Continental Federal Credit Union has seen an increase in loan workouts and debt restructuring as a result of Continental Airlines' troubles, including the 1,700 job cuts the carrier announced today.
Roughly two-thirds of the credit union's 26,000 member base are Continental Airline employees and their relatives, said Tom Martin, president/CEO of the $182 million financial institution. Continental FCU is offering temporary interest rate reductions, 0% share certificate loans and advice for those considering filing for bankruptcy. The good news is members are increasingly willing to work with the credit union rather than ignore their debts, he added.
While Continental FCU's trade, industry and profession charter allows it to serve the entire airline industry, the field of membership has some drawbacks.
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"It does leave us a little bit vulnerable given the industry we are in," said Martin, who took the helm at the Tempe, Ariz.-based CU in March. "Our long-term hope is that the industry rebounds and members are able to regain employment."
Continental Airlines reported a second quarter net loss of $213 million. The company said it will have to cut 1,700 jobs. This is in addition to the previously announced elimination of 500 reservation agent positions. Continental FCU also serves US Airways, which recently announced it would eliminate 600 jobs.
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