PHOENIX-Arizona FCU plans to close eight branches by the end of January 2010.
Of the eight, seven are "in-store" branches with limited service capacity, while the eighth location was selected due to an expiring lease, AFCU said.
According to management, the intention was to eventually replace the in-store branches with free-standing facilities, "but given the current market conditions the credit union is no longer in a position to pursue that expansion."
Jason Paprocki, SVP and chief marketing officer, told CU Journal, "We have essentially repealed that strategy for the time being with this move. We will see what happens in the next couple years."
Asked if economic conditions were improving in the Phoenix market, Paprocki said, "There are a lot of challenges still with housing and unemployment."
The closures will take place in two waves. On Jan. 16, three branches will be shuttered: one in a Fry's Electronics store, one in a YMCA location and one inside a Wal-Mart. On Jan. 30, four more locations inside Wal-Mart stores will close, plus a branch in nearby Chandler.
After the branch closings, Arizona Federal will have 15 branches throughout the Phoenix area. In a letter to members explaining the branch closures, AFCU CEO Ron Westad said, "While we regret having to take this action, we do so as an appropriate step to ensure the long-term success of our credit union. This continues our efforts to consolidate our branch resources to meet the economic reality we all face, and helps to position us for future success."
All employees displaced by the closures will be relocated to other branches or departments within the organization. Paprocki said through attrition Arizona Federal has lost approximately 200 employees since Nov. 1, 2008, and therefore has the capacity to absorb those staffers. "We have not been filling open positions, so this gives us a chance to add to areas that were getting to the point of being understaffed. This move involves approximately 50 employees and we are very happy not to have to lay them off — especially given the time of year."
