EDS Credit Union of Plano, Texas, which took over insolvent Ensign Federal Credit Union of Henderson on Friday, intends to retain Ensign’s 33 employees and its four branches, a credit union executive said Monday.
“We are looking to attempt, whenever possible, to retain everyone,” said Diane Gerstner, executive vice president of the Texas credit union.
Ensign was working with a skeletal staff, and EDS likes to employ more workers at its branches, she said.
In addition to keeping the four existing Ensign branches, EDS will try to reopen the former Ensign branch at 6265 S. Rainbow Blvd.
EDS typically is open to individuals, who live, work, worship or attend school in a 10-mile radius of its branches.
The Texas credit union is in discussions with the Nevada Financial Institutions Division about what its field of membership will be in Nevada beyond the 7,900 former members of Ensign, Gerstner said.
Ensign’s members belonged to The Church of Jesus Christ of Latter-day Saints, but the church didn’t operate the credit union. The first credit union in the country, St. Mary’s Bank, was established in New Hampshire in 1908 and most early credit unions were affiliated with churches or parishes, said John McKechnie, director of public and congressional affairs for the National Credit Union Administration.
All of Ensign’s members deposits were under the $250,000 limit for federal insurance, and they will continued to be insured by the federal government.
EDS, a federally insured credit union with 57,000 members in 50 states and 24 foreign countries, saw buying Ensign as a way to expand its presence in the West. In May, it acquired First American Federal Credit Union in Santa Ana, Calif.
Electronic Data Systems or EDS, the company founded by Ross Perot, is now part of Hewlett-Packard and has employees in California. Some of these workers belong to EDS Credit Union.
Ensign “is a wonderful organization, and it was and will continue to provide excellent service,” Gerstner said.
Ensign was insolvent with negative net worth of 1.2 percent or $1.2 million by Sept. 30, the end of the third quarter. Ensign lost $10 million in the first nine months of this year because of loan problems.
Ensign made business loans and offered a variety of business services, but the credit union’s failure resulted from the general downturn in the economy, not because of problems in any single customer segment, Gerstner said.
“It was the economy in general, the loss of jobs” that led to financial woes at Ensign, she said.
EDS is “very conservative” in making business loans and will focus on consumer financial services, she said.
Ensign was the 13th federally insured credit union liquidated this year. In Nevada, Ensign became the fourth ailing credit union to be taken over with the assistance of state and federal regulators. All four were merged with out of state credit unions.
The trend is reminiscent of the 1980s in Texas where the collapse of oil prices wiped out many major banks, and out-of-state banks replaced them. So far, local banks have acquired the deposits of three failed banks, another was liquidated and a Nebraska bank acquired the fifth bank to fail since July 2008.
Contact reporter John G. Edwards at firstname.lastname@example.org or 702-383-0420.