Alaska’s second-largest credit union is taking the unusual step of closing its doors and online presence for multiple days, starting this weekend, to complete a long-planned software upgrade.
Mark Burgess, chief executive of Credit Union 1, said it has taken steps to avoid impacts to customers.
The 71-year-old credit union has a large presence in Alaska. About 90,000 members live in the state and another 10,000 once lived in Alaska. It has a dozen branches and is second in size to Global Credit Union, formerly Alaska USA.
Online services and the app are set to go offline at 6 p.m. Friday, the credit union says. The branches and call center will be closed starting Saturday. All the services are set to resume Tuesday.
Burgess said it’s possible the online services will return before Monday, and it’s also possible branches will reopen Monday starting at the typical time of 10 a.m.
“We gave ourselves a buffer in case it takes longer than expected,” he said of the upgrade.
Burgess said the closure has been planned for three years, and has nothing to do with the banking crisis that sprung into view last month.
“It definitely is not related to any of the banking issues at all,” he said.
[Alaska banks on solid ground as concerns about banking crisis spread, regulators and execs say]
Burgess said the closure is the result of the credit union’s first upgrade, since 1992, to its “core” software system. The upgrade will improve services for members and allow the credit union to operate more efficiently, he said.
“This is our system that runs everything, together,” he said. “It’s called a core system, so we need to have no transactions running through while upgrading it.”
“It will really make it easier to move money, is the biggest thing we’ll start to see,” he said, such as allowing rapid transactions and transfers. “It’s stuff other institutions have been doing a while and we haven’t been able to take advantage of.”
The closure comes a little more than a month after a banking crisis stirred fears in the global economy, impacting midsize banks that are significantly larger than Credit Union 1. The crisis has been marked by the failures of California-based Silicon Valley Bank and then New York-based Signature Bank; struggles by First Republic Bank, also from California, to remain alive; and the acquisition of Swiss banking giant Credit Suisse by UBS.
State regulators said last month that Alaska banks and credit unions are on solid ground and don’t have the risky level of uninsured deposits, those above $250,000, that led to fleeing investors when concerns of stability arose at Silicon Valley and Signature banks.
The Alaska banking division said in an emailed statement it has confirmed the upgrade has long been planned.
At the end of April, Credit Union 1 will be closed for a few days as we complete a systems upgrade. Here's what you need...Posted by Credit Union 1 on Wednesday, April 19, 2023
“The Division of Banking and Securities is not concerned with this upgrade, or the outages anticipated as part of the effort,” the statement said. “Our conversations with CU1 leave us confident this has been well thought out and is a natural function of the constant need for financial institutions to maintain robust information infrastructure.”
Credit Union 1 is the only state-chartered credit union in Alaska. It also reports financial information to federal regulators. Credit Union 1 recently reported holding $1.5 billion in assets, and $1.3 billion in liabilities.
Burgess said the credit union has been telling customers about the closure in recent months, such as in monthly statements, emails, when they log in for online banking and on social media.
During the closure, Credit Union 1 cards and ATMs will continue to work. Transactions for recurring income and payments, such as payroll and bills, will be completed early before the closure.
“If you need an automatic transfer or payment to occur during our closure, please schedule it in advance so we can smoothly process it for you,” the credit union said in a Facebook post last week.
A member raised concerns in the post about receiving a monthly payment on Monday, as bills are due.
The credit union responded: “To make sure you’re taken care of, any recurring payments you receive or bill payments that are scheduled in advance will still occur. You can expect these ACH (Automated Clearing House) items to process on April 28, ahead of our April 29-May 1 closure.”