenon, or rather this tendency, would certainly make for interesting reading as it would help us to understand why the various waves of Ukrainian immigration differ so much from each other.

The only note of disappointment that this writer encountered in this otherwise enthusiastic and informative interview was the underlying fact that many Ukrainians still do not treat bankers, sales professionals, and businesspeople in general with the same respect and deference as they do doctors, lawyers, writers, painters, etc. This is regardless of how much the former groups do for the communities. My own studies have shown that this is a trait rather specific to Ukrainians and dates back as far as the 15th and 16th centuries. While Ukrainians were great traders and bankers during the formative years of the Kyivan Rus' empire during the 10th to 13th centuries, somehow it became unfashionable to deal with money and money matters in later years.

Perhaps institutions like Self Reliance New York Federal Credit Union, and all they are doing for our society, will change this perception.

Dr. Walter Prochorenko is director of publications at the Ukrainian National Association. He holds a Ph.D. in international business and wrote his dissertation on the economic and political situation of Ukraine since independence.

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