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Robert Cashman
President and CEO, Metro Credit Union
Age: 62 years old
Years experience: 40 years
Robert Cashman has been in the financial services industry for 40 years, and spent the whole time being faithful to his service at Metro Credit Union. Like his father, who also worked and served in many leadership positions for Chelsea-based Metro, he grew up in the credit union his grandfather founded in 1926, learning the ropes of helping people and putting communities before profits. Joining Metro in 1983, Cashman led multiple departments such as marketing and lending before becoming executive vice president in 1995. Since becoming Metro’s CEO in 1998, he’s grown the credit union from $316 million in assets to $3.4 billion, and 19 branches in Massachusetts.
Q: Since you’ve been with Metro Credit Union for 40 years, did it cross your mind to go with other credit unions or banks? What is it about credit union that made you stay compared to banks?
A: Within those 40 years, yes, it crossed my mind. I wanted to stay within the credit union culture for what they do for its members and for the community. As I looked around [the industry], I think I can make a difference here. There are two adages that are very well known in the credit union industry. One is “not for profit, not for charity, but for service,” and the other one is “people helping people.” We’re always looking to pay it forward, give back, help out individuals.
Banking is a commodity. It’s all about the member experience – what you’re able to do for somebody and how you treat them. I’m working with people that are third-generation here at Metro Credit Union, and there are people that have had their family members and friends. We saw what was taking place here in Chelsea, at the time was a melting pot. We made it a point to establish branches around the state, many of them are in low-income designated areas with a big need so we can help out. We now have 19 locations spread out in the state.
Q: How is the credit union doing attracting deposits since last year’s bank failures?
A: This past year, there’s been a great focus on deposit-gathering. Everybody has been focused on deposits because of what took place, liquidity wise, with SVB [Silicon Valley Bank], the higher interest rate environment and the inverted yield curve. All of those things have really had an impact on all financial institutions. Focusing on deposits, we were very fortunate last year. In 2023, we were able to grow our deposit base by over $200 million, and part of that was because people realized the safety and security of being with Metro Credit Union, being local and accessible.
Credit unions have NCUA [federal] deposit insurance that’s limited to $250,000, but Metro Credit Union was fortunate that we’ve always had the Massachusetts Share Insurance Corp. (MISC) for excess deposits above $250,000. During a time when financial institutions were failing last year and people were concerned about what was going to happen, there was a flight to safety and they looked to Metro. They know they can speak to somebody and they can make a deposit and that they’re insured.
Q: Metro has been providing one of the higher CDs rates out there, but how were you able to do this even with margin compression?
A: We do realize that offering higher rates can create a more squeeze on the margin and could impact net income. But it’s not always about the level of net income or profit. It’s making sure that we’re serving the community and the members, and if we can do that, that’s really important. There are many individuals that are retired, living and relying on the interest they got from the deposits to really carry them through. By Metro offering a very competitive interest rate, it gives people an opportunity to maybe be better off financially. We recognize that it means that we may take a little bit less in terms of debt income because we have a higher deposit cost and funding cost. But at the same time, we want to make sure that we’re doing we can to take care of our community.
Q: What kept Metro Credit Union going during the last, challenging year for home lending?
A: Last year was a difficult year, and this year, we’ll continue to have a somewhat difficult [environment] for residential lending, primarily due to high interest rates which have taken people out of the market. Now, you both have high interest rates and prices, which is unusual. This makes it really difficult for anyone to get into the [housing] market. Second, when the refinancing boom took place, people got mortgages at 2 to 3 percent, but now mortgages are more than double that, so it is harder for people to be able to afford homes. Due to higher interest rates, [monthly mortgage] payments could be much higher now that’s also why some people are not moving from their current properties. They may have to give up a low rate of interest if they go someplace new, even if they could afford the high price of the property.
We saw this and we thought, “What can we do to help out the people and the community?” So, we created a 40-year mortgage product that allows people to spread out payments. I can’t fix the mortgage rate because of the rate environment, and I can’t fix the principal because of the price of the house. But we can help out on spreading and lowering borrowers’ monthly payments, so it’s been a product that has had some interest, and we look forward to continuing to offer that as time goes on.
Q: How was the take-up when you launched that 40-year mortgage product?
A: We launched it the last year or two. It’s a great product and we built other attributes into it that you can get into that product for as little as 5 percent down payment because of the private insurance company that we partnered with. This is not for somebody that wants to buy a home in Nantucket, a $10 million mansion, or anything like that. We want people that are first-time home buyers and people that want to stay in their home.
We are still in a high interest rate environment and that could be somewhat problematic, but the challenge is that this is the type of product that has to remain in the portfolio. We have many loans that we typically originate can be sold to Fannie Mae, Freddie Mac and the Federal Home Loan Bank, but 40-year mortgages aren’t one of those products that they will buy. This sort of puts us institutions in a difficult position to add all these loans into our portfolio. So the timing right now has been problematic, but I think the bigger issue is that we really need to get the agencies to be able to want to buy these loans.
Housing is top of mind for everybody. You see in papers all the housing initiatives. How can we establish housing? What can we do? Part of that is inventory-based, but there’s a huge affordability piece, too. We think that Metro stepping up with this type of product, which allows homebuyers to have a low down payment and the ability to spread the payment out, and we think this is going to be somewhat helpful.
Cashman’s Five Favorite Activities
- Spending time with family
- Connecting with friends
- Community involvement
- Watching sports
- Playing pickleball
