PASADENA, Calif. — Wescom's announcement today to close 11 branches and reduce operational staff is part of the $3.8 billion credit union's strategy to weather the economic struggles that aren't leaving Southern California anytime soon, said President/CEO Darren Williams.
Despite the news, Wescom's 2nd quarter financials show some positive signs. The credit union gained net worth and reduced net losses by half from 1st quarter, and Wescom has always enjoyed a robust net margin. However, Williams said he's prepared for continued delinquencies among his community field of membership.
"My first job in consumer credit was in the late 70s, and back then, the prime rate was 20.5%. Today, people can't even believe that actually happened," Williams said. "But in my 30-year career, we've never seen anything like this. I don't see loan losses declining significantly over the next 6 months, and I think our members are in for tough times ahead."
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Resets are adding as much as $900 to monthly house notes, and gas prices are also a big factor, with some Wescom employees paying an extra $350 per month in gas to commute to work, he said.
"I've seen some cases where people have literally decided it doesn't make sense to commute and pay child care costs, especially when you factor in the non-financial impact, like time spent on the freeway each day," Williams said.
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