Rivermark’s Scott Burgess: ‘If We Don’t Stand Up for Our Business Model, Who Will?’

Editor’s Note: With 2013 in the rear-view mirror, Anthem asked Northwest credit union presidents and CEOs to reflect on the year that was, consider what lies ahead and talk about the challenges — and the opportunities — that await credit unions in 2014. Look for “The CEO Perspective,” an occasional series of interviews from the corner office, in upcoming Anthems.

Focus. Clarity. Vision.

Those are important traits for a credit union CEO, especially one who has long been determined to lead his financial institution through a transformational shift in its strategic direction. But here’s the interesting thing: It wasn’t someone at Rivermark Community Credit Union who used those words to describe Scott Burgess.

It was the president of the Beaverton Area Chamber of Commerce.

“Scott is respected as a leader,” Lorraine Clarno says. “His communications skills are exceptional. And through his participation, he gets others connected and engaged.”

High praise indeed, but it’s hard to find anyone at Rivermark, in state or local government, or in the credit union movement who would disagree.Burgess’s fingerprints, it seems, are everywhere.

He has held the top post at Rivermark for more than 12 years after serving as the credit union’s vice president of finance. In his 25-year credit union career, he has also been the chief financial officer at Northwest Corporate Credit Union and a financial analyst for Portland Teachers Credit Union (which is now known as OnPoint Community Credit Union).

Burgess was named Oregon’s Credit Union Advocate of the Year in 2007, and he remains an advocate to the core. For the second year in a row, he will serve as co-chair of the Northwest Credit Union Association’s Oregon Governmental Affairs Committee in 2014. He will also chair the NWCUA’s State Issues Working Group this year, and he is in his third term as the state’s representative on the CUNA State Issues Committee.

During his tenure on the Beaverton Area Chamber of Commerce (including stints as treasurer and board chair), Burgess helped form the organization’s first political action committee. He has been a member of the City of Beaverton’s Visioning Taskforce and the board chair of the Oregon/Southwest Washington Chapter of the Juvenile Diabetes Research Foundation. In May 2012, he was appointed by Gov. John Kitzhaber to the Oregon Growth Board, where he advocates for Oregon businesses and the creation of quality jobs for Oregonians.

Over the past few years, Burgess has concentrated on consolidating Rivermark’s branch network and reallocating its resources to create a sharp focus on access and convenience. He recently shared his vision of the future with Anthem for “The CEO Perspective.”

Q: As 2013 drew to a close, major data breaches at Target and at Spokane-area grocery stores once again impacted credit unions and their members. In fact, there were more than 1,000 data breaches across the U.S. in 2013. These breaches affect retailers’ reputations, to be sure, but they also have a huge impact on financial institutions’ bottom lines. What kinds of fixes – technological and/or legislative – would you like to see in 2014?

A: These breaches also have a reputational impact on card issuers, including credit unions. We are the ones that have to deliver the bad news to the impacted members, and they view this inconvenience as something caused by the issuer (because they don’t understand the details behind the card dynamics; they only care that their card works). Retailers like Target and their processors need to be held more responsible for data breaches, and should be held financially responsible for making card issuers whole.

Q: Tax reform – and the need to protect credit unions’ tax status – will continue to loom large in 2014. How do you see the battle shaping up in the coming year, and what role will you and Rivermark play in that fight?

A: Credit unions need to be vigilant about keeping up the messaging to our lawmakers on Capitol Hill and in Salem. While it may at times seem like credit unions are in the clear on this issue, if we let our guard down, we’ll be in trouble. Lawmakers don’t understand the reasons for our corporate income tax exemption like credit union professionals do, so we need to keep hammering home the reasons we deserve our exemption. Plus, lawmakers come and go, and there are always freshman legislators that need to be educated on the credit union difference. If we don’t stand up and advocate for our business model, who will? Regardless of the industry you’re in, you must be active in protecting it from outside interests.

Q: Without a doubt, 2013 may have been one of the most challenging years ever for dealing with new compliance requirements. Mortgage-rule changes, in particular, could have an immediate impact on the real estate market and credit unions’ role in it. What worries you most about these changes/challenges, and how are you responding to them?

A: Compliance burdens are reaching such a level that it’s beginning to stifle innovation in our industry. In a society where consumer behaviors are changing so rapidly, it’s becoming more and more challenging to meet these new consumer demands while also staying compliant with new regulations that originated as a result of the behavior of too-big-to-fail institutions. In short, misguided and unnecessary regulations are ultimately taking away our ability to serve our members in the way members expect. Congress and regulatory authorities have shown an inability to selectively identify those that caused the problems, and have instead rolled all financial institutions into a suffocating regulatory environment.

Q: Asset growth, loan growth, ROAA, membership – the trends were all positive for Northwest credit unions in 2013. From an economic standpoint, do you expect to see positive trends continuing in 2014? What areas worry you most?

A: In 2013, several dynamics worked in favor of stronger earnings. I believe some of those issues will subside, leading to moderated earnings relative to 2013. For example, in 2013, most credit unions experienced relief on their provision for loan losses. Many credit unions’ allowance accounts are now adequately provisioned, and future provisioning may stabilize to keep up with charge-off activity.

The mortgage lending environment was conducive to strong earnings in 2013. There are some indicators that mortgage lending activity may moderate somewhat in 2014. I believe that, even though some of the factors driving financial successes in 2013 will subside, the earnings environment will still be reasonable in 2014 (if not at 2013 levels). If rates rise materially in the coming months, all of our industry will be challenged to maintain a reasonable net interest margin while retaining healthy liquidity levels.

That balancing act between retaining a strong deposit base and managing a healthy margin will become more acute when rates rise and members begin to seek out higher-yielding alternatives for their previously parked funds.

Q: Credit unions continued in 2013 to have a major impact on the communities they serve, from fundraising to financial literacy and more. Which programs at your credit union are you most proud of, and what are some of the things you have planned for 2014?

A: We’re always proud of our contributions to Doernbecher Children’s Hospital, through our Dough for Doernbecher campaign and our Dogs for Doernbecher. In 2013, we began a relationship with Financial Beginnings, and several of our employees will soon be undergoing training in order to go out into local schools and teach the fundamental concepts supporting long-term financial literacy.

Up Next: Nick Hodson and Amy Nelson, co-CEOs of Point West Credit Union

 

Questions? Contact Gary Stein: 503.350.2216, gstein@nwcua.org.

 

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