PITTSBURGH - In the small, former steel mill town of Monessen, Penn., 30 miles south of Pittsburgh, Jim Ritter, CEO of Valley 1st Community FCU, is seeing some of the toughest economic conditions in the nine years he’s run the credit union. Many residents are struggling with finances, with rising prices for energy and commodities hitting the elderly the hardest.
“Our older members are not keeping up with the bills they have,” Ritter told Credit Union Journal during the Pennsylvania Credit Union Association’s annual meeting here. “The credit union serves a low-income, depressed area, and many members are on fixed incomes. If they own a home and the mortgage is paid off, they still have to pay taxes. How are they going to come up with that money? I’m lending to people in their 70s and 80s to pay taxes and utilities. They are using their credit cards and tapping them out. Some of our senior citizens are just not making it.”
Ritter says that for many, the credit union is the “only place they can turn,” and that he does his best to meet their needs. However, the $59-million CU has to be prudent with its loan decisions, so sometimes it comes down to providing counseling and advice about changing lifestyle.
“I admit that I don’t know what the answer is,” Ritter said. “Maybe it’s time to sell the place or look at a reverse mortgage. My father passed away at 84 and never moved out of the house. He had that home for 50 years and he wasn’t going anywhere else. And that’s how it is for a lot of them. It’s sad to think about having home ownership your entire adult life and then giving it up.”
Moving in with the kids is an option discussed. But that’s hard for some because many children have moved out of town, he noted. “They got their education, and since the steel mill closed here 20 years ago, their best opportunities are somewhere else,” Ritter explained. “So they left and their parents stayed behind. I see it in our statistics–30% of our members are over 70 years old.”
Ritter would like to develop a CU solution to help the elderly, but each case is different.
“It’s tough because I can’t find any true common ground for each member that comes to me with this problem,” Ritter said. “I think our members know we are the easiest of any financial in town to talk with about their situation.”
Ritter hopes that energy and commodity prices recede in time to bring relief for his older members. Meanwhile, he’s also concerned how the current economy might affect other segments of his membership later in life. “I had one gentleman in my office the other day talking about borrowing $20,000 from his pension fund to buy the new car. It’s getting to be very tough times for some, and we need to be making sound decisions.”
