Branch Closings Reignite Arrowhead Furor
The yearend closing of eight branches of Arrowhead Central Credit CU including six in a California supermarket chain rekindled this week the local dispute over last June's NCUA conservatorship.
At issue are both the economic fallout from a leading CU losing its competitive presence to a bank and long-running complaints from a private economist--with former ties to the CU--- that the agency erred badly in seizing the $720 million San Bernardino CU.
The economist, John Husing of Redlands who had Arrowhead as a former client, charged in local media reports the agency continues "to destroy a once-viable financial pillar for our community," citing the closing of the Stater Bros branches as further evidence.
NCUA has insisted it acted fairly and expeditiously June 25 to solve a grave crisis for the failing CU, whose net worth had dropped to 2.5% and had suffered large real estate losses in a severely depressed economy. Analysts had charged that the CU's ousted president/CEO, Larry Sharp, had too many risky loans on the books and had high expenses, a point vigorously challenged by Sharp and others.
As to the Stater branch closings, the president/CEO of the San Bernardino chain, Jack Brown said he regrets losing Arrowhead as a "great" financial partner considering "as a hometown credit union we worked very hard to accommodate their needs." He said the leases were written "very openly giving NCUA an easy way out."
Brown said the chain with 167 Southern California outlets has already signed a major bank to replace Arrowhead, but he declined to name the bank.
Brown also told the Riverside Press Enterprise that he expected the new bank would be offering "even more services than the credit union could."
In approving Arrowhead's branch closing, NCUA has stressed that the shuttering is being executed as part of the overall program to restore profitability and with "a careful analysis of traffic and transactional patterns" and the ability of Arrowhead members to received uninterrupted service from other branches.
Two full service San Bernardino area branches are in the group slated for closing by Dec. 31.