CEO Shares Perspectives via Newsletter

By Mary Arnold

Yesterday I wrote about several credit union CEOs who blog with members. Their posts share the news of the day; how they see it affecting members and the credit union; and how the credit union can help members meet the challenges of a turbulent economy.

At the end of my post, I expressed some surprise that more CEOs don't blog with members, given the long tradition of "The President's Corner" in credit union newsletters.

Rick Craig, CEO of America First Credit Union, Ogden, Utah, penned an excellent example for the March issue of the CU's Member Line newsletter. Here it is, reprinted with Rick's permission:

Credit unions in America were formed amidst a financial crisis. The final panic of 1907, a time of recession, with stock market values falling 50% and banks failing, set the economic conditions under which the first credit union in the United States was founded. The site was New Hampshire in early 1908. The Federal Credit Union Act, which provided the regulatory authority for America First, was signed by Franklin D. Roosevelt in 1934, during the Great Depression.

In President Roosevelt’s first inaugural, he observed, “Only a foolish optimist can deny the dark realities of the moment.” President Obama noted that he was taking office “amidst gathering clouds and raging storms” of unemployment, decreasing property values, home foreclosures, a plunging stock market and tightened credit. 

We can clearly see the impact of these “raging storms” of recession on our members. Both individuals and families are experiencing increasing difficulties in meeting financial obligations. Unemployment, reduced income, failing business and bankruptcies have impacted our membership and the credit union. When a member doesn’t repay a loan, this increases the amount of money we have to write off as a loss. As we look at the anticipated level of profitability this year, loan writeoffs will be a major factor. We hope the economic stimulus package will both create jobs and increase consumer confidence. Consumer spending makes up 70% of the economy and, without that spending, financial recovery will be difficult.

 

If you have a financial or budgetary concern now or in the future, please call or come into a branch to discuss your situation. Our chief concern as a credit union is your financial well-being. America First is here to help and be of support during these difficult times.

 

Our budget for this year anticipates that things are going to get worse before they get better. In this recessionary environment where people are reducing their spending, increasing savings and paying off debt, America First will tighten its belt as well. We are taking steps to reduce operating costs, postponing projects, not starting any new buildings, etc., until we start to see signs of an economic recovery. We can foresee no current economic circumstance that would require us to close any branches or lay anyone off this year. We will continue to act in your best interest in a safe, sound, and prudent manner.   

However, there could be some strategic opportunities that may arise as a result of the poor economy. We are in an advantageous position, because of our strong capital, to react should favorable circumstances present themselves. It is possible that we can use the downturn to our long-term advantage.

Over the past 69 years, we have set aside money for a day where the economic conditions impact the membership. We have been conservative in our lending practices, reserving for loan losses, and building capital through earnings. Your money is safe! The credit union capital is in excess of 10% and deposits are insured to $250,000 by an agency of the federal government. 

We have been here since 1939 and will be here for your financial services in the future. The best days of the country and the credit union are still ahead of us."

Thank you for sharing, Rick!

Mary Arnold is VP/publications for CUES.