`Don't Let Single Sponsor" Dictate Future: Desmond
SCOTTSDALE, Ariz - Here are two basic lessons for single sponsor credit unions: "you have to look out for the best interests of your own credit union," and it is folly to expect the sponsor to be looking out "for anyone but the sponsor." The advice comes from Daniel Desmond,...
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SCOTTSDALE, Ariz – Here are two basic lessons for single sponsor credit unions: “you have to look out for the best interests of your own credit union,” and it is folly to expect the sponsor to be looking out “for anyone but the sponsor.” The advice comes from Daniel Desmond, president/CEO of the $620 million TruWest Credit Union, of Scottsdale, which on June l marked five months since it changed its name from Motorola Credit Union-West and formally split from its parent, Motorola Inc., the big Chicago high tech firm. Since the breakup, TruWest has pursued an active expansion program encompassing what it sees as a successful community-based field of membership in Phoenix’s eastern suburbs. At the same time, the Arizona-based CU has added a new branch in suburban Tempe, launched shared branching, and expects to open next January or February a new multi-million dollar regional sales and training center in Austin, Tex. where it has long maintained a presence. “We had a great relationship with our sponsor for 50 years and we still do, but I’m glad I didn’t wait any longer to make the move we did,” confided Desmond maintaining delay would have triggered an exodus of members following Motorola’s demands that the CU no longer service spun-off subsidiaries. To alter its structure, TruWest received state approval to add new members in 59 Phoenix area zip codes on the city’s east side, as well as bring in new SEGs. At the time, Desmond called the structure revamp “emotional, but necessary.” In adding a block of new members at one time, Desmond said CU management feared “we wouldn’t be able to handle” the service load, but the problems “never materialized.” TruWest with 56,000 members continues to serve employees of Motorola, ON Semiconductor, General Dynamics and Compass LLC. Despite the new solicitations, Desmond said the membership base has remained at a “break even level though we are adding 200-300 new members a month.” Following the transition, the CU “closed down and cleaned out many accounts.” Meanwhile, TruWest has began advertising on Arizona Diamondbacks TV broadcasts with a 40-game schedule and 30-second spots appearing “before and after the game.” A spokesman noted Bank One, which has its name on the Phoenix ballpark commonly known here as “The BOB,” maintains strict control of advertising on game broadcasts barring other financial institutions from spots during the games. In its service mix, TruWest said also it has begun offering e-statements to its members. “All in all, we are extremely pleased at the progress we’ve made,” concluded Desmond, adding though that “lending remains difficult” as it has for other CUs in Arizona and elsewhere. Regarding single sponsor relationships, he said “they are great when they go well,” but when conditions go awry “you really can’t hesitate to make a change because business is business and the sponsor will be looking out for what is best for his interest.” -
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