Staff Photo by Tim Barber/Chattanooga Times Free Press Southern Advertising employee Chris Walker moves a new directional sign into place Thursday for drive-through customers at the new Highway 58 branch of the Tennessee Valley Federal Credit Union. The financial institution is celebrating its 75th anniversary this year.

Blake Strickland learned an important lesson about credit unions 33 years ago when he began working for the Tennessee Valley Federal Credit Union.

Two weeks into his job at what then was known as the Chattanooga TVA Employees Federal Credit Union, Strickland was talking to several employees and referred to the "customers coming in" to the branch office.

"They corrected me very quickly and said, 'They are not customers,'" said Strickland, who has served as president and chief executive since 1999.

"And I learned a very valuable lesson and haven't called them customers since," he said. "We make it a very important part when we talk to our new employees when they come in that these folks are members, they're not customers. They own the place."

In the 75 years since the credit union began with a group of 57 TVA employees who pooled together $500 to charter the organization, a lot has changed.

Membership has grown from 57 to 92,000. Today, the credit union is the largest in Southeast Tennessee with $742 million in assets. Fourteen branches are scattered throughout the region, and anyone living in the credit union's 13-county coverage area can become a member.

The credit union can make consumer and business loans, finance residential mortgages and provide checking and money market accounts - just about anything a bank can do, with few exceptions. Strickland said two of the things credit unions can't do are accept municipal deposits or offer savings bonds.

He said meeting minutes from 1936 kept in the credit union's Market Street headquarters are almost indistinguishable from those today, showing that although rules, regulations and the organization's size have changed over the years, its goals have not.

"This is a volunteer driven organization," he said. "It's about the members driving change and growing it and building it and everything else."

Through the years

President Franklin D. Roosevelt authorized the formation of federally chartered credit unions in 1934, just a year after he created the Tennessee Valley Authority. In 1936, the Chattanooga TVA Employees Federal Credit Union was born under a group of 57 TVA workers with the promise to help their fellow co-workers.

Membership has expanded from salaried employees to their family members, then to trade and labor hourly employees and in 1983 further expanded to include slect employee groups outside TVA. When the credit union received a community charter in 2004, its growth potential expanded to allow anyone in the Chattanooga region to become a member.

Though membership once was limited by a person's place of employment, now anyone living within the geographical region that covers 10 Southeast Tennessee and three North Georgia counties can become a member. The credit union has doubled in asset size since it adopted the community field of membership seven years ago.

Regulatory challenges

Throughout the years the company's biggest hurdle has always been financial regulations, said Louis Wright, chairman of the board and a 14-year board member.

"Sometimes we get grouped in with all the other institutions and the issues that happen with them," he said.

Strickland said in the past two to three years there has been more regulation reform than in his entire time with the company.

David Wilson, executive vice president of the Tennessee Credit Union League, said many federal regulations are "well meaning, but quite often have either unintended bad consequences or unworkable requirements."

For example, the Dodd-Frank regulatory reform law adopted last year regulates interchange fees on institutions with $10 billion or more in assets. Though the new rule doesn't directly change the fees credit unions may charge on transactions, it could change the competitive landscape to hurt smaller institutions, Wilson said.

"If you're a retailer and you take a very large institution's card with a 12 percent [mandated] interchange rate, then a smaller institution has a let's say 15 or 18 [percent interchange rate], then the retailer would say, 'Why would I take that card that I have to pay more on?'" Wilson said. "They would only take cards of the large institutions limited to a smaller fee."

He said regulations such as these can have damaging effects on credit unions' bottom lines and hurt their ability to continue to offer free checking accounts, debit cards and unlimited transactions.

Branching out

Despite the rise in bankruptcies and decline in jobs during the recent Great Recession, Strickland said the Tennessee Valley credit union has continued to grow.

The credit union's 14th branch opened on Highway 58 on Tuesday and there are plans to open one in Ringgold, Ga., within the next two years, said Jimmy Johnston, marketing manager.

"We don't have a branch on every corner, though," he said. "We have to be careful how we spend our members' money."

Johnston said the credit union is cautious with how it spends its members' money so there won't be too much fanfare for the 75th anniversary.

The springtime annual meeting will be held this year at the Tennessee Aquarium, but other than that it'll be a regular year, he said.

"We want to give back to the community because it has done so much for us," Strickland said. "But we're not going to take our members' money and blow it."

Plans for the future don't stop at offering more branch locations, though.

Sarah Sherfey, a TVFCU community relations specialist, said there is a concentrated effort to target younger people through a presence on social networking sites and the company's upcoming Internet-based mobile banking options. She said mobile banking has been in the works for the past year and should be available for members later this year.

"We will be constantly focusing on the possibility [of expanding], but at the same time we have to weigh that against the changing face of financial institutions," Wright said. "The time may come when we're not opening more branches but instead investing in technology."