For many HeritageWest Credit Union members, the first word they got that their credit union was in financial trouble came from the media. On New Year’s Eve, the National Credit Union Administration announced it had liquidated HeritageWest to pave the way for the struggling financial institution to be purchased by Virginia-based Chartway Federal Credit Union. Over the next week, that news trickled down to HeritageWest members, some of whom had kept their money in the credit union for decades.

Members were, quite naturally, shocked. When HeritageWest’s 14-year CEO Steve Christensen resigned last August, citing personal and family reasons, the credit union reassured members all was well. Incoming CEO Bruce Bryan told the Transcript-Bulletin, “We did not get involved with any of the subprime lending strategies or other risky loan practices that caused trouble nationally ... As a credit union, our capital, or our strength, comes from our membership. We remain strong and healthy.”

But those reassurances came just after HeritageWest had posted staggering losses of $15.2 million for the first six months of this year and was buckling under the weight of $30 million in delinquent loans.

Putting a brave face on a bad situation is human nature, and many foundering banks would have sent out the same message as HeritageWest did. But not-for-profit credit unions, by definition, are supposed to be a bit different. The big idea behind small, local credit unions is that when you put your money in you become an owner-member, with all the rights and privileges membership implies. Given that basis, it’s understandable that many HeritageWest members felt burned to learn secondhand their credit union was in need of rescue.

Repairing those hard feelings and rebuilding the trust of members should now be a top priority for HeritageWest’s management and board of directors.

The credit union’s leadership needs to not only reassure members their money is safe, but also do a better job of realistically informing members on overall financial health and performance. We believe members are willing to accept the ups and downs of economic cycles, but will not tolerate being left in the dark altogether.

Rebuilding trust with HeritageWest members will be a big challenge for Chartway too, but it’s a challenge that also comes with opportunity. If, down the road, Chartway ends up with a booming business in a fast-growing market while HeritageWest members end up with a stronger credit union, the pains it took to get to that point will likely be forgotten.