United Airline Employees CU Considers Cutting Single Sponsor Tie

CHICAGO – With its parent company in Chapter 11 bankruptcy, the $4 billion United Airlines Employees’ Credit Union said it is looking “as an option” abandoning its single sponsor structure, adding business SEGs and pursing possible mergers in 2003. The move to consider “diversification” in its field of membership comes as the CU acts to shore up its loan portfolio with payment assistance and new insurance programs on mortgages and home equity for furloughed employees of the airline. At the same time, the CU has launched an aggressive campaign through its Web site and marketing communications to assure its 165,000 members of the CU’s financial soundness “and stability” as well as its arms-length ties to the airline. Member growth in 2002 dropped to 2% year down from the 10% average pre-Sept. 11 and now the CU needs to “look at new opportunities” to grow, said a spokesman. The introduction of loan insurance programs is “something we decided to do to reduce risk,” explained Frank Weidner, senior vice president of member services adding “We’ve long had high quality in our loan portfolio with our charge-offs at 23 basis points.” The challenge for the CU in dealing with the impact of its parent company’s bankruptcy filing comes as it continues a search for a new CEO to replace Robert Bream who resigned in August. Weidner said a search team of the board expects to come up with a replacement “in the first quarter, perhaps by February.” Serving as acting president and CEO is Donna Fridrych, a long-time member of the board and a retired reservation executive with the airline.