Govt employees’ credit union seeks $500K infusion to survive

Due to a large drop in revenue, the Commonwealth Government Employees Credit Union is seeking an emergency infusion of funds in order to generate new monies for its operation.

NMI Retirement Fund board chair Sixto K. Igisomar and administrator Richard Villagomez disclosed that the pension agency has been approached by the union asking for an immediate infusion of $500,000 so it could continue its lending program.

Saipan Tribune learned that credit union has asked the Fund to allow it to refinance its existing loan so it could avail of the needed amount.

The credit union is one of the four local investments of the pension agency.

According to Villagomez, the Fund loaned the union $2 million in August 1996. He estimates that about half of the loan has been repaid.

Because of the current financial state of the pension agency, Villagomez said the Fund cannot readily agree to the union’s request pending a clear analysis of how much the Fund would earn if it further invests in the union.

In a Dec. 15, 2011, letter to Villagomez, credit union acting general manager Ruth Ann Sakisat said they are behind in remitting their loan payment to the Fund since September 2011 because of a significant drop in union revenue. She did not elaborate on this in her letter.

“We would like to request the NMIRF’s assistance in further investing with us through the refinancing of our existing loan for $2 million at a lower interest rate, possibly at 5 percent for another 30-year term with at least $500,000 of new funds for our lending program,” said Sakisat.

She urged the Fund’s immediate action, saying the credit union’s existence will depend on the infusion of new funds to expand its lending program.

The Fund’s board of trustees discussed the union’s request during Friday’s regular meeting but put off making any decisions until all its questions are answered.

Igisomar instructed Villagomez to work with the union and ask for more information. The board expects Villagomez to provide an analysis and evaluation of the union’s financial standing for discussion.

Villagomez told Saipan Tribune yesterday that in order for the Fund to consider the union’s request, an analysis is needed showing how the additional $500,000 would reduce the union’s losses and how much the Fund could earn from the additional investment.

For Villagomez, credit unions are only as strong as its membership, so the CGECU needs to boost its membership to survive.

Sakisat declined to comment on the matter yesterday, pending a response from the Fund.