Safeway Los Angeles Federal Credit Union was recognized as one of the leading
credit unions in IRA Accounts, ranking fifth on the list of Top 50 IRA Balances
as a Percent of Total Shares (as of September 30, 2001) in the December,
2001 Callahan Report.
When asked what accounted for having 28.14% of total shares in IRAs, Dave Holmes,
president of Safeway LA said "it was dumb luck," explaining that 13 years ago,
"our sponsor group sold the division we represented to another grocery company
and there were a lot of payoffs that rolled over to the credit union." The rate
the CU offered then was higher than 10%, he added.
"We pay at market or better for IRA accounts," said Holmes. The CU is now offering
3.5% for a one-year IRA. "That's better than most S&Ls and sure better than
Enron stock," Holmes added. As of January, the IRA share was 24%, at $20,071,000
which represents a drop from a high in 1995, when it was just over 28%, said
Holmes. (Safeway LA has assets of $84 million.) Membership has risen due to
SEG expansion to nearly 20,000 members from 7,000.in 1989. The vast majority
of IRAs are from those Safeway employees, while loans are mainly coming from
the SEG side, said Holmes.
Safeway's assets had been decreasing since the sale of the division, when the
trend reversed itself in 2001 and the CU gained $2.5 million ($77,000 of it
in IRAs) and has picked up another $1.2 million in IRAs so far in 2002.
"People are disheartened with events in the stock market," Holmes said; and
he is well aware of the increased individual limit, which kicked in last month.
"To $3,500, yeah, I know. We'll take the money," he laughed. Holmes recognizes
the opportunity for credit unions in IRA accounts. "Members need a place to
park their money that's safe." But Safeway LA doesn't do any direct mail marketing
to attract IRAs.
Concerns over capital will kick in, he said, if the CU attracts more than $10
million in IRA money. "Our capital is now 12.93%, and if it goes below 10% we'll
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