TOPEKA, Kan. –Another bank failure, this one in Topeka, led Kansas credit unions to step up their safety and soundness campaigns.
For one, the $113 million Educational CU of Topeka quickly used its Web site (www.educationalcu.org) to assure members and the public that their funds were safe in a CU and that the industry has shied from out-of-market "speculative deals" common in bank collapses.
In a letter to members regarding the Aug. 22 failure of the $752 million Columbian Bank & Trust, Gavin A. Wittman, president/CEO of Educational, wrote, "with the news of Columbian Bank closing, it is natural for there to be questions about your investments with other banks and more specifically with ECU."
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"I want you to feel 100% comfortable," wrote Wittman, "that Educational Credit Union is not only healthy and growing but is actually enjoying one of its strongest years of performance."
He added that CUs like his "invest in you, our members, not in speculative deals in other parts of the country."
Columbian, which at its closing had $92 million in bad loans, was taken over by a Chillicothe, Mo., bank in an FDIC-engineered purchase-assumption transaction.
Meanwhile, the $156 million Kansas Super Chief CU of Topeka said last week in the wake of Columbian that it would speed up the start of a radio and print ad campaign concerning safety and soundness and deposit insurance. It will also be suggesting that the public should be looking at KSCCU as an alternative financial institution.
"This is really an opportunity for credit unions to tell our story," said Jessica Stormann, vice president at KSCCU, which three weeks ago had posted a safety and soundness message on its Web site (www.ksccu.com).
Stormann, who heads up business development for KSCCU and is also a director of the Kansas Credit Union Association, said CUs can reinforce the message that they are viable institutions that place care of member funds above profits.
KSCCU, she said, like other CUs posted extensive deposit insurance information on its Web site after the July collapse of IndyMac Federal Bank in California, which was followed up by the failure last month of a large Reno bank with branch operations in Arizona and California.
The collapse of Columbian was the ninth bank failure this year but was the first in Kansas since 1993.
"The choice of a financial institution is an important one," wrote Wittman of Educational adding that, "based on many factors, we at ECU truly believe that you can find no better solution than the products, services, staff, strength and safety of Educational Credit Union."
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