BOSTON — Weighed down by the declining economy, CUNA is expected to announce more job cuts in the coming days.
Officials with the trade association, which has been hit hard by its stock market investments, declined to specify the extent of the job cuts because of its impact on morale, but said they expect to make them official this week or next.
CUNA President Dan Mica said last week he expects the job cuts and other steps taken in recent months to help the trade group balance its operating budget for 2009. "CUNA is doing fine. CUNA is in the same situation as credit unions across the country," said Mica, during an interview at America's Credit Union Conference. "When credit unions grow and prosper, CUNA grows and prospers. When credit unions cut back CUNA cuts back."
Hurt by major declines in its investment portfolio, CUNA reported a $5.7-million loss for 2007 and an $8-million loss for 2008, forcing major cuts in spending. Among them were one-week forced unpaid furloughs for all employees, eight staff lay-offs, cuts in programs, a freeze in 401 (k) retirement payments and an attempted freeze in the defined benefits retirement plan for employees. The last step was stalled by CUNA's main employee union, but Mica said they will continue to negotiate with the union on the issue.
The goal is to achieve $2 million in spending cuts, according to Mica.
But CUNA's financial problems will not be solved by budget-cutting alone.
Over the last two years CUNA has seen a major decline in its investments, which fund retirement benefits and future obligations. The investments, which are 40% in equities and 60% in fixed-income instruments, were up $1.2 million in 2007, but down, with the rest of the markets, by $3.3 million in 2008. Though the investments fluctuate on a daily basis, Mica noted they were up by $430,000 through the middle of June, lending some hope for the year's performance.
CUNA has also been hit by cutbacks in credit union spending on conferences and advertising, main sources of revenue, and by the lost dues of Navy FCU and Pentagon, two of the nation's five largest credit unions, who disaffiliated.
Mica is confident, however, that the cost-cutting will help CUNA balance its operating budget, even as he hopes for a turn in the market to boost the group's investments. "For 13 years I've been here we have husbanded resources, built a strong organization, met the challenges that have come before us and we'll continue to meet them in the future," he stated.
