Point West Meets Net Worth Restoration Goal Two Years Early
May 3, 2012
May 3, 2012
A Portland banquet room is packed with enthusiastic staff and members. Festive orange and brown balloons float to the ceiling, children nibble on branded cupcakes and mascot Max D. Posit poses for pictures. The festive atmosphere of Point West Credit Union’s Annual Meeting belies the dark cloud that hung over the financial institution during the peak of the financial crisis in 2008.
That’s when the credit union’s net worth ratios teetered on the brink, prompting the management and board to take a courageous step into self-initiated prompt corrective action. While the economy continued to present challenges, credit union leadership also struggled with a barrage of regulatory issues.
“There was no silver bullet,” said Amy Nelson, one of two CEOs leading Point West.
“We were feeling the stress of the economy’s downward trend,” noted Point West’s co-CEO Nick Hodson.
Dual CEOs are a rarity in credit unions, but the Nelson-Hodson partnership seems to serve as a microcosm of the forces that came together to save Point West.
Working with the National Credit Union Administration (NCUA), the Point West team created a Net Worth Restoration Plan that won approval in 2009.
“Our net worth dropped so low, we had to do it again,” said Nelson, adding that the plan was revised three times before it being re-approved in 2010. Retooling the lending program, rebranding with a tight budget, replacing outdated technology and updating a non-compliant website were all part of the plan, too, and Nelson said it would not have happened without business partners who believed and gave more than expected.
“You can get through anything if you say ‘yes’ first to a conversation and then do it,” she said.
There was also buy-in from the staff that remained—down today to 29 from its peak of 57. And there was a lot of love from the credit union community, as competitors reached out to lend advice, information on best practices and moral support. Nelson and Hodson are adamant about crediting Unitus CEO Pat Smith for her mentorship.
“She gives us our vitamin B shot at quarterly meetings,” Nelson said, and she went on to acknowledge help from the Northwest Credit Union Association (NWCUA) and OnPoint, Oregonians, MaPs and Advantis credit unions.
In fact, Advantis CEO Ron Barrick was a warmly welcomed guest at the Annual Meeting.
Board Chairman John Savory noted that the leadership, board, staff and partners from the credit union community performed “heroic work” restoring the health of the credit union.
“We are going to be a stronger and better credit union than ever,” he said. “We have an aggressive plan to be a leader in the credit union movement. We’re here to compete and to win.”
“We have seen vast improvements that allow our credit union to offer competitive loan rates and deposit opportunities,” Hodson said. Specifically, Hodson announced that members will be rewarded with 1.49-percent auto loan rates for 36 months, double credit card points and interest paid on some checking products as high as 2.5 annual percentage yield on balances up to $25,000.
Point West’s story mirrors that of many historic credit unions. It came from humble beginnings in 1932, when five Multnomah County workers each put up $5.25 of their own money. The membership diversified in 1991, when the National Association for the Advancement of Colored People (NAACP) Federal Credit Union was merged in, and again through a 2005 merger with Hacienda Community Credit Union (HCCU). Employees of city and county governments in Washington, Clackamas and Yamhill counties are now also eligible for membership.
“They are demonstrating what can be done in a cooperative institution when everybody—members, staff, volunteers and leaders—pull together for the long-term benefit of the cooperative model,” said Troy Stang, NWCUA president. “Cooperation amongst cooperatives was a key contributing piece to get them where they are today.”
Where they are today feels fairly warm and fuzzy compared to where they could have been. Point West’s net worth hit 6 percent in the first quarter of 2012, and its member satisfaction rates would have any CEO grinning from ear to ear. 88 percent would refer friends and family to Point West, 76 percent consider Point West to be their primary financial institution and 90 percent give the “friendly, helpful staff” good or excellent ratings.
Not bad for a credit union that weathered such a storm.
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