Buckeye State Credit Union yesterday abruptly closed its Lake County branch amid efforts to cut costs.
The Akron-based credit union's board of directors decided Wednesday evening to close the Painesville branch, which had 2,200 customers, effective immediately.
Buckeye State started in 1933 to cater to postal workers and other federal employees in Akron. Over the years, it expanded to Shaker Heights, Canton, Alliance and Painesville.
The credit union is in the process of notifying customers by email and mail.
"This was a difficult decision," CEO Jennifer Borowy said in an interview. "It's never easy to decide to close a branch." She noted the credit union is not-for-profit and doesn't have shareholders, but is owned by its customers. This closure is aimed at looking out for "the future of the credit union and members as a whole," she said.
Buckeye has 16,000 customers, 50 employees and about $80 million in assets.
It also has a rating of two stars out of five as of March 2016, according to Bankrate's national "safe and sound" rating system. Two stars means Buckeye ranks "below its peer group," according to Bankrate, which evaluates banks and credit unions based on loan quality, capital, profits and liquidity. Buckeye isn't rated by Bauer Financial, another respected outlet that analyzes the finances of banks and credit unions, because Buckeye's deposits are privately insured.
Borowy said it's notable two-star rating is a year old; the 2017 rating isn't out yet. "We have made significant changes in the past year and have turned it around," said Borowy, who joined the credit union in January 2016 and became CEO in October.
"Like any and other financial institution, the economy has had an impact on our bottom line," she said. "But we are managing, and managing well, and I'm proud to say we're in solid shape and will continue to serve our members.
"We have seen significant success in most of our markets, and the company as a whole is healthy and moving in the right direction," Borowy added. "We are in a much better position than we were a year ago."
Buckeye will keep its ATM at the Painesville location. The status of the building and five employees is not known.
Customers of the Painesville branch can access their accounts online, through the mobile app, through 24-hour customer service by phone or by going to other Buckeye branches, Borowy said.
In addition, Buckeye customers can transact business at other credit union that are part of a collaborative network, called SharedBranching.org. For example, customers in Painesville can go to Firefighters Community Credit Union in Willoughby, which is 10 miles away, or Eaton Family Credit Union, which is 18 miles away. Customers can type their location into the web site and be pointed to the closest branch where they can do business in person, just as if it were a Buckeye branch.
Borowy said the Painesville branch, which opened in 1996, was the smallest and had fewer transactions than the other branches. After Akron in 1933, the Shaker Heights branch opened in 1954, Alliance opened in 1975 and Canton opened in 1989.
"We stand strong with those locations and the investment in technology we've made in those locations," she said.
For example, Buckeye has added the 24-hour service line in the last couple of years, and improved its mobile app and upgraded its online banking. It also has invested in cash recyclers at three locations, which helps speed up transactions, especially business deposits. It also has invested in a "shared branch" ATM in Shaker Heights, which generates fees from people who aren't Buckeye customers.
Like at all banks and credit unions nationwide, customer deposits at Buckeye are insured up to $250,000. Buckeye isn't insured by the National Credit Union Administration. Rather, like many credit unions, it's privately insured. In Buckeye's case, the insurance is through American Share Insurance.