Single Sponsor CU Being Cut Loose by its Sponsor

SALEM, Ore. – A $1.6 million single sponsor credit union has been forced to merge after its sole sponsor has ended its sponsorship of the CU. Orville Roth, the founder of the Roth’s grocery store chain, helped found the now $1.6 million Roth’s Employees FCU as an employee benefit in 1973. Just over 32 years later his son Michael, who runs the company now, withdrew the store’s sponsorship and demanded the credit union vacate the space it occupied on the second floor of one of the chain’s stores by Dec. 31. An article in the Statesman Journal quoted Michael Roth as blaming the credit union’s small size and location for the CU falling out of favor. “It didn’t have the critical mass to compete with the credit unions that are on every corner,” the paper quoted him as saying. Roth’s declined to take any questions about the credit union. The credit union has 948 members or just about 50% of the store chain’s employees and was very popular with the employees according to Shirley Arends, the credit union’s CEO for 14 years who said that her desire to retire had sparked a dispute with Roth’s that wound up with the credit union losing its sponsorship. “I was manager here because I believe in the credit union and not because of the money,” Arends said. “So when it got to be time I would like to move on it was hard to find someone else who would be willing to work for a comparable salary.” The credit union’s call report showed that the CU had two employees, one full-time and one part-time, and that the CU was paying out $58,000 in salary and benefits per year as of June 2005. The search for someone with an accounting background to take Arends’ job led to some interest from a bookkeeper for the credit union and that, Arends said and Roth’s confirmed for the Statesman, is when things got hot for the credit union. Unbeknownst to Arends, Roth’s considered the credit union a vendor for the purposes of a policy which prevented vendors from offering employment to any Roth’s employees. So when the credit union let the Roth’s leadership know that it was considering the bookkeeper for the job, Arends said the grocery chain’s leadership had become so highly angered it wouldn’t back off its decision to end the relationship with the credit union, even when both the credit union and employee backed off the possible new hire. The credit union is being forced to merge, Arends said, because its limited assets prevent it from being able to get space outside of its sponsor’s location. Members are scheduled to vote November 8 on the proposed merger with the $9.6 million IBEW/SJ FCU which has multiple SEGs. [email protected]