Bruce Brumfield, CEO, Founders Federal Credit Union

Bruce Brumfield, CEO of Founders Federal Credit Union, spoke with Invest: about contributing to the economic development of Lancaster County. He also discussed the challenges of cybersecurity, fraud, and how to grow the credit union both organically and through mergers.

In the last 12 months, what highlights and achievements stand out for Founders Federal Credit Union?

We’re passionate about not only our credit union and credit union industry, but also the markets that we serve. We continue to experience healthy earnings, despite a downturn in the economy, higher interest rates, and lower loan demand. We have built multiple partnerships in the last five years and we’ve become even stronger with the educational institutions in our footprint. We invest money in financial literacy for our members, from elementary through middle and high school. We have partnered with local higher education institutions such as Clemson University, University of South Carolina, Newberry College, Presbyterian College, and Winthrop University. 

What role does Founders play in supporting local businesses and contributing to Lancaster’s overall economic development?

Originally, we were formed as a credit union that served the Springs Cotton Mill employees. Through the early 1990s, 90% of our business was in York, Chester, and Lancaster counties. We have since continued to grow and expand our footprint. We want to meet our members where they are. If they want to use technology to do their transactions, we want to make sure we have the very best options for them. But if they want to come into a physical location, we like that. We think that’s the way you form relationships. We also believe in helping nonprofits. We give each employee one day a year to go out and work with nonprofits. We encourage our people to be involved with their communities, to help make our communities stronger, a place people will want to come and live. We’re also involved in our local school systems, helping them with resources they need and providing volunteers. 

We are a more consumer-based credit union. As a credit union, our rules and regulations are somewhat different from commercial banks. If you’re a trucker, and you need a truck, we’ll loan you money to buy a truck. If you’re a manufacturer and you need a line of credit for inventory, we stay away from that. We think the commercial banking sector is more suited to provide that purpose. We’ve tried to build out a better model for the mom and pops that need that service without getting into an arena that we don’t play well in. 

What do you make of the growth that has taken place in Lancaster County over the last few years? 

When I first moved to Lancaster in January 1988, if you took 521 and rode north to Pineville, there was only one red light, maybe two. Now, it’s becoming Independence Boulevard. There has been so much growth in that area. We’re starting to see some of that go south of Route 5, with new developments, and we’re positioned to continue that growth. As we fill out that northern end of Lancaster County, that growth will continue to move toward Lancaster proper. We think the future is very very bright, which is why we placed our headquarters in Lancaster.

What are some of the challenges associated with keeping your members safe from fraud and scams?

If that isn’t the No. 1 challenge and the thing that keeps us awake at night, it’s 1a or 1b. The people who operate in those shadows are so incredibly resourceful. What we’re finding now is, throughout our industry, it’s not a credit union problem or a banking problem, it’s a systemic problem across all financial institutions. We have about 75 attacks every hour, 24 hours a day. Not only do we have a dedicated staff working on cybersecurity, but we also partner with several vendors that provide additional layers of security. 

The long running theme of consolidation in the banking industry is multifaceted. How much of it is related to the investment of resources into cybersecurity and fraud?

Smaller institutions do not have the resources, both monetary and staffing, to keep up with the demands of cybersecurity, technology, and compliance. Compliance has changed so much. The rules are constantly changing, and we need to keep up with them. Along with the economies of scale, that’s why you’re seeing the consolidation. If a smaller institution doesn’t have the resources to keep up with compliance, they may find themselves in legal trouble. 

What is your growth strategy for the next three to five years?

We’re approaching $5 billion in assets. As a financial institution, when you get to $10 billion, the regulatory framework changes. I think it’s going to be a combination of organic growth and mergers with other financial institutions. Historically, we’ve grown about an average of 8% a year organically. There will also be opportunities to merge with other credit unions. We have not been too aggressive in the merger market. If merging is beneficial to both memberships and to our employees, then let’s do it. Those mergers will play a part in our growth, but we still believe that there needs to be a plan for organic growth, and to expand our footprint in a prudent, responsible, and profitable manner. 

What challenges does Lancaster County face?

We’re bullish on Lancaster County, but there are still challenges here. How can we work together and improve the county that we live in? So many of the businesses in the north end have relocated from Charlotte. There are great incentives, but a lot of those people still live in Charlotte, their kids go to school in Charlotte. We need to find a way to get them involved in making our community better. I believe a good school system is your No. 1 driver to bringing young families into your community.  We need to make our schools better. I’m reading a book now called “Charter School City,” by Douglas N. Harris. Harris is an economist from Tulane who did a study on the New Orleans public school system after Hurricane Katrina. After Katrina, the state took the schools over and turned New Orleans into a charter school district. While not perfect, what they did with test scores and success rates of kids going to college, it’s off the chart. I’m not saying that’s the answer, but we need to look at these things that are done differently and see if we can mold them into what we are doing.

For more information, please visit:

https://www.foundersfcu.com/