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Tuesday, April 30, 1996

First Financial has pledged to maintain student involvementBy Lia Ramsey

Daily Bruin Contributor

Westwood Student Federal Credit Union completed a merger today with a private credit union, eking its way out of a debt that could have completely shut down the student-run operation.

The merger with First Financial Federal Credit Union ends 11 years of student management at the Westwood credit union, which operates on-campus.

Westwood Student Federal Credit Union representatives refused to disclose the amount of money the firm was indebted, but explained that its financial problems were caused by a misappropriation of guaranteed student loans.

The decision to merge the union was met with little opposition because of the firm's dire financial situation, said Mary Mallavarapu, vice chairman of the student advisory committee for the student credit union.

"Only 50 percent of our loans can be student loans, but we exceeded that amount," Mallavarapu said. "We thought it was OK, but it wasn't. We didn't find out until too late."

The student union's board of directors decided a merger would save the business from bankruptcy. First Financial offered to pay off the debt if the student credit union joined their organization.

"We were trying to get the credit union back to solvency. With the merger, First Financial takes in the loss and we are no longer in debt," said Ken Pao, a student representative from Westwood Student Federal.

The student credit union has been historically operated solely by UCLA students. Now, due to the merger, students will no longer occupy all of the higher management positions.

"Basically, Westwood Student Federal Credit Union was run by students ­ there was a high turnover rate and it was hard to find consistency," Pao said. "The management will now be with First Financial ... Now we can keep up a stable management."

However, the loss of student management has not been of huge concern to the student union, in part because First Financial plans on leaving the union's Westwood branch mainly in the hands of students.

"The manager will be an employee of First Financial and most likely not a student," Mallavarapu said. "But, there's still a lot of student involvement. That's one of the goals First Financial had when they joined us."

Also, students will still be represented in the credit union through the recent formation of a student advisory committee.

"The student advisory committee was formed because we need to address issues that will be very different from other customers of First Financial. We needed a student perspective," Mallavarapu said.

"The student advisory committee basically advises the board of First Financial and keeps an eye on operations here," she added.

Besides debt and management problems, employee competition was another factor that lead to the merger. University Credit Union, another local firm that also caters to students, recently opened main employment positions to students.

"We weren't competing with (University Credit Union) but they are opening their field to students also. So, they are now competitors," Pao said.

But because of the merger, Westwood Student Federal does not consider University Credit Union as a threat.

"Before, the union was a $3 million student credit union. Now that we're as large as First Financial, we can provide better service," Pao said.

First Financial Federal Credit Union was recently ranked the 17th largest credit union in Southern California, and is a $300 million membership-based financial organization. The progressive credit union currently has more than 57,000 members.

"We're looking to expand our membership and get the younger members ­ the young, of course, are the future," said Joelette Quinn , vice president of First Financial. "I think, more or less, it's beneficial that we can combine our businesses."

Though the Westwood Student Federal has merged with First Financial, the unions' agreement entails that the student credit union will keep its current name.

Additionally, none of the current services of the student credit union will be eliminated, though officials promise new student services will be offered.

"We are going to be offering a bunch of different products ­ we're expanding the product line to our students in checking, savings, and loans," Munoz said.

One benefit of the merger is that students are no longer limited to getting service at the on-campus office, but can go to any credit union to be helped, Munoz added.

The new Westwood Student Federal Credit Union is also now offering Visa cards and is working on a special UCLA ATM card, tentatively designed with a picture of the Bruin bear mascot.

First Financial representatives emphasized that the merger did not mean students would not participate in the union's operations.

"The students made the final decision to choose us," Quinn said. "Even though we've completed the merger, they're still in charge of running things at the union."

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