NCUA Reiterates: NWA Federal Credit Union has `No Authority' to Pay Royalty Fees to Northwest Airlines

MINNEAPOLIS – NCUA says NWA Federal Credit Union doesn’t have to honor Northwest Airlines’ request for royalty and licensing fees for trademark usage. In a May 2 letter to officials at NWA Federal Credit Union, NCUA unequivocally reiterates that the credit union has “no authority to pay royalty and licensing fees” to Northwest Airlines “for the use of its own trademark” Northwest Airlines sent a letter to the credit union in March asking that the credit union pay the fees for the “free use of its logo and other company identifiers in NWA FCU advertising and promotions.” The airlines said it would be forced to evict the credit union from all of its properties if the fees, which NWA FCU President/CEO Paul Parrish said would amount to $6 million annually, weren’t paid. NCUA Region Five Director Jane Walters wrote the credit union stating that based on information provided by NWA, “Northwest has no right requesting compensation to serve this field of membership, nor is (the credit union) authorized to pay for access to serve eligible members.” Walters wrote to the credit union after receiving an email forwarded to her by Connie Luellen, a credit union employee. The email was sent by Douglas Thursby, a NWA FCU member, according to Walters’ letter. NWA is the largest credit union in the state with 115,000 members and $1.3 billion in assets and has had a 65-year relationship with Northwest. Nearly 90% of the airline’s active employees belong to the credit union. Since the announcement in late April that Northwest would not renew the lease and services agreements for several properties, NWA has received a number of emails and letters from members voicing their support for the credit union, said John Wagner, NWA’s vice president of marketing. “The members have been supportive of our stance,” Wagner said. On its Web site, the credit union advises Northwest employees to use “Northwest’s usual procedures for submitting comments or feedback” and “if you are represented by one of the union labor groups at Northwest, there are channels there you could also pursue.” “Beyond that,” NWA FCU writes, “the best support we could receive from members is the continued business we are fortunate to be trusted with on a daily basis.” Northwest Airlines Spokeswoman Mary Stanik continued to offer no comment on the royalty and licensing fee and whether the airline is still demanding that the credit union pay it. Parish said the use of the Northwest images on credit union materials such as checks and debit cards “has been the practice of the credit union since our founding in 1938 and we submit such uses to Northwest for their approval,” adding “Northwest’s management has consistently supported our use of those materials as a way to underscore Northwest’s impact on the community.” Meanwhile, despite the airline’s May 8 agreement to extend the July 5, 2003 subleases of several properties occupied by the credit union to March 21, 2004, NWA is moving forward in its search for other locations. When asked if credit union officials had held discussions about converting to a community charter, Wagner said “there hasn’t been any talk on converting.” -