PEORIA, Ill.-More than 60,000 Americans were handed pink slips last Monday alone, and as layoffs pile up, credit unions are racing to their members' sides to ease the pain as much as possible.
Construction manufacturer Caterpillar announced it is cutting a total of 20,000 jobs worldwide, a significant blow to members at Citizens Equity First CU. Originally founded to serve Caterpillar employees only, the $3.6 billion credit union has expanded significantly over the years but still counts numerous Caterpillar employees and their families among their 235,000 members. In fact, one out of every eight members with a loan at CEFCU is a Caterpillar employee.
The layoffs come as a stiff blow, said Keith Reynolds VP-lending and business services, as the company has not seen significant layoffs in 25 years when the country was in the midst of the harsh 1981-82 recession. CEFCU is responding by pushing its financial counseling solutions, which includes a bi-lingual online program that helps members look at all of their budgetary obligations compared to both current income and what they expect in the future.
"We think financial fitness is a real value to our members because it's done confidentially, there is no charge to the member, and they are able to look at it in a holistic sense instead of CEFCU in a microcosm," said Reynolds.
Though he remains concerned for those being laid off, Reynolds is hopeful the impact on CEFCU's bottom line will be minimal, as many who are being cut will be forced into early retirement by Caterpillar.
"When we experienced this 25 years ago a lot of the people who were laid off were in their early 20s," he said. "The impact by those who are experiencing layoffs in their early 20s is different than those in their 50s."
The blockbuster merger of pharmaceutical giant Pfizer with Wyeth will not be such a great deal for many at each company - the combined entity plans to get rid of 19,500 positions which may put even more stress on Ledge Light FCU, which once served only Pfizer employees and their families; about 90% of its membership are still associated with Pfizer in some way.
But member hardship is nothing new for Ledge Light as the drug-maker has been restructuring its business and slashing positions for several years. "We have certainly taken an aggressive position in this environment," said President/CEO Bruce Fafard. "We have really developed a number of programs to reach out to our members and offer additional services and products that will assist them to get through these difficult times."
On a case-by-case basis, the credit union looks at restructuring loans, interest only payment plans and even deferring payments for a few months, Cheryl Dunaj, VP of Retail Services pointed out. Ledge Light also offers a credit-rebuilding program to help members get back on their feet. The $170 million credit union has displays in its branches and has fired off a number of direct mailing efforts to get the message out to its membership that the credit union can offer assistance to those who are struggling.
"If you're at a crossroads, come out and talk to us, we can help you through that," said VP-marketing and business Jim Metcalf.
"This is a whole credit union effort," Fafard added. "It involved everyone in the CU from the front line tellers right through to my office and I think that's the key differentiating factor in a successful program and one that perhaps doesn't reach its potential."
