Closure not option for employees’ credit union

The Commonwealth Government Employees’ Credit Union is firm in its stand that despite the agency’s revenue shortfall, closure is not an option.

Board chair Angel Hocog disclosed this to Saipan Tribune while admitting that the union is now seeking financial assistance from the NMI Retirement Fund, which is the main source of the program’s $2 million operating fund.

The union recently wrote the Fund asking for additional $500,000 loan for the program’s continuity and expansion. This request has been discussed by the pension agency which decided to inquire more information and details about the program’s operations before a decision is made on its request for refinancing.

Fund officials disclosed the union diligently paid its monthly obligation on the $2-million loan it made in 1996 until it recently fell behind due to a significant drop in its revenues. The union did not disclose its revenue losses in its Dec. 15 letter to the Fund. It was disclosed, however, that besides the $500,000 additional loan the union is seeking a lower interest rate for the additional investment.

Hocog, in an interview with Saipan Tribune, cannot immediately say how much “losses” were incurred by the union or the current number of its members. He referred this reporter to the union’s acting general manager Ruth Ann Sakisat, who later refused to disclose any information about the union.

“We are currently preparing our proposal for the investment loan refinancing request with the NMIRF. The information you are inquiring are part of the refinancing package which we are presently in the process of gathering, evaluating, summarizing and reporting to the board of directors,” Sakisat told Saipan Tribune in an email, adding that the union cannot respond at this time on the media inquiry about the program.

According to Hocog, the drop in the program’s revenue was also a result of the austerity measures implemented by the central government. The chairman said that membership could only increase if more employees are hired in the public sector.

“You have to remember that the government employees are the union’s clients, the less employees enroll, the less business we get. And because of the austerity in the government, many employees withdrew their savings which caused the decrease in our numbers,” he explained.

He said the union pays roughly $10,000 monthly for its $2 million original loan to the Fund. At present, more than half of the obligation has been fulfilled.

Citing other factors, Hocog also believes that because of the present financial hardship being experience by employees, even raising $50 to open an account with the union has been very difficult for some employees at this time. “With their reduced work hours, employees are really struggling to meet all their needs. It is also one reason why they come to us [and apply for loan],” he added.

Hocog said the refinancing package is only one the options being eyed by the union to ensure the continuity of its program. The union is a non-profit government corporation formed in February 1995 through legislation.