Credit Union Responds To Statement Made By Sponsor

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Just days after posting its initial announcement to members, NWA FCU updated its website to include a point-by-point response to several statements made by the airline in its employee newsletter, Newswire. Below is an abridged version of some of the statements and responses:

Northwest Airlines: Northwest has provided the Credit Union with valuable consideration for the exclusive location of its facilities at many Northwest buildings throughout the U.S., other exclusive access to airline employees, providing access to NWA benefit plans for NWA FCU employees and free use of its logo and other company identifiers in NWA FCU advertising and promotions.

NWA FCU Response: Northwest Airlines does lease space in a variety of its facilities to the credit union for our on- site offices and ATMs. The credit union pays market rates-as determined by Northwest-for this leased space at rates that vary from $16.50 per square foot to $60.94 per square foot for the nine-square-feet for the ATM in Anchorage. We have never asked for-or been offered-"exclusivity" in those leases or for any other "exclusive access" to airline employees.

NWA FCU employees do have access to Northwest Airlines benefit plans for which the credit union reimburses the airline for 100% of the cost of those benefits-as determined by Northwest-plus pays an additional administration fee.

The credit union does include pictures of Northwest aircraft and other Northwest-related images on its checks as well as on its credit and debit cards and in other materials. Northwest's management has consistently supported our use of those materials as a way to underscore Northwest's impact on the community.

Northwest Airlines: "In fact, the credit union has posted a profit of $20 million in 2002, a return far in excess of most commercial banks. Northwest cannot afford to continue to support the credit union in this manner, at the expense of our employees and the company."

NWA FCU Response: We are a not-for-profit financial cooperative owned by our members and thus don't have "profits" in the sense of a traditional business. Our earnings are split two ways: First, a portion of our earnings is returned to our members in the form of reduced loan rates and fees, higher savings rates and increased services. Second, a portion of our earnings is put into reserves. These reserves belong to all members of the credit union and cannot be given to Northwest Airlines or anyone else and are used to support the growth of deposits, loans and member service. Our return on average assets is in fact less than most local commercial banks.

We pay unsubsidized rents and we pay-dollar-for-dollar-for any services we receive from the airline. Included are payments for employee benefits of $3.3 million and office/ATM lease payments of $132,546 annually.

Northwest Airline Statement: Furthermore, rather than passing the profits back to its membership, the credit union management has invested in such ill-advised projects as its new headquarters in Apple Valley, Minn."

NWA FCU Response: The Credit union decided to construct our headquarters building in Apple Valley in 2000 because we had outgrown our old headquarters building in Bloomington to the extent that we were leasing additional space to house our employees. We looked at a number of alternatives besides construction, but in the final analysis, our member-elected board of directors concluded that constructing a new headquarters was the best option. Our cost of construction was very attractive, helped significantly by incentives given by the City of Apple Valley for locating our office here, and the building was finished on time and under budget.

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