United Airlines ECU Sheds Single Sponsor Status with Chicago Suburb Expansion

CHICAGO – United Airlines Employees’ Credit Union, which once epitomized the single sponsor structure, has joined a growing list of CUs rapidly expanding their field of membership and reaching out to a broader cross-section of individuals and occupation groups. The $4-billion Chicago-based credit union insists it remains committed to the parent sponsor and affiliated companies in serving employees and families, but at the same time it is partially shedding its single sponsor mantle to offer membership to 250,000 households in 19 Chicago suburbs near O’Hare Airport. The Illinois Department of Financial Institutions actually approved the community charter expansion in February and last month allowed the CU to add new SEGs, the Homeland Security Transportation Administration and SeaTac International Airport in Seattle. “With our corporate sponsor enduring financial challenges, we must look toward the future and identify additional segments where our services would be valuable,” said Frank Weidner, senior vice president-member services, in a prepared CU statement emphasizing “membership diversification.” While acknowledging single sponsor definitions have indeed become cloudy in recent months, a spokesperson for the CU maintained that management is still reviewing the single sponsor status, adding “we don’t really address that issue either way so I’d rather not make that a focal point.” Any number of single sponsor CUs across the U.S. with NCUA’s blessing have changed their name, adopted community charters, added SEGS or new residential areas to their FOM. A notable one occurred last January when Motorola Employees Credit Union-West of Scottsdale, Ariz. became TruWest Credit Union, ending a 50-year tie to its parent, the Schaumburg, Ill. semiconductor manufacturer UAECU, the nation’s sixth largest CU whose parent sponsor went into bankruptcy last December, revealed its plans then to consider a name change, add SEGs and look at possible mergers during 2003. It was suggested the CU might be making more announcements regarding future possible expansion in the weeks ahead “since we have a new president who is getting his feet wet,” said the CU spokesperson who added she could not provide further details. In April the CU hired David W. Mooney, senior vice president at J.P. Morgan Chase & Co., New York, as its new president, CEO and treasurer, taking over May 12. He succeeded Robert Bream, who resigned in September 2002. Board Chairperson Donna S. Fridrych served as interim CEO. UAECU’s statement on the 19-city expansion stressed that “the new membership development strategy is to diversify around the credit union’s existing infrastructure and does not represent a philosophical change.” Its headquarters and “public access branch” at O’Hare “makes this an ideal district for new opportunities.” In addition to the suburban communities, the CU “is also approaching additional select business groups” which it did not identify. The Department’s FOM approval includes “individuals who work or reside in communities within a five mile-radius of its three Service Center branches located near” the airport. Without actually mentioning the bankruptcy filling, the CU said that “although diversification is an important step, we also take our responsibility very seriously to assist any current members encountering financial hardship with a number of tailored assistance programs.” Regarding single sponsor status, executives at peer CUs around the country concede FOM expansion, taking different forms, has eroded definitions creating a moot issue. “With retirees, their family members and their children made eligible and companies spun off from the sponsor, the truth” of the definition of single sponsor has “certainly been broadened” at many CUs, declared John S. Tippets, the president and CEO of American Airlines Credit Union. AACU, he said, remains a single sponsor with no SEGS, but it has over the years broadened its reach to include those same family and corporate related firms. “But we are interested in TIPs,” he said, referring to NCUA’s new FOM occupational designation, “Trade Industry Professions.” NCUA officials noted that airline CUs have been among the most eager to taking advantage of TIPS and supported NCUA’s FOM change on TIPS. -