Cost Reduction Helps Local Banks and Credit Unions Fuel Economic Recovery

Jun 16, 2010, 09:02 ET from Expense Reduction Analysts

CARLSBAD, Calif., June 16 /PRNewswire/ -- Expense Reduction Analysts (ERA) is playing an important part in the nation's economic recovery. Local banks and credit unions are using ERA's strategic cost-reduction services to strengthen their financial position in order to lend to small businesses.

"Historically, small business growth has helped us out of recessions," noted Ken Hagerstrom, President and CEO of ERA-USA. "The majority of small business lending comes from community banks."

Earlier this month, Federal Reserve Chairman Ben Bernanke noted that healthy small businesses are critical to job growth and urged banks to increase lending to small businesses to help the economic recovery.

The nation's credit unions also contribute to America's improving economy. More than 92 million members use credit unions to help purchase cars and homes, create savings accounts and IRAs, and take out business loans.

"Community banks and credit unions don't receive bail-out money. They must generate the funding they need internally," said Hagerstrom.

Cost-reduction experts with ERA are helping banks and credit unions find funding by reducing overhead G&A expenses common to most businesses.

Clients throughout the country have included Mission Federal Credit Union in San Diego; New Generations Federal Credit Union in Richmond, VA; Volunteer State Bank in Tennessee; and Farmington Bank, based in Connecticut.

ERA Consultants reduced Mission Federal's expenses for records management 45%; cut New Generations' courier costs 47%; are looking at ways to reduce Volunteer State Bank's telecommunications spend; and found 32% savings in office supplies for Farmington Bank.

"We were already very conscious of controlling our operating costs, but working with ERA added another level of savings potential to our cost containment efforts. These savings help us better serve our members," says Larry Davis, President and CEO of New Generations Federal Credit Union.

According to Mission Federal CFO Ron Araujo, "In addition to the immediate savings, we now understand how we can control costs in the future. ERA's recommendations go far beyond what we would have been able to accomplish on our own and help us make more funds available to our customers"

ERA is an international cost-reduction consultancy. The U.S. practice includes more than 250 Consultants with extensive knowledge and market pricing for expense categories that are part of most businesses. Few companies would be able to justify hiring this level of expertise internally.

ERA clients typically save an average of nearly 20%.

SOURCE Expense Reduction Analysts