KERNVILLE, Calif. (12/28/09)--The Kernville (Calif.) Chamber of Commerce wrote an open letter to AltaOne FCU in the Kern Valley Sun last week, seeking reconsideration of the credit union's decision to close its Kernville branch. AltaOne FCU, headquartered in Ridgecrest, Calif., announced Dec. 15 that it would close three branches--including the Kernville branch--because of the economy's effect on its operating expenses. It will keep an external ATM operating with full service. Members had begun to go delinquent on loans, and the mounting chargeoffs affected the credit union's capital ratio, which dropped to below the well-capitalized standard of the National Credit Union Administration (NCUA), according to AltaOne President/CEO Bob Boland. The hit on its provisions for loan losses totaled $12 million this year, Boland told News Now. Other contributing factors were the assessment for the National Credit Union Share Insurance Fund and the $2.9 million in capital held at Western Corporate FCU (WesCorp). NCUA encouraged the credit union to review its operating expenses and take measures to increase its capital, he said. Boland told News Now the credit union had received a letter from Kernville chamber asking management to reconsider, based on the need of its members there. "We're sensitive to our members-owners in the community," he said. "Kernville is located in a remote, rural area and is a very small community that is isolated. Bank of America and Comerica banks both had abandoned the area, and the credit union was the community's preference, he said, noting the area has some small businesses that cater to tourists. "The president has been encouraging credit unions and others to serve small businesses," Boland told News Now, "but in California, unemployment is at 15%, we're seeing bankruptcies triple, car dealers are closing down and it's a very severe state of affairs. We have to reduce our operating expenses to get back to a position of profit, and we've had to make some very tough, tough choices." To cut expenses, the credit union already had closed its Mammoth Lakes location in October. Its 14 locations have been reduced to 10. Other towns' residents have been vocal about missing their credit union's convenient services. "Most members don't understand we went through a wave of layoffs to help our operating expenses," he said, adding, "There were no other options." He noted that the credit union owns the Kernville facility and will keep the building and a tenant, so it isn't abandoned. However the credit union can't staff it. "Should our financial situation improve, we'll reconsider, but we can't make promises, and we won't hold out false hope." The credit union is also closing its RiverWalk branch in Bakersfield; closing an in-store mini branch in the Albertsons grocery in northern Ridgecrest; and eliminating free-standing ATMs at the NAWS Recreation Center, China Lake and at the southern Ridgecrest Albertsons in-store branch. Like Kernville, the Bakersfield and northern Ridgecrest locations will keep full-service external ATMs. Member accounts from Kernville and the RiverWalk locations are being transferred to Lake Isabella and the Ming center in Bakersfield, said the credit union. In it's letter, the Kernville Chamber of Commerce said it "is very much opposed" to the closure because "it is the only financial institution located in the northern part of Kern Valley." The area includes Kernville, which has a population of 2,000; nearby Wofford Heights with 4,000 in population; Riverkern, Fairview and Johnsondale (Kern Valley Sun Dec. 22).