HAWTHORNE, Calif. — It's been nearly four years since FAA First Federal Credit Union expanded its membership to include the entire air transportation industry, and during that time, a few observations made it clear that members certainly had specific choices about accessibility.

For one, the majority of members at the $294 million credit union preferred not to go into one of its three branches, said Eileen Rivera, president/CEO. Most conducted their financial transactions online, through ATMs and direct deposit. Many use the more than 1,800 branches available through the CU Service Center shared network. In fact, only 5% of the 24,033 FAA First members actually use the credit union branches–and that's OK.

“We've closed a few branches because we're appealing to those groups that want to do business online,” Rivera said.

The credit union was approved for a trade, industry or profession charter in 2004 to serve practically any area affiliated with the air transportation industry, including the Federal Aviation Administration, Transportation Security Administration, National Transportation Safety Board and employees of all airlines, including their subsidiaries.

Rivera acknowledged that while FAA First has seen membership growth each year since the TIP charter the gains have been nominal. In 2007, for instance, membership growth increased 3%–very consistent with the percentages for most credit unions across the country. But if it weren't for TIP, 15% of FAA First's members that joined under that charter would not have been eligible prior to the new field of membership, Rivera said.

While the credit union will continue to focus on building its nonbranch presence, Rivera said plans include seeking out opportunities surrounding current branches.

“We're going to focus on where we have branches–Los Angeles, Seattle and Chicago. There are a lot of businesses around the airports that we haven't even begun to penetrate.”

Like FAA First, a number of airline-affiliated credit unions expanded to TIP charters to not only significantly widen their potential member base but to also create a long-term buffer from shakeups currently seen in the unpredictable airline industry.

The $4 billion American Airlines CU went into TIP territory with the understanding that it would be a slow and gradual growth, said CEO Angela Owens. The credit union kicked its new charter into high gear in 2004 with the goal of adding 10,000 new members. The 8,000 members that have since joined is consistent with AA Credit Union's expectations, Owens pointed out.

“Part of the reason [for the charter change] was to move ever slightly to include air transportation employees and still allow for leverage of our brand without changing the fundamental operations,” Owens said. “It plays to our strengths as well.”

Indeed, the credit union has a 72-year bond with American Airlines and has no intentions of cutting ties from one of the world's largest carriers, Owens said. Roughly 200,000 of its 210,000 employees are former and active AA employees. Several board members are AA pilots.

“AA has such a strong brand. For the most part, we see that it as an entity that is true to the core,” Owen said.

Since AA Credit Union's TIP charter, much of the focus has been on getting the word out to the vast air transportation industry that there is another financial service alternative, Owens said. The message continues at all 43 branches with a special concentration in the Dallas and Ft. Worth area.

Since the Sept. 11, 2001 attacks, the airline industry has had its share of turmoil. Bankruptcies and layoffs continue to plague a number of carriers. The latest string of airline shutdowns has resulted in thousands of unemployed staff. Aloha Airlines FCU is looking at a possible overhaul of its image following the bankruptcy of its primary sponsor, Aloha Airlines. Across the country, credit unions with airlines in their SEG fields are working to help laid off employees.

“We've participated in recall of pilots. We do watch our membership to see if they've been impacted by bankruptcies,” Owens said.

Just recently, credit union staff stepped up to help AA employees with extra food and water during the time the airline cancelled thousands of flights: “We spent a lot of money at Costco.” A team of volunteers helped frazzled and stranded passengers run tickets. The collaboration opportunities that the TIP charter has provided are another outcome that has proved promising.

“AA and American Eagle [a subsidiary] are still core membership but TIP allowed us to grow and we plan to continue along that path,” Owens said.

During discussions on a potential expansion, the $600 million Clearview FCU considered a TIP charter but ultimately felt a community charter would be the best move. Under a different moniker, Clearview was chartered in 1953 to serve Allegheny Airlines. In 1979, both the airline and credit union changed its name to include USAir.

Since a charter change and a name change to Clearview in 2004, the credit union has opened eight branches and added 15,000 members, said Christianne Gribben, assistant vice president of marketing. Most of the membership growth has come from areas around the branches and through indirect lending. Seventy percent of Clearview's 73,000 members live within a three- to five-mile radius of a branch. The two-prong approach is to make the branches convenient for existing members and expand into areas that fit with Clearview's demographic. Two branches currently under construction are scheduled to open later this year and in 2009.

“We're enjoying the community charter and embracing all that it presents,” Gribben said. “We're not looking back.”

In the past, prior to Clearview's community charter, news like the announcement from Delta Air Lines and Northwest Airlines on its merger plans would have sent the credit union behind closed doors.

“There would be a meeting and we would have to do some things,” Gribben said. “Now, it's a lot easier for us to stay focused on our goals. The fluctuations don't affect us as they did in the past and we have control over our destinies.”

–msamaad@cutimes.com

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