Tiny Mountain Gem Credit Union closes Weiser branch

The tiny Mountain Gem Credit Union closed its Weiser branch Aug. 31, putting three of its 14 employees out of work.

The 60-year-old Nampa-based credit union, which has $18 million in assets, had opened the Weiser branch 13 years ago. There, it worked mainly in auto loans, with some mortgage financing.

The branch was a casualty of changes in the way that people seek auto loans, said CEO Cheri Schaafs. Until recently, auto purchasers went first to their bank or credit union to secure financing, and then to the dealership, Schaafs said. Now, they go to the dealership to choose a car, and the dealership steers them to a financing partner, she said.

“We were profitable over there until about three or four years ago,” said Schaafs. “The way people buy autos now is they go to the dealer and the dealer slips them to whomever pays them the most.”

In the Weiser area, which has a population of about 5,500,  “there are only three major dealers there anyway, and they were not interested in working with us, even though we were local.”

Idaho’s small credit unions are struggling to stay afloat in the face of regulations that cost them disproportionately more than they cost larger counterparts, said Mary Hughes, financial institutions bureau chief at the Idaho Department of Finance.

“When they hire personnel just to address regulatory issues, that personnel is non-revenue producing,” Hughes said. “It’s not adding to the bottom line, it’s just helping them keep in compliance. With these smaller credit unions, frankly I don’t know how they do it.”

Idaho-chartered and federally-chartered Idaho credit unions have been steadily consolidating since the 1970s. That year, there were more than 180 Idaho-based credit unions, according to figures from the Department of Finance. In 2015, there were 40. However, assets and memberships have risen accordingly in the credit unions that remain. In 1970, Idaho-based credit unions had fewer than 100,000 members; this year they had 660,000.

Schaafs said Mountain Gem is thriving in Nampa, where it has two offices with 11 people.

“We’re successful here because there are smaller independent auto dealers here,” she said. “We have a good reputation and we have probably six dealers we’re working with.”

Mountain Gem started out as Quinco, a credit union for federal employees in a five-county area.