Annual Meeting Notes - 2009 Northwest Community News and Events

Northwest Community News and Events for 2009

Events and announcements for:

February 2009--Members met at the Annual Meeting on March 18

If you missed our annual meeting, here are some highlights that you might find interesting:

Helen Byrnes (CEO) Annual Meeting Speech

A lot of 2008’s national and local financial news was less than bright. Sadly, 2009 is shaping up to be downright bleak. More working people and families will be left to wonder about their finances and their futures. I’m going to talk about the big banks that were part of the problem, how credit unions can be part of the solution, and why Northwest Community will be a viable choice during and after these difficult times.

You’ve seen the nightly news. America’s layoffs, the outsourcing, the lack of credit, the salary reductions and dwindling consumer confidence; it all comes from a complex mix of business and consumer factors. However, I think big banks need to accept their share of the blame. For too long, big banks have used their influence and lobbying power for the benefit of a select few. Big banks have also done everything they could in order to squeeze more money out of consumers.

2008 was affected by two of the banking industry’s key goals: 1) limit any legislation that would protect consumers against unreasonable lending practices, and 2) deregulate the national banking industry and reduce oversight even if that exposes investors to greater risks and corporate fraud. The result of the banking industry’s influence is that more borrowers have been put into a perpetual state of debt. We shouldn’t forget the people who lost money when their “recession proof” bank stocks became worthless thanks to seizures and closures. It’s no wonder that people are irked to hear about bank CEOs who earn fantastic salaries and bonuses after laying off their workers. And not many investors are happy to hear about bank executives who escaped to safety with golden parachutes.

Northwest Community has never been traded on Wall Street. We don’t pay multi million dollar salaries to our executives. Our Board of Directors are volunteers. We avoided adjustable rate mortgages. In fact, we have a proud history of giving people only the loans they can afford. We have always been averse to taking financial risk. And I’m proud to say that our credit union—like credit unions across America—has not taken a single penny out of the billions of tax-payer dollars that went to a bunch of bank bailouts. It’s clear that credit unions offer an affordable and sustainable alternative to banking as usual. I also think that credit unions can play a large role in helping people and small businesses recover.

Here at Northwest Community we have helped hundreds of people to keep their homes and vehicles. Many of our members are especially hard hit by layoffs in the manufacturing and wood products sectors. So we work to help our borrowers rework and reduce the rates they pay. In some cases, we have allowed people to pay a small portion for up to nine months. This is not “good business.” It’s smart business. By keeping people in their homes and cars, we are helping them get through a temporary rough spot. We are here for the long haul. And—unlike a lot of the big banking and finance companies out there—we have been happy to help our borrowers without being forced to do so by Congress. I admit that I am pleased that Congress has enacted recent credit card protections and mortgage regulations that will help safeguard consumers. But it’s a little late in coming. Many of the new regulations will not take affect for at least another year, and credit unions have voluntarily given affordable, fair loans to our members all along.

Besides reworking our loans to help desperate borrowers, we also provide specialized financial counseling when people don’t know where to turn. If banks and finance companies have been all too happy to squeeze people for income, then we’re just as happy to pay for the debt counselors who help our members work with borrowers and get their lives back under control. People are smart. And borrowers are learning they have a choice. Some of the people who were hardest hit by predatory lending are speaking loudly, and not ashamed to tell their friends and family not to get into such predicaments or ever borrow from unscrupulous lenders. It may take some time, but we think there’s a growing and exciting shift in the American mood. More people are interested in saving money and borrowing wisely.

Now borrowing is an important part of life. And we’ve been financially smart enough not to “lend ourselves out” during the borrowing craze of the past decade. Unlike many institutions, we still have money to loan. And we are here to help consumers and small businesses get the credit they need and can afford. This might mean the difference for someone who needs to lower her house payments, or it could mean we give a local company the chance to expand and hire more people. We think small business is going to be a huge part of helping people go back to work. So it’s a good thing that Congress may allow us to loan more of our savings out to small businesses. Traditionally—thanks in part to the banks—credit unions are prevented by legislation from making business loans that amount to much more than a very small portion of our available assets. Opening this limit up is going to help us get more money into the hands of small business employers.

Another piece of the solutions puzzle is that the temporary increase—up to $250,000—of National Credit Union Association insurance (which applies to each saver’s account here) may become permanent. This is good. Credit unions normally pay better savings rates and we want people to think of us the safest harbor possible.

We are setting aside more money for loan write-offs this year, but I am concerned about another big cost we may face in 2009. It’s possible we (that is, all credit unions) will have to pay in a large amount of money to help recapitalize the NCUSIF fund. Credit unions are working with congress to extend this cost over a five-year period. Northwest Community is able to absorb this large, one-time expense, but it could be very difficult and unfair for small credit unions, or even larger credit unions that are not as well capitalized as Northwest Community . We will have more to report later this year.

We will continue to work with our members, our communities and employers to get through these trying times. As always, we’ll stay focused on giving profits back to our members in the form of better rates and fewer fees. And speaking as an employer, our not-for-profit model allows us keep enough staff on hand so we can give people the local, personal service they deserve. So please join me in encouraging friends and family to bank at a credit union. Even if you talk someone into joining a different credit union, we think it makes more sense than ever for people to do their banking with a locally-owned institution that puts your money back into the local economy.

Barb Blackmore (Board Member) Speech

Last year was a year full of major projects and some big challenges for Northwest Community Credit Union. I am proud of our credit union’s employees and management team and the way they performed during a difficult year. I am also proud to be a volunteer. Along with my fellow Directors and Supervisory Committee members, I have been able to participate in shaping our shared vision of the future of this organization, taking part in the credit union’s initiatives and working with management to help safeguard the financial interests of our membership’s combined assets.

I’ll start by mentioning a couple challenges. At first, 2008 kept everyone busy with the transition to a new core operating system. The learning curve has been overcome and the new ways of doing business don’t feel so new now. We are moving forward and we’re able to work faster. Now, we can start to take advantage of the new efficiencies that our operating system brings us. Thanks to a lot of hard work that went into the upgrade, you can look forward to improved electronic banking tools, on-line account opening and real-time loan decisions. These projects should take shape in late 2009.

Another challenge that arose in 2008 was the slowing economy. Before things got bumpy on Wall Street, we were well aware that a growing number of our members faced financial hardships. But we were prepared. We hired specialists to help people balance their finances. Our goal since 1949 has been to help our members grow their wealth. Sometimes, that means financial education or taking time to help families get their budgets and debt payments under control. If someone “walks away” from an overdrawn account or overdue loan, all our members help pay for that loss. Therefore, we work to identify struggling members and try to help them early. We do everything in our power to help people recover from events like layoffs and pay cuts, or from falling further behind thanks to predatory lenders.

Let’s face it, before things get better, it’s likely that more banking institutions and lenders will continue to struggle . . . or even cease to exist. But we have some good news about the health of Northwest Community. Like most credit unions, we are very cautious with our members’ combined dollars. Credit unions have federally backed insurance that is better funded—and put to use far less frequently—than the national insurance fund which covers people’s deposits at banks. In particular, our credit union is rated as “well capitalized” (a regulatory description of the percentage of cash reserves we set aside). Plus, we didn’t get into the risky lending that got so many financial institutions—and their borrowers—into trouble. We continue to be careful with costs, whether it’s executive salaries or rolling out new branch locations. This means you will never see us buy national TV ads during the Super Bowl. But it also means we’re patient enough with our savings that we’ll be able to quickly afford new locations and services when the economy recovers.

One of my favorite areas to report on involves the many ways in which Northwest Community works to give back to local neighborhoods. The list of charitable organizations and volunteer projects we support is huge. We enjoy giving. It’s in our blood to help people and our local communities build wealth. Plus, our employees find more enjoyment and meaning in their jobs here. Here is one example of our employees giving. At our all-staff training day, we assembled 27 bikes for children in foster care or who have been put into protective services with the CASA program. This was a continuation of our involvement in an Oprah’s Big Give event where we helped raise tens of thousands of dollars and a mountain of clothing and toys for foster and children protection programs throughout Oregon. We continue to partner with the Credit Unions for Kids program, and our employees and members throughout Oregon helped us raise over $30,000 in 2008. In addition, we found ways to get our staff involved in forest and urban cleanup projects throughout Oregon. We also collected tons of food donations and school supplies for local food banks and shelters at all of our branches. I can’t list all our activities and involvements, but I’ll say this: every branch, every month, is involved in the credit union philosophy of people helping people.

I would like to make special mention of our employee and member blood drives. 2009 marks our 60th anniversary and we are now in the process of organizing a drive for local blood banks where we will collect 60 pints in one day. Please roll up your sleeves and join us for the drive on July 29.

As a Board member, I can personally affirm that Northwest Community has remained very active in the credit union movement. We sponsored broadcasts for a local political debate; hosted scores of local civic and commerce events; sponsored large musical and cultural performances; traveled to Salem and Washington DC to meet with our legislators and regulators; and actively worked to get managers involved in local zoning and on public development Boards and committees. We do this so we can be visible and help remind the public, our politicians and local business leaders that credit unions matter. We are an affordable and important alternative to banks.

We also stay active in state and national credit union leagues. In fact, 2008 marked the first year where 100% of our employees made at least a small donation to the Credit Union Legislation Action Council (now the 13th largest political action campaign). These programs are essential; otherwise, politicians might listen to the interests of the powerful banking lobby who continue to try and take away our ability to give average people an affordable choice when it comes to saving and borrowing.

I’ll close by talking about one of the more interesting projects in 2008. That is, we got underway with the planning and design for our brand strategy. This is important stuff. Our brand is who we are, how our members see us and how we want employees to think about us. Our brand also says something about where we want to take this credit union.

The new brand was built after months of studies and focus groups with members and employees throughout Oregon. We discovered some interesting things. To put it briefly, people in the Northwest want a place that goes beyond business as usual. Northwesterners are unique and independent-minded, and they want a financial institution that is more personal and local. People in Oregon want to bank somewhere that’s free from the old standards of decision-making and profits happening far away from the local community. The new tag line is simple: “Northwest of Banking.” The story is much more profound. Board members and employees, from top to bottom, are taking this tag line to heart.

Everything we do and every decision we make will take into consideration how we can take the member’s banking expectation a step above the ordinary, that is, to a place where everyone is Northwest of Banking.