Iowa’s Largest Credit Union Lays Off Employees
GreenState CU blames market corrections and rising interest rates for employee retrenchment.
Iowa’s largest credit union has recently laid off 42 employees because of “market corrections and rising interest rates.”
“This action was necessary due to market corrections and rising interest rates currently taking place that have a direct impact on GreenState’s operations,” GreenState Chief Marketing Officer Jim Kelly said in a prepared statement. “The employees impacted by this move have been given a severance package, as well as extended insurance coverage.”
Before the layoffs, the $10.6 billion credit union posted 761 full-time employees and 14 part-time employees, according to its NCUA Call Report for the second quarter.
Most of the labor cuts occurred in GreenState’s mortgage lending or commercial banking operations.
Kelly added there are “no immediate plans for further layoffs.”
He also said that the proposed acquisition of Premier Bank, which was called off in August, did not factor into the credit union’s decision to lay off employees.
“We still plan to be in Nebraska by the end of 2023,” he said. “In fact, we continue to look for locations in that market for our future branch network.”
Nationally, across the financial services industry, demand for mortgages has declined by nearly a third since last year because of higher interest rates.
Credit unions originated $72.5 billion in first- and second-lien residential loans in the second quarter, down from 14.2% a year earlier and down 1.1% from the first quarter, according to a CU Times analysis of the NCUA’s data. What’s more, first mortgages fell 5.3% from $58.1 billion in the first quarter to $55.1 billion in the second quarter.
In addition to GreenState, other financial institutions in the Hawkeye State have laid off employees, most notably Wells Fargo, one of the nation’s largest home lenders, which operates its mortgage division headquarters in Des Moines.
The bank’s mortgage division has laid off 372 employees from May to Sept. 14, according to Iowa Workforce Development. Employers are required to report planned layoffs to affected employees and the state agency.
Wells Fargo plans to lay off an additional 157 employees in Iowa by Oct. 25, for a total of 529 employees.
In its second quarter financial filings, Wells Fargo reported its home lending fell by 53% from a year ago.