Member Q&A – Part 1

By
Mike Mastro
– July 2, 2010Posted in: CU Industry, News
Recently, I approached our staff and asked what questions some of our member’s have been asking when coming into the branch and over the phone. The response I got included...

Recently, I approached our staff and asked what questions some of our member’s have been asking when coming into the branch and over the phone. The response I got included some of the following questions you or your colleagues were asking:

Why can’t you pay higher dividends on term certificates?

Are you doing loan modifications?

Why is the Credit Union initiating a fee for business accounts?

These are all very good questions and I hope giving you direct answers will provide some comfort in knowing that we are working very hard on behalf of the organization and the membership.

In terms of the rates we are paying the membership, we of course must earn a spread over our dividends to cover operating expenses. We are currently earning 25 basis points (1/4 of 1%) in our daily account with the Federal Reserve. And our yields on our conservative investments (Treasury issues/Federal Agency issues, etc.) have also fallen. In addition, members are borrowing less due to their own needs to pay down debt (deleverage). Due to economic conditions and the very low rate environment (the lowest in recent history), it is challenging to earn higher rates and pass them on to you. We remain very competitive and typically pay much higher rates than most banks and credit unions. It should also be noted that the Credit Union remains focused on reducing expenses (over $1 million in lower operating expenses in 2009-2010) in order to have greater capacity to pay higher rates. Another option we have for our membership is FIREHOUSE Financial which can also help you put your money in safe interest bearing financial instruments.

We do many loan modifications as well as loan extension agreements. In the past, we were challenged due to regulatory restrictions, but now we evaluate each member’s situation and if appropriate, we will do a loan modification, extension, and in many cases consolidations. If you are in financial distress, please call our loan department.

In terms of fees, as you know, we have tried very hard over the years to keep fees low or non-existent. However, in most instances we need to be able to manage our costs related to the service we are providing. We will remain competitive as it relates to the market, but changes to fee structures although fairly rare do occur.

  • meber-q-n-a-2 Member Q&A – Part 2
    13 September 2010 4:14 PM | No Comments

    Here are a few more questions members have been asking. Why are you now asking for more identification when I call or come in? The Patriot Act was introduced in...

    Read More
  • group Not for Profit-Not for Charity-But for Service
    06 May 2010 2:17 PM | 9 Comments

    Dear Members — I have reactivated my blog to engage in an open conversation with you to provide information, answer your questions, and keep you up to speed on Credit...

    Read More
  • 815-colorado-building LAFCU: Serving firefighters and their families for 76 years
    16 November 2011 8:43 PM | No Comments

    Hello! Today, we are celebrating the 76th Anniversary of the beginning of Los Angeles Firemen’s Credit Union. I am sure that our founders never envisioned the size and scope that...

    Read More
Mike Mastro

About Mike Mastro

Mike Mastro graduated from California State University Northridge in 1975 with a bachelor's degree in both Accounting and Finance. In 1975, he began his professional career at City National Bank where he performed the role of Trust Investment Analyst. In that role, he performed financial analysis on the financials of publicly traded corporations to determine their suitability for inclusion in the portfolios of the bank's various client pension and profit sharing accounts. In 1978, Mike assumed the CFO responsibilities for Ralph's Grocery Company Credit Union where he managed and oversaw the accounting and investment activities of the credit union. He also developed and implemented the credit union's certificate of deposit program. In 1980, he assumed the role of "controller" at Los Angeles Firemen's Credit Union where he oversaw accounting and investment activities and was instrumental in developing new credit union products and services. In 1992, he was promoted to President/CEO of LAFCU. Today, Los Angeles Firemen's Credit Union exclusively serves full time, paid, professional firefighters and their families throughout the State of California, has over 29,000 members, and assets over $800 million.