NWA FCU responds to airline's claims in article

APPLE CREEK, Minn. (5/1/03)--Both sides say they hope to settle the issues over Northwest Airlines' decision not to renew Northwest Airlines FCU's office space and ATM agreements, and its challenge against the credit union's trademarked logo. However, the rhetoric hardened Tuesday, as the credit union attempted to correct statements the airline made Tuesday in its internal employee newsletter Newswire.

At issue are three claims by the airline: that it has provided "exclusive" access to the credit union to its employees, benefits for the credit union's employees, and "free use" of its logo and company identifiers; that the credit union posted a "profit of $20 million in 2002, a return far in excess of most commercial banks"; and the credit union's investment in new headquarters was "ill-advised."

In its response, which is posted on the credit union's Web site, the credit union says it pays market rates, which are determined by the airlines, for its leased space for offices and ATMs. "We have never asked for--or been offered--'exclusivity' in those leases or for any other 'exclusive access' to airline employees," says the credit union.

While the credit union's employees are on the airline's benefit plans, the credit union "reimburses the airline for 100% of the cost of those benefits--as determined by Northwest--plus pays an additional administration fee."

The use of photos of Northwest aircraft and other images on its checks, credit and debit cards and other materials has been the practice of the credit union since its founding in 1938. The credit union submits such uses to Northwest for approval, and for 65 years the airline's management "consistently supported our use of those materials as a way to underscore Northwest's impact on the community."

It also says the credit union, being "a not-for-profit financial cooperative owned by our members," doesn't have profits in the traditional sense but returns a portion of earnings to its members and a portion (10%) to reserves as legally required. "To have done otherwise would have been considered poor management and opened the credit union to regulatory criticism."

As to the new headquarters in Apple Creek, the credit union had outgrown its old building and was leasing additional space to house employees. After weighing the alternatives, "our member-elected Board of Directors concluded that constructing a new headquarters was the best option." The credit union also was able to get a much needed branch for members in the southern suburbs.

The airlines' Newswire reports the airline as saying it's confident a settlement will be reached (St. Paul Pioneer Press). In a letter to members on Tuesday, credit union President and CEO Paul V. Parish noted that sometimes the airline and the credit union "will differ on certain matters. We have always resolved such differences in the past and hope that we can continue to do so."