Iowa’s largest credit union recently laid off 42 employees due to “market corrections and rising interest rates.”
“This action was necessary due to market corrections and rising interest rates that directly impact GreenState’s operations,” GreenState Chief Marketing Officer Jim Kelly said in a prepared statement. “Employees affected by this move have received severance pay, as well as extensive insurance coverage.”
Prior to the layoffs, the $10.6 billion credit union had 761 full-time employees and 14 part-time employees, according to its NCUA call report for the second quarter.
Most of the workforce reductions have been in GreenState’s mortgage or commercial banking operations.
Kelly added that there were “no immediate plans for further layoffs”.
He also said the proposed acquisition of Premier Bank, canceled in August, had not been factored into the credit union’s decision to lay off employees.
“We still plan to be in Nebraska by the end of 2023,” he said. “In fact, we continue to seek locations in this market for our future branch network.”
Nationally, in the financial services sector as a whole, demand for mortgages has fallen by almost a third since last year due to rising interest rates.
Credit unions issued $72.5 billion in first and second lien residential loans in the second quarter, down from 14.2% a year earlier and down 1.1% from the first quarter, according to a CU time analysis of NCUA data. Additionally, first mortgages fell 5.3% from $58.1 billion in the first quarter to $55.1 billion in the second quarter.
In addition to GreenState, other Hawkeye State financial institutions have laid off employees, including Wells Fargo, one of the nation’s largest home lenders, which operates its mortgage division headquarters in Des Moines.
The bank’s mortgage division laid off 372 employees from May to Sept. 14, according to Iowa Workforce Development. Employers are required to report planned layoffs to affected employees and the state agency.
Wells Fargo plans to lay off 157 additional employees in Iowa by Oct. 25, for a total of 529 employees.
In its second-quarter financial filings, Wells Fargo said its home loans fell 53% from a year ago.