Eastman CU no longer staffed by borrowed labor from sponsor

KINGSPORT, Tenn. - For the past 67 years, since it was founded in 1934 by employees of Eastman Chemical Company, $900-million Eastman Credit Union-the largest credit union in the Volunteer State-has been operated by full-time workers considered employees of the sponsor company. Starting Jan. 1. 2002, that policy will be a thing of the past. The $900-million ECU will employ its own workforce and no longer be one of a handful of remaining credit unions in the U.S. that use borrowed labor from their sponsor company to operate. According to the terms of a cooperative services agreement that required ECU to reimburse Eastman Chemical Company for the full cost of the services provided each month, a staff of about 200 people has worked at all levels of credit union functions for ECU, from the teller positions up through the President's spot. Andy Hale, marketing manager for ECU hypothesized that the working arrangement between the credit union and its sponsor evolved out of the history of ECU. The credit union was founded by employees of Eastman Chemical Company who knew the members because they were their fellow employees. They had the pulse of what the members' needs were because they worked along side them, said Hale. The arrangement worked well for many years, until recently. Originally chartered to serve active employees of Eastman Chemical, Hale said the CU's field-of-membership has expanded to include company retirees and the families of employees and retirees. "The biggest portion of our membership is no longer made up of active employees of the company," said Hale, because of attrition, retirement and "general economics." Now, the ratio of active employees to what ECU refers to as its associate members, is 1 to 4. Eastman Credit Union currently has more than 48,000 members located in over 40 states and many foreign countries. Hale said ECU has no immediate plans to change its charter, however "the transition to the new human resources structure offers Eastman Credit Union the option to expand its field-of-membership if it chooses to in the future." Eastman Credit Union's deposit insurance coverage through the NCUSIF will not change either. For now, Hale said ECU is focusing on putting together a benefits package for the credit union's employees that are comparable to the benefits they had as employees of Eastman Chemical Company. "The primary benefit of the change is that it will allow Eastman Credit Union to offer more products and services to its members," said Hale. He would not elaborate on the specific additional services the credit union is considering offering its members. He explained though that the cooperative services agreement limited the types of services the credit union could offer because of additional liabilities that were incurred by the credit union because the staff of the credit union were company employees. -ekingoff@cutimes.com