In the 12-month period ending March 31, 2003, consumer bankruptcy filings rose 7.4% to an all-time high of nearly 1.6 million. In this economic climate where downsizing and layoffs continue to happen in virtually every professional sector and bankruptcy filing is steadily increasing, loss prevention is on everyone's mind.
For United Airlines Employees' Credit Union, these conditions have been magnified since September 2001. The aftermath of the September 11th tragedy left the membership in crisis. 20,000 United Airlines employees have lost their jobs and most remaining employees have taken several pay cuts- in some cases up to 33%. As a single-sponsor credit union when this crisis began, UAECU was understandably concerned. They took action immediately with an assertive and proactive approach to helping their traumatized members and protecting their bottom line. They began extending hardship programs and partnered with BALANCE to provide financial counseling to the entire membership.
''We were going to see incredible losses; offsetting any of that was beneficial to our organization'' said Dona Svehla, Member Service Coordinator for UAECU. The quick implementation of the BALANCE partnership to provide counseling for members in such dire circumstances impacted both losses and the need for the credit union to have a resource for their members. Svehla said, ''We started advertising the program quickly. The goal is to get the members help the second they can't make a payment. The earlier they get into it, the better the chance of them being successful.''
Aggressive promotion of the counseling service by the credit union and the airline resulted in over 1400 UAECU members contacting BALANCE in the first year of partnership. The members sought education and assistance on adjusting their spending, prioritization, the consequences of liquidating assets, maintaining a positive credit history, and options available for handling mortgage and auto loans as well as unsecured debt.
The credit union tracked the progress of 145 members who were counseled and entered into repayment plans. These members had a combined credit union debt of over $1.5 million. At the end of the first year, only four of these members filed for bankruptcy; the credit union loss for these filings was $58,000, less than 3% of the outstanding debt.
Joanne Budde, President and Founder of BALANCE said, ''It's been very rewarding for me to see credit unions implement our program in so many ways. When I started BALANCE, I believed we would be able to impact bankruptcy filings, and help save a few marriages, and some jobs. The success we've seen, however, in helping individuals and families become homeowners, or start saving for retirement, and in getting out from under their debt burden, has exceeded even my wildest dreams. I feel very fortunate that we are able to be a part of others' success stories.''
BALANCE Financial Fitness Program currently partners with over 100 credit unions nationwide to provide comprehensive proactive financial education and counseling to members and staff. For information on how you can help your members establish personal financial control while protecting your bottom line, log on to www.balancepro.org or call 800-808-4327.