GreenState Credit Union is reducing its workforce by cutting 42 jobs, effective immediately. The 42 employees across the organization, which primarily had roles in GreenState’s mortgage and commerical departments, represents less than 5% of the company’s total staff, according to Chief Marketing Officer Jim Kelly. The news was first reported by The Gazette. The company […]
GreenState Credit Union is reducing its workforce by cutting 42 jobs, effective immediately.
The 42 employees across the organization, which primarily had roles in GreenState's mortgage and commerical departments, represents less than 5% of the company's total staff, according to Chief Marketing Officer Jim Kelly. The news was
first reported by The Gazette.
The company said the move was "necessary" due to external market corrections that impact GreenState directly, according to a statement.
Mortgage rates have
surpassed 6% and are coinciding with less demand, according to CNBC. Mortgage applications are 29% lower than this time last year.
Inflation rose again last month to 8.3%,
Labor Department data shows. To slow inflation levels, the Federal Reserve may decide to raise interest rates currently hovering around 2.25% to 2.5%.
"As rates have risen dramatically, the demand for these loans (especially refinances) has dropped dramatically as well," Mr. Kelly said, noting that financial institutions usually implement staffing reductions when this occurs.
Refinance demand is 83% lower than the same week one year ago, CNBC reported.
Despite outside factors, Mr. Kelly says GreenState is still performing "very well financially, is well capitalized and continues to grow," and notes that GreenState's acquisitions of other banks has been a strong source of deposits.
Last October, GreenState completed its
third bank acquisition in 2021. The credit union closed deals last year for Illinois-based institutions Midwest Community Bank and Oxford Bank & Trust, as well as Nebraska-based Premier Bank.
Mr. Kelly noted that after an acquisition "it is typical to reduce staff and reduce overhead."
The
purchase of Premier Bank was scrapped in August after regulatory opposition, the Credit Union Times reported, but GreenState CEO Jeff Disterhoft said they would still look into acquisitions and organic opportunities to expand into the state.
GreenState is unable to acquire banks in Iowa due to rules put in place by the Iowa Division of Banking. Credit unions buying banks can draw criticism, with opponents often arguing their tax-exempt status makes it easier to make acquisitions.
The company's current job portal page lists four openings in the Corridor.
"We are still opening thousands of loans each month," he added. "We are actually on pace for a record year in home equity loans. I’m fairly certain we will retain our position as the top equity lender in the state."
Each impacted employee will leave with a severance package and extended insurance coverage.
Since the number of impacted individuals does not constitute 33% of GreenState's workforce, the Worker Adjustment and Retraining Notification (WARN) Act does not apply.
