Losing Streak, Part 1

FAILURE = FAILURE

It shouldn't come as a surprise to anyone whose kept abreast of Priority One Credit Union’s financial performance in 2010 ended at a negative -$500,000. Evidently, the losses may be more than what President Charles R. Wiggington, Sr. can bare to deal with because recently he exclaimed, "That's last year and this is this year!" Evidently, he is neither prolific nor a wonderful orator. Nonetheless, the President is trying to deter attention from the massive losses that have occurred each year since 2008 and which were all caused by his gross ineptitude as President. 

And though he is partially correct that this is a new year and thus, the credit union begins with a clean slate, the pragmatist in us considers no profit to be no profit and indicative of failure. Sadly, no matter how much the President tries to spin the facts, failure is failure and can't be construed to be anything else. 

According to its December 2010 Monthly Income Statement, Priority One generates positive income in the amount of $85,358. Though clearly a positive, it proved insufficient to offset the amount of monthly losses occurring during earlier months in 2010. What's more, the credit union would have ended 2010 in the negative even without having to pay the NCUA assessment required under the Stabilization Act. 

The $85,358 was not due to a resurgence in business. The credit union's Monthly Income Statements confirm account closures increased during the months of October and November 2010 while loan funding decreased. The positive influx of money was the result of the following: 

• Closure of the Redlands and Valencia branches which eliminated more than $10,000 a month formerly paid to rent each location.

• Branch closures also eliminated the costs of paying utilities and maintenance for each location.

• The credit union also laid-off employees at those branches, thus reducing the amount spent by the credit union on salaries and benefits. 

• The credit union reduced salary and benefit payments in 2010 when they converted several full-time employees to part-time status. 

• Marketing and Business Development budgets were also dramatically reduced. 

President Wiggington has transformed Priority One into a credit union whose survival is dependent upon divesting resources and almost addictively, reducing spending. In the past, Training and Education Manager, Robert West, has said that "Loans are the business of any credit union." Surprisingly, he is correct. On the other hand, President Wiggington understands that loan development is critical to generating profit he just lacks all understanding of how to create business amongst new and existent members and how to retain relations with the member sector. Since January 1, 2007, the date Charles R. Wiggington, Sr. began his appointment to President, Priority One become a smaller, less competitive credit union. 

Recently, President Wiggington boasted that the credit union opened a large number of new accounts. What he didn't say is that a sector of the accounts were opened with the minimum required $5 deposit and free-checking accounts were opened with no monetary deposit. He also includes accounts "approved" to be opened but where no deposit has been made.  

Neither the President or AVP, Rodger Smock, or COO, Beatrice Walker, possess the talent, business savvy or imagination needed to implement strategical planning that actually achieves its intended purpose. 

Months ago, COO, Beatrice Walker boasted during a meeting with Branch Managers and AVP's that she could bring in more business than the entire business development team, combined She has yet to prove that her statement is true. We'd suggest, President put her in the field so she can starting bringin in the fabulous amounts of new business she says she is capable of clinching.    

 A PREDICTABLE START

We recently decided to look at Priority One's reported financials for the months of November and December 2010. During our review, our attention was drawn to the immense amount the credit union spent on litigation. Prior to January 1, 2007, the date Charles R. Wiggington, Sr. began serving as President, Priority One annual expenditure on "legal" approximated $19,000 to $22,000. However, starting in late 2009, spending increased sharply. For the entire year of 2010, Priority One reported a total of $90.000 spent on litigation. Since Charles R. Wiggington, Sr. was appointed, the amount more than quadrupled. The $90,000 cannot be attributed litigation of the lawsuit filed by the former Burbank Branch Manager. So why has spending on legal quadrupled?    

The credit union's spending on consultants is nothing shore of astronomical. The President and his COO are desperately seeking solutions to offset the effects of their blundering business decisions but no amount of consultants can put a stop to the President's and COO's abuses. Though the President often blames the national economy for the cycle of losses impacting the credit union but he never mentions the effect his imprudent decisions have had upon business, the immense amounts spent annually on consultants, and litigation. President Wiggington is either ignorant about how spending impacts the credit union's bottom line or he's lying. 

We've also noted that the credit union is spending more and more money on temporary personal. According to their December 2010 report, $43,755.00 were spent on temporary staff. What this indicates that his cost-cutting efforts have, as we've reported in prior posts, replaced full-time staff with part-time staff who are not recipients of benefits. President Wiggington's so-called solutions are designed to impact employees and ensure his salary and benefits remain intact and unaffected. 

RENEWING HIS CONTRACT

There is no arguing, Priority One's Board of Directors is made up of ignorant and unethical Directors. There is also no doubt that President Charles R. Wiggington, Sr. is bad for Priority One Credit Union. Beginning in 2007, net income began to decline in the millions of dollars though it was not until mid-2008 that the President's ineptitude as a strategist began tearing away at the credit union's once secure financial foundation. 

Despite their widespread failures, the credit union continues to describe itself as a "financial fitness center" that possesses the ability to help members "win with money." Undeniably, Priority One has proven it cannot help itself "win with money." 

In 2008, Charles R. Wiggington, Sr. was accused of sexually harassing a former employee. He was suspended with pay during which a six-week investigation was conducted by EXTTI, Inc. The credit union was eventually provided evidence that President Wiggington had indeed sexually harassed the former employee. What's more, the investigator recommended his termination. 

Over the past few months, the President has entered yet another of his personal and disingenuous driven-campaigns and told some members and representatives at other credit unions that he is thinking of retiring. Believe us, he's not. It's just another concoctions. He has said he wishes to spend more time with his children. His only child who still lives at home is about 19 years of age.  

Despite his tainted history, the Board of Directors has renewed his agreement with the credit union. One has to wonder about the Board's intellectual capacity. It is apparent the Directors are all ethically bankrupted but what in his failed performance did they see that justified renewing his agreement? 

THEY MADE ME DO IT!

Avoiding to allude to his history of failures, last November President Wiggington admitted that he was "ordered" by the NCUA to close the Redlands and Valencia branches. What he fails to state is why the NCUA would have allegedly ordered the closure of the Redlands and Valencia branches. We don't believe he was ordered to close the two branches. He may have been told that he needed to reduce spending and possibly close a branch or branches. Being lazy and looking for quick fixes, he decided to close the Redlands and Valencia branches. In July 2009, COO, Beatrice Walker, disclosed that she intended on closing the Burbank, Redlands and Valencia branches, sometime in the near future. Subsequently, his latest excuse is another of his stories which are intended to help him escape accountability and portray himself as the victim. 

The NCUA informed the President that net capital had declined to 6.06% and that if fell to 6%, the credit union would be taken-over by them. We suggest President Wiggington consider hiring a writer who can at least make-up excuses that appear credible and that possess some semblance of intelligence.  

THE 2011 ELECTION 

Recently, members received copies of Priority One’s Winter newsletter in accompaniment of their account statements.  On the backside of the newsletter, is a notice inviting "qualified" candidates in "good-standing" to submit their self-nominations to vie for a seat on either the Board of Directors or Supervisory Committee. :

Winter 2011

NEWS                                                                                       

VOLUNTEERS NEEDED

We’re seeking qualified candidates for four (4) seats on the Board of Directors and two (2) seats on the Supervisory Committee for the 2011 elections.

Interested members* in good standing must submit their credentials in writing by midnight February 28, 2011 to:

Nominating Committee

                                                                                 

Priority One Credit Union 

PO Box 3270                                                                                              

South Pasadena, CA 91031-6270

The Annual membership meeting and election of officers will be held in May 2011.

*Must be 18 years or older

We of course have no faith in the corrupt Board and in particular, it's heinous Director, Diedra Harris-Brooks. It was after all, Mrs. Harris-Brooks with her accomplice, the President, who has interfered in recent, past elections, destroying the integrity of what had been a fair and impartial system. Their motivation was simply to ensure that the Board's and Supervisors, the majority of who are Black, remain in place. The current herd of Directors and Supervisors have proven to be the ultimate "yes" men to the Board Chair's every whim. 

During the past two elections, Mrs. Harris-Brooks and President Wiggington both dishonestly and uncleverly mailed ballots to only members who have checking accounts and thus excluding the much larger sector of members who only have savings accounts.  

THE PRESIDENT MAKES ANOTHER TURN ABOUT FACE

On January 2007, President Wiggington ordered increased focus on developing new business amongst Select Employer Groups ("SEGs") and decreased efforts made to acquire new business from employees of the United States Postal Service (USPS). His reason was that he wanted to change the credit union's demographics by converting the credit union's membership from blue-collar workers to white collar workers, business owners and professionals. He would never achieve his purpose. 

In September 2010, the President and COO, Beatrice Walker, ordered immediate cessation of SEG development. She informed the business development team that the credit union could not afford to exert efforts trying to develop businesses amongst SEG's admitting that employees of SEG's did not seem interested in the products and services offered by the credit union. She also urged increased efforts to develop new business amongst employees of the United States Postal Service who once made up more than 70% of the credit union's member base. 

Recently, incompetent AVP, Rodger Smock, try to diminish the importance of employees of the USPS, denying that they represent the majority of the credit union's membership. Did the chronically dull AVP forget that Priority One was founded by postal carriers or that it wasn't until the 1990's when the credit union expanded its scope of eligible members, to include families of USPS employees? 

Though the credit union references approximately 200 SEG's on records, a large percentage of these are businesses that no longer exist as a result of sales and closures. In 2010, AVP, Rodger Smock was informed that the list of SEG's should be amended and all no longer existent SEG's removed. He refused and said, "Well, it [the SEG list] makes us look good." Yes, Mr. Smock, an inaccurate list of SEG's makes the credit union look good- in your eyes only. Contrary to what the misinformed Mr. Smock thinks, misrepresentation never makes any business look good.

The President's efforts to replace employees of the USPS with employees of SEG's demonstrates his disdain for postal employees. It also reveals that he has absolutely no concept of what sectors contribute most to the development of new business. There is a serious disconnect when it comes to what President Wiggington knows about the credit union's membership. 

TRYING TO REBUILD BRIDGES

President Wiggington has been expending a lot of time lately, trying to rebuild bridges he obliterated. If you visit the credit union's website, you'll find the following message:

UNIVERSAL AUTO LEASING AND SALES

Following COO, Beatrice Walker’s arrival to Priority One on June 1, 2009, she and the President decided to end the credit union’s relationship with Universal Auto Leasing and Sales, who according to the President, were failing to bring in the amount of business needed by the credit union. He also told some staff members, that the auto broker was not providing acceptable service. The President evidently didn't realize that Priority One has become the subject of increasing complaints citing unacceptable member service.  The President and the COO ordered the Loan Department staff to only refer members who were in search of an automobile, to Auto Alliance, the broker introduced to the credit union by Ms. Walker. 

Despite the long relationship between the credit union and Universal Auto Leasing and Sales, in early 2010, Ms. Walker assigned a desk within the Loan Department in South Pasadena, where a representative would sit during business hours and meet with members who expressed an interest in buying a car. 

Auto Alliance, unlike Universal Auto Leasing and Sales, charges $75 to search for an automobile. The fee serves to further undermine the credit union industry's motto of "people helping people." At Priority One, the motto is "People helping themselves." 

WHOLESALE INVESTMENTS, INC.

In 2008, Priority One, through one of its business development representatives, entered into a business relationship with  Wholesale Investments, a broker located in the city of Van Nuys, California. 

The owner, who was enthusiastic to develop a relationship with Priority One and paid for all marketing costs used to promote his company and asked if he could place one of his representative at Priority One's main branch in South Pasadena, California. At the time, hew as told the credit union could not provide a desk because it would create a conflict with it's relationship with their other auto broker, Universal Auto Leasing and Sales. Furthermore and according to President Wiggington, there was no physical space to setup a desk. That was a lie.  

In 2010, the owner of Wholesale Investments, Inc. was informed that Priority One had chosen to promote the services of Auto Alliance who would serve as the credit union’s ONLY auto broker. Incensed, the owner accused the credit union of being disingenuous and pointed out that his company paid for all marketing materials promoting his brokerage. He also complained because he had been denied a request to assign one of his employees within the credit union’s main office. Angered he demanded the name of a person he could complain to at the credit union and was immediately provided with the name and cellular and telephone numbers of Senior Vice President, Rodger Smock. Several calls failed to garner a response from the Senior Vice President. 

As reported here previously, Auto Alliance has to date, failed to  produce the level of business Ms. Walker said would be attained. The recent efforts to re-establish working relationships suggest that the President has possibly taken an introspective look at his huge mistake in severing relations with Universal Auto Leasing and Sales and Wholesale Investments, Inc. 

To be continued......