By Ray Birch
LAS VEGAS–A CEO who began his career during one crisis and who managed his credit union through another at the end of his tenure says the one takeaway those events have in common is they underpin what financial cooperatives mean for so many people.
Rick Schmidt, who retired this month as CEO of the $258-million WestStar CU, has a unique perspective on trials that credit unions and their members can experience. He began his CEO career just as the Great Recession had begun and ends it now as the COVID crisis fades.
Schmidt said those difficult times make it clear credit union members will support their cooperative if the CU supports them.
“I started with one crisis and ended with another,” said Schmidt, whose credit union serves what can be a boom or bust field of membership, the gaming industry in Las Vegas. “You stand by your members and they stand by you. They proved that to WestStar from 2008-2010, and then from 2020 through this past year.”
Prioritizing Repayment
The 62-year-old Schmidt told CUToday.info that members have always done their best to pay back the credit union first when faced with economic hardships. He believes they do so because they don’t want to let their credit union down after it stood by them with loan deferrals, extensions, forbearances and just taking special steps aimed at meeting the the unique needs of each person.
“It’s easy for people to love you when times are good, but when times are bad…,” Schmidt noted.
The toughest time for WestStar members and the credit union was early on in the pandemic when the entertainment industry in Las Vegas virtually shut down all jobs, taking unemployment levels in to record-high levels.
‘Most Successful Years’
Rick Schmidt
“When I look at 2019, 2020 and 2021, our financial results are not what I would want them to be in a normal year,” said Schmidt. “But I look back on those years and see them as one of our most successful in our credit union’s history. We did what we were supposed to do for our members. We did everything that we could to keep them in their cars and in their homes, keeping their heads above water, so to speak.”
WestStar provided forbearances on one-third of its mortgage portfolio during the COVID crisis.
“And not one of them went bad,” Schmidt reported. “Even after the moratoriums were lifted, we have done very few repossessions. So, when I look back on those years I truly see them as a great success for WestStar.”
‘Resilience of Our Members’
Schmidt admitted he was uncertain what the future might hold for the credit union when Las Vegas lost all those those jobs.
“When I first came here during the Great Recession unemployment was about 14%,” recalled Schmidt. “But in March 2019 we went from full employment to 30%-plus unemployment overnight. I went to bed that night, the day the shutdown was announced, expecting that we would lose millions and that our loan-loss reserves would not be enough. Instead, we saw the resilience of our members and the Las Vegas community. We did not lose a lot of money, we had a solid year in 2022, and we're looking at having an even better year for ’23.”
An ‘Inflection Point’
Now, as new CEO John Bagents takes over, Schmidt believes the credit union industry is at an “inflection point.”
“There will always be a niche for credit unions. There will always be opportunity for organizations that provide personalized, customized service to their members,” said Schmidt, who said credit unions must embrace digital and yet maintain personalized service as they do so. “But I think when you look at the digital transformation that is happening, and how credit unions are able to respond to it, can small credit unions make the changes necessary to be relevant 10 years from now and beyond? I have two kids in their early twenties and none of them have ever been into a branch of a financial institution, and likely, they never will.”
Now, No Agenda
Schmidt says the biggest reward from retiring is that he will be able to get up every day without facing an agenda.
“It will be nice to just do whatever I want,” said Schmidt, who added that he will likely do some traveling with his wife, Kathryn. “But make no mistake, I will miss the people at WestStar, seeing them every day and just talking about things. I will miss that camaraderie.”