Where Credit's Due

There's power in numbers for John Benoit at NorthCountry Federal Credit Union in South Burlington

by Craig Bailey

President and CEO John Benoit appreciates the convenience of drive-through access and ATMs at NorthCountry Federal Credit Union as much as anyone. "I do very little of my banking downstairs," he admits. The 53-year-old Barre native is referring to the teller windows practically within shouting distance of his second floor office in South Burlington. "I leave here and I have no cash on me," he laughs. "I have to drive around and go to our ATM!"

John Benoit focuses on members' needs at NorthCountry Federal Credit Union in South Burlington. Despite Internet, voice-response and ATM access, a recent survey showed members want more branch offices.

Throughout his nearly 20-year tenure Benoit has worked to insure NorthCountry offers the services and access its members want. ATMs, telephone voice-response systems and Internet banking --all offered by NorthCountry -- come with costs. To make sure the company can afford these modern technologies, Benoit's focus is on growing membership and assets, which allow the credit union to keep up with the times.

Keeping members happy is more than just good business: It's NorthCountry's raison d'etre. "Credit unions are owned by members," Benoit explains. "Banks are owned by shareholders and are required to show a profit to the stockholders." Credit unions, by comparison, pay the equivalent of dividends to their members in the form of higher interest rates on saving and checking accounts, and lower loan rates. "Each member has a voting right," explains Benoit.

A seven-member volunteer board of directors, led by chairman Dale Hodge, helps plan the company's strategy. Benoit says some credit unions are content "to remain more 'vanilla,' if you will. Members will then use other institutions to meet their banking needs. We'd like to be the primary financial institution for our members. Knowing that, we need to continue to grow."

The language of credit unions reinforces the shareholder/member concept. "Officially we pay dividends," Benoit offers. "We don't pay interest." Savings accounts are technically called share accounts: When members deposit into the account, they are, in effect, purchasing shares in the company. Checking accounts are called share draft accounts.

Semantics aside, NorthCountry and all credit unions operate similarly to banks -- by reinvesting assets to generate income. The biggest difference: Credit unions are non-profit organizations that aren't required to pay federal or state corporate income tax. Consequently, relations among bank people and credit union people have occasionally been rocky -- especially as organizations like NorthCountry have expanded their membership territories.

In the late 1990s the American Bankers Association (ABA) filed suit against the National Credit Union Administration (NCUA). "Credit unions are not open to the general public. Instead, they serve groups of people as allowed by their bylaws," Benoit explains. "While the NCUA's interpretation of the Federal Credit Union Act allowed federal credit unions to serve members from multiple groups, the ABA argued that each credit union could legally serve only one group." The issue went to the Supreme Court and then to Congress, which amended the credit union act to favor credit unions.

Nonetheless, Benoit says, "In Vermont I think credit unions in general have a very good working relationship with banks. We understand each others' territories." He adds NorthCountry recently "joined a network of ATMs that includes 24 credit unions in Vermont and five banks" -- an example of increasing cooperation among players in the financial services sector. It all comes down to serving members: "It's a matter of what works for us," Benoit says. "We all understood we couldn't offer this ATM access network individually."

While the ABA suit slowed NorthCountry's growth considerably for more than a year -- "It really was a threat to the industry," Benoit believes -- the credit union is back on track. Since its inception in 1950, NorthCountry has grown to be the fifth largest credit union in the state. Nearly 40 employees in four branches in three counties serve approximately 13,000 members. Like all credit unions, NorthCountry serves individuals and families, not corporate accounts. Assets stand at $55 million, growing more than 43 percent from 1995 to '99. The majority of the company's income, 71 to 73 percent, is generated by loan interest.

Many credit union professionals would like to see changes in laws restricting who can join credit unions; the banking industry is resistant. From left: Theresa Olio, Julie Heffernan and Julie Allen.

Benoit grew up in Barre, one of seven children in a family that owned a granite sandblasting business. (Two of his brothers continue to work in the Barre granite industry; Adelard Benoit owns Culture Craft Sandblast Co.) "Growing up I worked a little bit in the sheds," Benoit recalls. "It's a great area; it's a great industry -- but it's not something I wanted to do."

In 1966 he graduated from Marian High School, a private Catholic school in Barre that has since closed, and attended Champlain College in Burlington. "I really didn't know what I wanted to do. I just thought I should go to college. It wasn't a good mix," he offers. "From there I went down to Connecticut and worked at a silver factory" that manufactured plates, tea sets and the like.

When a year and a half at International Silver Co. in Meriden, Conn., started to feel like his time spent in the quarries, Benoit made a move into financial services. Bill Daniels, a friend of Benoit's and then Barre branch manager of Beneficial Finance, set him up as an assistant manager of the company's Lebanon, N.H., office. "Loans and collections," Benoit says to describe the business. "Collections probably took up a little more time than loans," he adds with a sly smile.

Over the next six years, when promotions brought him to St. Johnsbury, Barre and Burlington, Benoit found himself managing the largest Vermont office for Beneficial Finance in 1975. Another promotion would have meant leaving the Green Mountains. "My wife and I had started a family, loved the Burlington area, loved Chittenden County," Benoit explains. "We weren't prepared to make another move." In January 1982, he became a loan supervisor at the G.E. (Burlington) Employees' Federal Credit Union, the predecessor of NorthCountry, located on Lakeside Avenue where General Dynamics is today.

It's easy to contrast the credit union then and now. When Benoit joined, assets were $6 million and the company served only employees of G.E. and their families from a single office within the plant. "You couldn't even show up during the day without an escort to get into the credit union," Benoit remembers. "If you didn't work there, you didn't have access."

By the late '80s G.E. began to feel the pinch of defense cutbacks. "We saw the need to expand, so we went out and started taking in new employee groups," Benoit says. In 1989, the company opened a second branch at 1000 Shelburne Road to improve access.

To be members, residents in Chittenden County need to be employees or relatives of employees of businesses that offer NorthCountry membership as a benefit. The arrangement is called a "business field of membership" in credit union parlance.

In the '90s, NorthCountry made an acquisition that expanded its membership to include a community field of membership, where any resident within a specific geographic area can join. In December 1990 it created a third branch when it bought the Adamant Credit Union and moved it to East Montpelier: It serves residents of Washington and Lamoille counties. In 1992 it acquired the Northeast Credit Union in Lyndonville, providing NorthCountry a business field of membership in Caledonia County. The credit union serves 100 employee groups in Chittenden County and 50 in Caledonia.

Deborah Kehoe recalls the level of service NorthCountry brought to Lyndonville. Kehoe is a principal of Kehoe + Kehoe Design Associates in Burlington, which handles the credit union's graphic design and brand identity. She says an early campaign following the Lyndonville acquisition used the tagline, "We've got cash.' Apparently ... (Northeast) Credit Union just took deposits, and they never had cash," she explains. "(NorthCountry) was a huge benefit to the community in Lyndonville," Kehoe says, crediting Benoit for much of the company's brawn. "He's really built them into who they are today -- a credit union that a lot of other credit unions look up to."

When the board realized it had outgrown its G.E. moniker, Kehoe played a role in finding a new name. "We opened up a competition and accepted names from members," she explains. The G.E. credit union became NorthCountry in 1993; the following year Benoit became president/CEO.

John Benoit partly credits the company's new headquarters with a more than 20 percent jump in assets since the move in 1998. "Image is very important," he says.

This particular credit union has a lot of services that other credit unions don't -- that even some banks don't," says David Gadway, senior manager of the technology consulting group at Gallagher, Flynn & Co. PLC in Burlington. A former board member of NorthCountry, he's been a member for approximately a decade and provides consulting services to the company. The member-owned aspect of the credit union and variety of ways to access his accounts are what attracted him.

Radisson Hotel Burlington has offered membership at NorthCountry as an employee benefit since the mid-1980s. "Being in the service industry, you always strive for working with businesses that have that same service ethic as you do," says human resources director Gail Campagna, a former NorthCountry board member. "The credit union had that to offer.

"They really are there to cater to individuals. When I walk in the door and I have a small loan or a small transaction I want to make, I'm their big customer," she adds. "I like that."

Benoit might be most proud of the Internet banking products NorthCountry offers. "It was just five years ago that we were just starting to open an AOL account so we could get email," he marvels. Today his laptop computer is the first thing Benoit unpacks when he's on the road. Since November, NorthCountry members can view their accounts and statements, transfer funds among accounts, make loan payments and pay bills through the credit union website.

Campagna says Benoit is "a great person to communicate with -- very honest and above-board -- a very sincere person."

Gadway gives the president high marks for creativity: "He's always pushing the envelope. He's always looking for what's next -- what's good for the customers."

Benoit is pleased with NorthCountry's timing in offering online services, but realizes it's only a matter of time before his competitors catch up. "Almost any product or company is only unique for a very few minutes," he says, "because if it's successful, everybody jumps on board."

In May 1998, NorthCountry responded to members' requests for easier access by moving its headquarters to a new four-story building on Swift Street. The credit union worked with developer Wright & Morrissey Inc. for nearly a year to find a location that would allow a drive-up window.

Towering white pillars and a large NorthCountry sign create a striking impression -- one Benoit partly credits with a more than 20 percent jump in assets since the move. "Image is very important," he says. "We're probably having our best year this year." Inside, large windows exaggerate open spaces making for a modern, airy feel. The credit union owns the first two floors of the building; Salomon Smith Barney and other tenants reside on the top two.

Benoit says he spends a considerable amount of time out of the office -- among meetings and other obligations such as serving on the board of directors for the Vermont Credit Union League. "I still try to attend a lot of educational sessions," he adds. On the job by 8 a.m. and often out the door by 6 p.m. -- he jokingly declines to call them "banker's" hours -- affords Benoit plenty of family time. He and his wife, Barbara, whom he met in high school and married 32 years ago, have three grown children and two grand-daughters.

"My family is first," Benoit says, but he makes time for reading, golf and other sports, admitting he's more of a spectator these days than an athlete. A planned move from his Burlington home into a Dorset Farms townhouse in South Burlington will allow more time during the warm months to hit the links in lieu of mowing the lawn; eventually the couple might spend winters in a warmer clime like Arizona, where two of their children live.

NorthCountry strives to be members' full-service financial institution. Services include savings, checking, mortgage, auto and home equity loans, and Visa cards. Pictured: Bill Smith and Lisa Huyer.

Benoit plans on staying on the job for at least another decade. The changes he's been a part of over 18 years at NorthCountry have "been a lot of fun. ... We have the opportunity to really help out members. There are a lot of loans when you're putting a member into a first home, teaching a young adult about credit, or getting them into their first car," he says. "That's very rewarding.

"When you compare our industry to banking, we're very small," he says. "We have a lot of opportunity for growth." Benoit says NorthCountry routinely sees jumps in membership as banks are swallowed up in the current culture of acquisitions. He theorizes, however, that credit unions will follow the same pattern. He predicts more members and more assets for credit unions in the future, "and yet fewer credit unions. I think that we'll probably go through the same thing that the banking industry has. Much different scale. There are a lot of $1 million asset credit unions that just can't deliver the service."

Benoit will be working to make sure NorthCountry can.