Kansas CU Pushes `Reach Out' to Lower Bankruptcies
WICHITA, Kan. - In a community reliant on the economic fortunes of the aircraft industry, Boeing Wichita Credit Union knows full well the difficulties of coping with bankruptcies and delinquencies. Late though it has made its "Financial Guidance" program a centerpiece of a program dealing with mounting layoffs. "We're pretty...
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WICHITA, Kan. – In a community reliant on the economic fortunes of the aircraft industry, Boeing Wichita Credit Union knows full well the difficulties of coping with bankruptcies and delinquencies. Late though it has made its “Financial Guidance” program a centerpiece of a program dealing with mounting layoffs. “We’re pretty encouraged with what we’ve been able to do in our Special Accounts department, ” noted Gary Regoli, Boeing Wichita president, in describing the CU’s staff of 20 trained counselors which engages in a kind of aggressive “ reach out” program to members through free guidance seminars. The seminars, conducted through Consumer Credit Counseling Services, are frequently advertised by Boeing Wichita in newspapers under the title “Eight Steps to Financial Survival During A Layoff.” Ever since 9/11 and the personnel cutbacks that took place at the big Boeing plant here and later at Cessna Corp. and Raytheon Corp., the $325 million CU “has put extra effort into training our staff to work with members,” said Regoli. That has meant loan consolidation to reduce payments in some cases and allowing members to make half of interest only payments for up to six months. Since the fall of 2001, the CU said it has helped more than 300 members, and only 10% of these accounts “have ended up in bankruptcy or repossession.” The program, which uses direct mail and radio spots as well as newspaper ads, is designed to give the member “time to work out their total financial picture, sell assets to reduce their debt or work at refinancing their loans to repayments,” the CU noted. Regoli maintains the program has created tremendous good will and brought about “a sense of cooperation on a personal level” with the CU’s 42,000 members. The CU has worked hard at developing close ties with Boeing so that “we are out front right away when a layoff is announced,” explained Chuck Bullock, vice president of lending. He noted that the CU staff is invited on factory premises “on exit day” to consult with members and non-members. For the last two years, the CU’s charge-off ratio has remained remarkably steady in the .65 ratio climbing to .71 last month but still below peer stats. The same goes for delinquency ratios which have dropped to .51 basis points, also below peer averages. In January 2001 they were above .90. In discussing the “pros and cons” of its program, Boeing Wichita acknowledged that while the payment schedule is worked out there is “devaluation of collateral backed by vehicles and RV’s,” and “after the six months” half interest payment schedule, “some members are still unemployed and default anyway.” In addition, “some members use the money saved on reduced payments to file bankruptcy,” said the CU. Nevertheless, the program has generated member good will and “when asked if any other creditors did this, the members always said no.” -
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