Beleaguered NWA FCU, under pressure from its financially ailing corporate sponsor, has applied to NCUA to become one of the first credit unions to adopt the new Trade, Industry or Profession-wide fields of membership.
The so-called TIPs charter, approved in March, would allow the $1.5-billion credit union to get out from under the thumb of Northwest Airlines, which is moving to evict the credit union from its properties and force it to shed the corporate logo, unless the credit union pays as much as $6 million in annual ransom.
The TIPs charter would allow the state's largest credit union to sever its 65-year relationship with Northwest and expand from serving mainly employees of the money-losing airline to serve all people working in the air transportation industry surrounding the credit union's major facilities in St. Paul/Minneapolis, Detroit and several other locations, sources familiar with the application told The Credit Union Journal.
Officials with the besieged credit union refused to comment on the application, only to say they are continuing to seek a resolution of their differences with the airline. "We're still proceeding, looking for new locations," said John Wagner, vice president of marketing for the credit union.
Northwest, which lost $1.6 billion last year, eked out a $227-million profit in the just-completed second quarter, mainly because of a $209-million payment from the government's airlines assistance program and the $160-million sale of its Worldspan unit. Otherwise, the company would have reported a $160 million loss for the period.
NWA FCU is one of two airline credit unions seeking to expand its membership base through the new TIPs charter. America Airlines FCU President John Tippets said his credit union has also applied to NCUA to expand beyond its current single sponsor to serve employees in the air transportation industry. While the TIPs charter was originally planned to serve employees of a trade, industry or profession with a well- defined geographic location, Tippets said he has proposed that the $3- billion credit union serve all air transportation employees in Dallas/Ft. Worth, Chicago, Boston, Los Angeles and New York. "It would only be in places where we have an existing operation," said Tippets.
As many as a dozen credit union have applied to NCUA for the TIPs charter, according to NCUA. But the new charter would have special meaning for NWA FCU because of the acrimony that has emerged between it and its ailing sponsor, which in April demanded as much as $6 million a year in rent to continue to allow the credit union to use seven of its 16 branches and 23 of its 31 ATMs on Northwest property, and to retain the airline logo on its materials. In an unprecedented move, the credit union sponsor filed suit last month demanding NWA FCU cease using the NWA name and logo unless the credit union agrees to some kind of royalty payment.
The new charter would allow the credit union to expand its FOM to broaden its membership base, to shed the NWA moniker, and begin the physical separation from Northwest Airline properties.