Trouble In Riverside City
RIVERSIDE, Calif. -
The uproar is over Raincross's choosing of Visterra, which is headquartered in neighboring Moreno Valley, over Altura CU, located in Riverside-and Raincross' original charter was as Riverside City Employees CU in 1954. It changed its name to Raincross in 2003, but as of Jan. 23, its website still proclaimed it is a "credit union serving Riverside city employees and employees of organizations that are members of the Greater Riverside Chambers of Commerce."
According to local media reports, the Riverside City Council passed a resolution at a Jan. 9 meeting urging city employees to patronize Riverside credit unions, on oblique blow at Raincross' merger partner, Visterra. Moreover, the city reportedly said it will no longer encourage employees to join the credit union.
Vernon Elliott, CEO of Raincross, said the credit union considered four possible merger partners, and made its final choice between Visterra and Riverside-based Altura CU. He said the board of directors for Raincross felt the philosophy of Visterra closely mirrored its own on how to best operate the credit union. He dismissed the impact of the Riverside City Council's protest.
"Over the years, the city has not supported the credit union, anyway," he said. "The majority of our members are current or retired city employees, but there are a number of community credit unions in Riverside, so the city employees have a choice.
"The Council's philosophy is 'Shop Riverside.' This is understandable for the tax base, but people shop all over," he added.
Raincross will become the Riverside branch of Visterra, Elliott said. He will be a Visterra vice president.
Visterra-formerly known as March Air Force Base FCU-went through its own existential crisis in 1999, when March AFB was downgraded to an air reserve base, which meant a significant loss of active duty personnel. A conversion to a community charter followed.
Mark Hawkins, CEO of Altura CU, told the Credit Union Journal the controversy stemmed from the Riverside City Council feeling it was "cut out of the equation" when Raincross made its choice of merger partners, and because it felt the credit union did not give a full explanation. Hawkins, who was asked to speak at the Jan. 9 city council meeting, said he understood why Raincross felt it needed to merge, and was ready to move on.
"We are fine with them moving forward with Visterra. Raincross was in need of a shot in the arm for some years-they really needed to do this," he said. "The city contacted us because we are one of the most supportive members in the history of the Riverside Chamber of Commerce. The city could not understand why Raincross chose a Moreno Valley credit union instead of a Riverside credit union."
The larger issue, Hawkins continued, has nothing to do with a small CU in Riverside choosing between two merger partners. "This is something that will come up over and over. The boards of many smaller credit unions are going to have to decide what is best for their members, and for their future members."
Bob Cameron, Visterra's CEO, could not be reached for comment at press time.
Both Riverside and Moreno Valley are located in western Riverside County, approximately 70 miles east of Los Angeles in the "Inland Empire" region of Southern California.