"Banking Industry to Lose 200,000 jobs", Fox Business News, April 1, 2008
"AT&T to Lay Off 4,600 Workers", Wall Street Journal on April 18
"Citigroup cuts 9,000 more jobs", CNNMoney on April 18
Last week the Labor Department announced that initial jobless claims increased by 17,000 to 372,000 for the week ending April 12, slightly below the forecasted increase of 18,000. Thirty-one states and territories reported an increase in new claims.
Another Labor Department survey, completed at the end of March, reported that more than 4.9 million people were working part time either because they could not find full-time jobs or because their companies had cut hours due to the current economic environment. This is an increase of 400,000 since November of last year. Those experiencing cutbacks in hours or tight budgets due to increases in food and gas prices may need help in the short-term. It is, though, in both the credit union and members' interest to develop a long-term dependent relationship.
Jim Costello, EVP of NuUnion Credit Union ($795M in Lansing, MI), recently described a product created by the credit union, whose SEGs include state employees of Michigan. Last year, when the state government almost shut down due to budgetary concerns, the credit union created a new signature loan designed for those who may be affected by the shutdown. While adaptable to a member's needs, the loan had a maximum amount of $7500 with a term of 48 months and 4.9% rate for prime borrowers. While the loan wasn't limited to state employees, it was targeted to them in a press release and mentioned to all in a member newsletter. Although the government didn't shut down, NuUnion demonstrated the flexibility necessary to respond to quickly changing community economic conditions.
Phil Buell, CEO of Superior Federal Credit Union ($262M in Lima, OH) recently discussed how his credit union had helped members. “When factories close”, he said, “we can help members buy time to retrain and find another position.” The credit union has also found that a fair number of factory workers who had been laid off started small business, creating opportunities for themselves, the community and the credit union.
Simply finding a new job, however, is only one of the issues with which members struggle. When one factory closed down early in this decade, Buell saw many members cash in their 401(k)s, not understanding the tax penalties. When another factory closed three years ago, the credit union made a dedicated effort to help members understand every facet of their decisions.
The rewards of helping members can impact the perception of the credit union in their community. Superior FCU, for example, is working with their community and eventually hopes to become an economic development partner. Recognition of supporting the larger community can help the credit union succeed long past any economic slowdown.