An Ex-Defense CU Goes On Offense

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SPOKANE, Wash.-As was the case with many credit unions associated with military bases, the $344-million Global CU was shaken up by the steep defense cutbacks in the late 1990s.

Global was chartered in October 1954 as Fairchild Federal Credit Union, serving Fairchild Air Force Base west of Spokane. It later expanded to serve both the Army and the Air Force overseas in Italy, Greece, Crete and Turkey. Jack Fallis, the credit union's president and CEO, said the Global CU moniker came about shortly after it began serving Aviano Air Force Base in Aviano, Italy, just north of Venice.

"We really couldn't have the Fairchild name in Italy for a whole host of reasons," he said.

At one point Global CU had members in all 50 states and operated 16 branches on U.S. military installations, including U.S. Army Camp Ederle in Vicenza, Italy, and Camp Darby, outside of Pisa, Italy. But it was those military budget reductions and potential fallout from the Base Realignment And Closure Commission that led it to move to a community charter for the entire state of Washington and four counties in northern Idaho.

"We needed to diversify if the military bases we served were closed," explained Fallis. "We still serve members of the Army and the Air Force with a distinct field of membership for their personnel."

Operating an international credit union with a hybrid charter, "is a challenge," he acknowledged, but with the advent of electronic banking services it has become a lot easier. One helpful development, Fallis reported: current military soldiers and airmen are "really adept at using technology."

In 2008 Global CU posted a $3.5-million loss as it put more than $3.9 million into its allowance for loan losses. In 2009 ALL increased to $8.1 million and it had a loss of $1.1 million.

In 2010 it rebounded with net income of $3.1 million before assessments. It paid $360,000 to the NCUSIF and $397,000 to the corporate stabilization fund, leaving it with net income of $2.3 million.

In the first quarter of 2011 it had net income of $973,000. Its net worth ratio was 8.14%, making it "Well Capitalized" by NCUA standards.

Unique Model In Washington State

The community portion of Global CU's charter has "worked out well" for it, Fallis said.

"Community charters have been very successful for all credit unions across the nation, but especially here in Washington. It is easier than serving SEGs. The state regulator has made it a business decision for a credit union, rather than a regulatory hurdle. If a credit union thinks it can adequately serve the community, it can go ahead and serve it, which is pretty unique.

"From a diversification standpoint the community charter ensures we will continue to grow and thrive," he added.

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