Silver State Credit Union to close branches

Silver State Schools Credit Union, one of Nevada's biggest credit unions with 80,000 members, on Thursday said it will close five of 21 branches to cut expenses.

The branches employ 30 of Silver State's 266 workers. However, Silver State Chief Executive Dave Rhamy said in an e-mail that he hopes to keep some of the affected workers by assigning them to vacant positions. The branches, including three in Southern Nevada that have 18 workers, and two in Reno, will be shut on June 4.

Closing the five branches will save $1.1 million this year and $1.6 million next year, Rhamy said.

Silver State also confirmed that it entered a consent order with the Financial Institutions Division on March 22. Silver State on Thursday provided the Review-Journal with a copy of the consent order, which requires the credit union to satisfy unspecified obligations and submit unspecified documents. Most of the substantive requirements in the order are mentioned only by reference to a November financial exam report.

Rhamy said he was prohibited from disclosing the November report and a spokesman for the Financial Institutions Division also declined to provide a copy of the exam report.

The $823 million-asset credit union lost $50 million in 2009.

American Share Insurance, the Ohio-based mutual insurance company, underlined the financial struggle at Silver State in February when it disclosed a $22 million loan to Silver State. The credit union said it is allowed to treat the loan as additional capital.

"Additional belt-tightening is needed," Rhamy said in an open letter posted on the credit union's website. "Our commitment is that Silver State Schools Credit Union will emerge stronger than ever (after the recession ends)."

The credit union may face a new challenge later this year, because many of its members teach for the Clark County School District. The district is switching back to nine-month school years from year-round school at 76 locations.

The typical classroom teacher only works nine months yearly, district spokesman Michael Rodriguez said. However, some teachers with specialties such as art and reading instruction were working 12 months each year.

These specialized teachers may see their incomes fall up to 18 percent next year with the end of 12-month school. Rodriguez didn't provide an estimate of the number of teachers who face a cut in annual pay. Teachers typically sign up to work 184 days a year, but some specialists can contract for up to 41 additional days.

The credit union already has provided relief to members who suffer from lower income. Silver State has reduced payments and interest rates of 1,200 home and car loans so members with reduced income may keep making payments and retain their homes and vehicles, Rhamy said.

Silver State lost $8.5 million in the quarter ended March 31, but Rhamy said the net loss has been declining in the last nine months.

Members seem to be remaining loyal to Silver State despite news reports on the institution's financial woes. Deposits declined by $6 million, or 0.8 percent, over the last three months to $755 million, Rhamy said.

The Southern Nevada branches marked for closure are at 1807 W. Craig Road in North Las Vegas, 2910 Bicentennial Parkway in Henderson and 11720 W. Charleston Blvd.

Contact reporter John G. Edwards at
jedwards@reviewjournal.com or
702-383-0420.