2009 SCE FCU Annual Report

Credit Union Supports Members Amidst the Recession

Jun 03, 2010 | Annual Reports

2009 SCE Federal Credit Union Annual Report

The country eased into 2009, still reeling from a year of significant economic chaos. Amidst brief glimmers of hope, there were many telling economic signs that the struggle was far from over and that the recovery would be slow and marked by painful setbacks.

  • Cigna, Caterpillar, Pfizer, Allstate, Starbucks and Home Depot announced large workforce cuts in January

  • The Dow Jones average fell 14% between President Obama’s election and inauguration, the biggest decline ever for an incoming President

  • Unemployment climbed from 7.2% in January to 10.2% (nationally), and by year end there was no definitive sign that the ascent was over. California’s rate was higher at 12.3% by year end

  • Congress responded by extending unemployment insurance and COBRA. The extensions continued well into 2010

  • Personal bankruptcies increased 34% in January

  • Bank of America stock tumbled to a 25 year low in February

  • Fannie Mae requested $15.2bn from the Treasury after its 6th quarterly loss

  • Citi got another rescue in a $25bn preferred swap; stock fell below $1 on March 5

  • Freddie Mac requested $30.8bn in Treasury Aid in early March

  • US credit card defaults rose to a 20-year high in March

  • The Dow fell below 7k in March, the lowest close since 1997

  • In May, Congress continued its stimulus programs with Cash for Clunkers. The credit card reform bill followed on May 20

  • Foreclosures climbed 32% and mortgage delinquencies rose another 9%

  • Injecting a ray of hope, the FOMC minutes in July included a prediction that the recession would end in the second half of 2009

  • The House introduced the controversial healthcare bill in July, escalating concern over personal, corporate and national expense implications

  • Stocks rallied at the beginning of July and then slumped to the lowest level since May 1 a week later, demonstrating just how volatile the market was. On July 23, the Dow passed 9k for the first time since January. On October 14, the Dow crossed the 10k mark for the first time in 2009

  • The FOMC left rates unchanged at 0.25% for the entire year. In September, Bernanke said the recession was very likely over. On December 7, he stated that the economy was in better condition but still faced formidable headwinds

  • On December 16, the House passed a $75bn jobs bill as the government continued to pour money into the economy

At SCE Federal Credit Union, we knew that 2009 would be a tough year as we dealt with the economic recession and worked to find ways to help our members cope with their personal financial challenges. We worked with many of you individually to keep you in your homes and help you to retain your vehicles. Loan terms were modified for over 200 mortgages, HELOCS, 2nd mortgages, autos and RVs. Many of you were focused on saving, so we introduced a green, dividendearning checking account in July, with no-cost identify theft protection and restoration services, free debit rewards, free ATM withdrawals and no monthly fees with direct deposit and estatements. We also planted a tree with American Forests in your honor if you opened a new green checking account. You responded with enthusiasm and we opened over 1,100 accounts, with close to $10 million. We introduced our Visa picture card, and mobile banking in late summer and early fall, and both were well received.

Total shares grew to $391 million, one of our best years ever. Loans declined from $283 to $271 million as many of you paid off your debts and opted to save more due to the uncertainty in the job market and the weak economic recovery. Our significant share volume put us in an excellent position to launch a very popular vehicle loan promotion in early 2010 at very low rates. In a banking environment where credit is tight, your Credit Union is always ready to assist you with your lending needs.

Of the $3.2 million expense that we had to contribute to replenish the National Credit Union Share Insurance Fund (NCUSIF) for the collapse of the corporate credit union infrastructure in 2008, $2.6 million was returned to us in 2009. This infusion helped our capital position to improve from $41.5 to $42.7 million. Some of the funds were set aside in our Allowance for Loan Loss account, which protects the Credit
Union from potential loan losses that occur when members default on loans or face difficulties so severe that even loan modifications can’t resolve them. We are reporting a net worth of 8.81%, still well above the well-capitalized rate of 7%, as determined by the National Credit Union Association, our financial regulator.

Our Foundation contributed over $15,000 in charitable contributions throughout our local communities, and facilitated 77 financial education workshops, reaching a total of 1,527 participants. As part of a nationwide initiative that provides special incentives to teach students to save, the Foundation launched a special America Saves campaign for students.

Although 2009 was difficult for many, we see light at the end of tunnel and believe that 2010 will provide more hope and opportunity for our members. As your financial partner, we are always looking for new ways to help you meet your financial needs and goals, and encourage you to come to us and let us play a role in your success.

To our members
who are benefiting from our competitive services and prices, we thank you for participating in your cooperative. We encourage you to introduce a friend to benefits that you enjoy at SCE FCU.

To our volunteers
on our Board of Directors, Supervisory Committee and other Board Committees, we thank you for your time, your energy, your inspiration and your commitment to our success.

To our employees
who not only work hard to serve members but also believe in serving the community, we thank you for contributing 550 volunteer hours in 2009 with a wide variety of local organizations.


2009 SCE FCU Annual Report (PDF)