May 3, 2010

To: Members of First Class Credit Union

From: Kent Strawn, President/Manager, First Class Credit Union

Subject: Sioux City Branch 

    Your Staff at the Credit Union in Sioux City are top notch employees dedicated to the First Class Credit Union and our members. They were informed at the end of March the Board of Directors and Senior Management team had reluctantly come to a very tough decision. Due to many new legislative regulations and the slow recovery of the economy; we came to the conclusion we had not met our goals nor could we continue to spend our member’s money trying to develop the Sioux City branch. We have decided to close the branch. The final day that branch will be open is July 14, 2010.

 

    Iowa Postal Credit Union and Sioux City Postal Credit Union merged in the year 2000. Our hope was to be able to engage with the Postal Employees and their families in Sioux City to grow a credit union to serve Postal Employees and their families in Iowa. We soon found ourselves in a position of having to make a decision on moving our facility, and we invested over $700,000 in a building to serve our members. When we made that commitment to Sioux City we knew we needed to expand our market to get the organization to pay for our presence in this area. We expanded our field of membership to allow us to reach out to the community and moved into a lending service in the Sioux City area which did not ultimately meet our expectations. 

 

    While our loan portfolio did grow, the overall credit union has not grown materially and continues to challenge us to take chances and risks which we can not continue in the future. Today, we are a strong credit union with over 10% in reserves but tomorrow very well could be a different story for us if we do not take proactive steps such as consolidating our organization. Your Board and the Management team believe the future will present many challenges to our traditional stream of income by limiting the amount of fee income we can use to cover our overhead; and we further believe the economy has dealt a blow that will take many years to recover from. Closing the Sioux City office is just one of the many steps we have taken to ensure a secure future for First Class Credit Union. 

 

    Though you may retain your account with First Class Credit Union, we do understand the convenience of having a local branch. Should you choose to move your accounts, we sincerely hope you choose an Iowa Credit Union. You may find a list of all Sioux City area credit unions by visiting www.iowacreditunions.com.

 

    Over the past several years, we have worked with The Municipal Credit Union and they have agreed to open their doors to members of the First Class Credit Union in Woodbury and contiguous counties. While this is a different kind of partnership it is one we believe is a continuation of the credit union philosophy of people helping people. 

 

    After July 14, 2010, The Municipal Credit Union will no longer act as a shared service branch in Sioux City.

 

    Because The Municipal Credit Union wants to welcome you with open arms, they will be running loan promotions you’ll hear about in a letter coming to you in the next couple weeks. 

    If you currently have a loan through First Class Credit Union, you may continue to pay your loan payments just as you do today. If you have any questions, please feel free to contact us at 1-800-392-7122. 

    Thank you for your understanding, and if you have any questions, please don’t hesitate to call us at 1-800-392-7122. 

           

Sincerely,
Kent Strawn, President/Manager



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For a .pdf of the letter written above, click here

For a .pdf of the Press Release, click here