Is Ronald Westad and Arizona Federal turning its back on the young, the poor, and the underserved in our community? How is this mutually beneficial to society? Is the $3 per month and $36 per year weasel fee the right way to drive off the poor? Is this a proper way to “give back” to the community? Why is Arizona Federal acting more than a bank than a friendly credit union?
http://www.cutimes.com/2009/02/04/home-value-declines-drive-big-cu-losses-and-point-to-trouble-ahead
According to Westad, his institution’s commitment to serving the underserved was its undoing.
“Our member demography is a lower income and a younger membership base, and so where we are at currently is reflective of our commitment to serve these individuals, as they’ve been the ones hardest hit by this economic downturn,” he said.
Arizona’s job losses are typical with those suffered in the Sunbelt thus far, in the construction, retail and service industries, which are typically filled by young and poor workers.
AFCU has always managed higher delinquency and charge-off rates as a consequence of serving that market, Westad said, but up to this point had successfully offset credit risk by managing interest rate risk and following other asset liability management strategies. Historically, AFCU’s combined delinquency and charge-off ratio had run as high as 4% without affecting the bottom line. As of Dec. 31, that ratio stood at 13.04%.
http://www.cutimes.com/2009/01/23/westad-underserved-hit-the-hardest
PHOENIX – The $1.7 billion Arizona Federal Credit Union recorded a nearly $116 million net loss and placed $174.5 million in loan loss provisions as of December 31, 2008, resulting in an undercapitalized 4.75% ratio.
AFCU began 2008 with almost 11% capital. What happened?
According to President/CEO Ron Westad, his institution’s commitment to serving the underserved backfired when the real estate market turned south.
“Our member demography is a lower income and a younger membership base, and so where we are at currently is reflective of our commitment to serve these individuals, as they’ve been the ones hardest hit by this economic downturn,” he said.
In Arizona, the real estate bust has resulted in lost construction, retail and hotel/resort jobs, typically filled by young and poor workers.
AFCU has always managed higher delinquency and charge off rates as a consequence of serving that market, Westad said, but was able to offset credit risk by being more diligent in managing interest rate risk and following other asset liability management strategies. Historically, AFCU’s combined delinquency and charge off ratio had run as high as 4% without affecting the bottom line. As of December 31, that ratio stood at 13.04%.
Arizona Federal Credit Union has a new $3 Monthly Membership Fee! Greedy fatcat managers are forcing members to pay a mandatory $3 ripoff fee every month, simply for being a member. That's not mutually beneficial. 