EUGENE, Ore. – In one of the first signs of the collateral effects of the corporate bailout, Oregon Community CU announced Friday plans to close down all four of its Portland branches, ending five years physical presence in the state’s biggest city.
Mandy Jones, president of the $900 million credit union, said they had projected to close the underperforming branches as soon as 18 months from now but the $7.6 million first quarter charge for the corporate credit union bailout hastened their decision. "The numbers and facts didn’t support the branches," Jones told The Credit Union Journal Friday, explaining that only 5,000 of the credit union’s 15,000 Portland-area members used the facilities, the rest opting for Internet, call center or shared branch transactions.
With a total of 14 branches, Oregon Community is serving 15% of its membership with2040% of its branches.
If it weren’t for the corporate bailout charge, Oregon Community would have reported a $495,000 loss for the first quarter. Half of that was related to the conversion of a new core processing system and the other half was additional loan loss reserves, as consumer loan problems, mostly in autos, are ticking up, according to Jones.
The effects of the recession are spreading to Oregon, she said, noting the country’s second-highest unemployment rate, 12.1%, portending greater problems to come.
Jones plans to work to control loan losses while aggressively cutting expenses. Beside the closure of the four Portland branches Oregon Community has halved its 37 ATMs–eight of them on University of Oregon campus-saving $266,000 a month maintenance costs.
