SEATTLE-Members of five small credit unions recently combined into one and named their new credit union Puget Sound CU.
The name was selected from five that also included: United Seattle CU, The Center CU, Blue Pacific CU and Rewards CU.
The new $35-million credit union is the lone survivor of what was once 20 small credit unions founded by Charles Vogel, a one-time examiner for both the federal and state regulators. The 20 credit unions are believed to be the most ever run by a single manager.
"It was personally difficult-he had died in the 1970's-and it was his vision," said the manager of the five last credit unions, Wendy Vogel Larson, of her father's unusual business, the Seattle CU Center.
Larson, 55, grew up at her father's hip helping to run the family business; following her dad around to the post office; to the bank to deposit credit union funds to board meetings.
Charles Vogel, a former examiner with the Bureau of Federal Credit Unions, the forerunner of NCUA, and the state of Washington Bureau of Financial Institutions, opened the Credit Union Center in 1959. When he died, his wife Diana Vogel, took over the business and the operations of the credit unions. "At one point, my mother was going to 20 board meetings a month," said Larson of 80-year-old Diana Vogel. "She told me, 'you only have five.'"
The remaining five credit unions have been run by Wendy for the past five years. Her husband works for one of the credit unions, as did her two kids (one is leaving to move to Olympia). "This was a family business," said Larson.
The five remaining credit unions: Eastside CU, Pacific CU, Westside CU, Eastside Municipal Employees CU and Financial Services CU, were all small, ranging in assets from $3 million to as much as $12 million. Each of the five reported a loss for 2008, with the combined loss $950,888.
"They were too small to have an economy of scale," said Larson, who added the regulatory compliance, data processing and other costs made the continuation of the five separate credit unions untenable. "I know that $35 million is still small but it is a different game," she said.
Asked if she considered converting to a bank, like several other area credit unions have pursued, she said, "that's a four-letter word to us."
Because she has managed the credit unions, the combination of the credit unions' books should not be a major undertaking. "Frankly, the credit unions didn't even own a paper clip," said Larson, explaining that all of the back-office functions were conducted through the Seattle CU Center.
But it does require a change in checking account statements and all other paperwork. "I'm just basically rebuilding the credit union at this point," said Larson. "Literally, from scratch."
The combined board was restructured to include one representative from each of the merging credit unions. Larson expects to expand it to seven members in the future.
Plans call for the offices to remain the same, a half-mile on the city's east side, near Safeco Field. Though the credit unions serve dozens of select employee groups, it actually has an open field of membership, allowed under state law.
