Airline, CU Seek To Patch Things Up
Both NWA FCU and its sponsor, Northwest Airlines, have indicated that dialogue between the two parties continues, and there is still hope that the airline will not sever from its credit union of 65 years.
But the credit union continues to look for alternative locations to replace those sites currently on Northwest property (CU Journal, May 5).
"It's our hope that we can still resolve this," said NWA FCU VP-Marketing John Wagner. "It is our hope to keep all of our facilities (that are located on Northwest property) in place."
Wagner also cited a posting on Northwest's employee newsletter, Newswire, that indicated the sponsor company also hopes an amicable agreement can be reached. The billion-dollar CU has 16 branches, seven of which are on Northwest property, and 31 ATMs, 23 of which are on Northwest property.
"We have been hearing a lot from our members, and they have been unanimously supportive," said NWA FCU VP-Marketing John Wagner. "We were pretty clear that our credit union is safe and secure, and they are very confident about our long-term viability."
And not surprisingly, particularly since Northwest, like most of the nation's airlines, has had to lay off many employees since Sept. 11, 2001, many members are also expressing outrage that Northwest plans to sever from the credit union.
"We're hearing some of that, too," Wagner said, adding, "and some of it is in language I can't repeat." NWA FCU counts 90% of Northwest's current employees as members.
When Northwest Airlines asked the NWAFCU to pay an annual fee estimated at about $6 million, the credit union responded by saying NCUA had determined that the payment of such a fee would not be allowed. The airline then decided to cut ties to the CU, which may prompt NWA FCU to rethink its single-sponsor status.
The idea of diversifying its field of membership has come up from time to time over the years, but because it had such a good relationship with its sponsor, it never became a big issue, the credit union reported.
Now, NWA FCU may have to take a much closer look at diversification, though no decisions about that have been made. To some degree, the credit union's FOM has been diversified, through no concerted effort on NWA FCU's part.
Layoffs, attrition, and family members in its field have meant that current Northwest employees no longer makes up the vast majority of members.
As little as a year ago, the majority of members were current airline employees, "but the airline has been shrinking so much that it's hard to pinpoint what the actual percentage (of the CU's members are current Northwest employees," Wagner related, noting that some other airline CUs have added new groups or looked to community charters to create a more diverse FOM, in part to ensure that problems with the core sponor don't weigh so heavily on the credit union.