VALLEY VILLAGE, Calif.-It's been a year now since the final credits rolled for tiny Motion Picture FCU.
But its story is similar to that of countless other small credit unions, and Dorothy Asbury, who ran Motion Picture FCU as a one-person shop into her 80s, shared the story with Credit Union Journal. Asbury finally retired after MPFCU was merged into Musicians' Interguild CU in nearby Hollywood.
The credit union was chartered in 1959 to serve a niche industry, motion picture costumers. It was based on La Brea Blvd. in Hollywood. Asbury had a job at Fox Studios before she was laid off in 1972.
"I took a part-time job at the Publicists Guild for two years," she recalled. "There also was a credit union for publicists that was chartered in 1964. I began working with the credit union on its delinquencies two days per week."
In 1974, the manager at Motion Picture Costumers CU quit and Asbury was asked to work for both credit unions. She said operating the two CUs separately worked well for about 10 years, until the two merged.
"All of the processing was done through a bank," she said. "I operated Publicists in the morning and Costumers in the afternoon. It got a little bit complicated if data processing came back with mistakes, as it took a long time to fix. I did everything in-house. I printed my own statements. I liked working by myself, because I didn't have to watch over someone to make sure they didn't make any mistakes.
But not everyone was unconcerned. "The federal examiners told me not to mix up my two credit unions," she added with a laugh.
Asbury's dual management responsibilities went on until the late 1980s, when Motion Picture Costumers FCU took over Publicists FCU and became Motion Picture FCU. The new credit union's field of membership consisted of workers from television and movies, including set designers and script supervisors.
"We didn't want to expand," Asbury said. "I told one examiner we didn't want to grow, we wanted to keep things simple. We got criticized for not having enough delinquencies, which we were told meant we were too conservative."
Being in Hollywood during the golden age of film made for some interesting stories. One of MPFCU's longtime board members was a costumer on "Gone With the Wind." Asbury said the costumers would reminisce about the actors they used to dress.
By the time the calendar turned to 2000, Asbury said the limitations of the small CU were showing.
"We didn't have checking accounts or some of the other benefits our members wanted, and I realized we were losing members to Musicians Interguild. We had CDs at one point, but that didn't pan out. We had regular savings accounts and made loans."
In April 2010 an NCUA examiner visited Motion Picture FCU and was "not at all sympathetic" with the credit union's lack of growth, Asbury recalled.
"We didn't have delinquencies but we didn't have very many loans," she reported. "We didn't even have a policy for an allowance for loan losses because we didn't have any. Over 50 years we only lost $100,000, or $2,000 per year. We have never been above 30% loans to shares, because our members just were not borrowing. Most of our money was in CDs, as it is at a lot of small credit unions, but that doesn't work any more because you can't get a good rate."
The failure of WesCorp was "horrible" for MPFCU. Asbury said it lost its capital account, which was about $60,000. Adding to its bad luck: it had a jumbo CD with St. Paul Croatian FCU, which is the largest-ever failure of a natural-person credit union.
Given the conditions, Asbury recalled she began looking around for opportunities for mergers. Aware that many of her members also belonged to Musicians' Interguild CU, Asbury pursued a merger, even though its state charter meant there "were some details to work out there."
'Too Small Not To Fail'
According to Asbury, in a world that was told some banks were too big to fail, "We were too small not to fail."
"It is impossible for small credit unions to make it these days. We disappeared Jan. 31, 2011, and that's the way it goes."
At its zenith Motion Picture FCU had 900 members. At the time of the merger it was down to less than 500. Its capital ratio was 11% in June 2010, but it did not make a loan in the second half of 2010. Its asset size had declined to just $4 million.
"Many of our members were dealing with layoffs. Entertainment people are either working really hard or not working at all," said Asbury. "We tried to tell the examiners that our people worked spasmodically, but they didn't get it. Our members were saving members and we loaned that money to their fellow union members. The credit union concept is a great idea."
Asbury said she felt more comfortable merging with a small credit union.
"Musicians' is a great group and it had the same field of membership we did with the entertainment people. It was an ideal merger partner. I am not bitter because I realize the world is what it is. I am grateful for having the years that I did and now I'm enjoying traveling."
