ArrowPointe Federal Credit Union
By Joyce Moed, Reporter

LANCASTER, S.C.–While the current economic climate is a challenge for most financial institutions–regardless of their size, ArrowPointe Federal Credit Union here says there are additional challenges for smaller financials.

"Because of our size, we have fewer people to deal with the added pressures and workload that the economy is dealing us right now," said Tim Lyda, CEO for the $95-million credit union.
Lyda added that the economy "is dealing us a blow to the bottom line with lower rates on investments."

"With the other concerns in the market, we are wary of the investments we are being shown by the brokers," he noted.

Lyda said that another challenge the 12,000-member credit union has is that its members are reluctant to enter into larger lending transactions because they are unsure of the future and "loathe to obligate future income."

Decreased loan volume means less growth and income, Lyda said. He also says that delinquencies are rising–mainly job-related, "which will ultimately filter to the bottom line through higher credit losses."

"However, I'd argue that the size of the credit union doesn't matter, and that all are seeing some or all of the same problems in their operations," Lyda said. "They just have more specialized employees to handle things as they arise."

In response to these challenges, Lyda admitted that ArrowPointe FCU may not be as pro-active as it needs to be.

"Not from a lack of effort," he stressed, "but rather a sense of helplessness in knowing exactly what to do. Since all of this is a first for the economy in general, everyone is in the same boat."
The credit union has increased its marketing, and has created special fliers that get inserted into pay envelopes to let employees know it is here to help.

As for the CU's members, Lyda said many have expressed concerns over the economy.

"And a few have questioned their insurance limit and how to best leverage accounts and account structure to increase that coverage," he said. "We have not had one member to withdraw their funds because of the problems but have received funds that they did withdraw from other institutions–nothing different than other credit unions are facing I'm sure."

In hopes of not creating panic, ArrowPointe FCU has stated that they are same today as they were yesterday, last year, and even five years ago, Lyda said.

"We are strong," he said. "We have great capital. We have money to lend and withdraw. We then work with them to satisfy their needs of additional insurance coverage or whatever."
Lyda does worry that smaller CUs may find it harder to stay competitive thanks to the current economy.

"And I fear that they will continue to dwindle with the passing years," he said.
ArrowPointe has had discussions with a $24-million CU, and a $200-million CU in its area about helping each other by sharing resources to lower costs.

"There are certain functions that we all do–like buying copy paper, pens," he said.