Montauk Credit Union is leaving Roosevelt Island. Seven years into an attempt to establish a viable branch office here, the institution has given up, unable to meet even the initial goals set forth in its original business plan.

"This is the last thing I wanted to do," Montauk Treasurer Lou Jimenez told The WIRE shortly after Montauk mailed out June account statements with a letter telling members the Island branch would be closed by October 1, with reduced days of service each month until then. He said a survey showed that working Islanders "do their banking in the City right next to their offices," adding, "That's something we didn't anticipate seven-plus years ago."

Among Islanders with credit- union accounts, Montauk also faces competition from other credit unions. "A lot of United Nations people use their own credit union, and the municipal credit union has the hospital workers out there," Jimenez said.

Jimenez said Montauk's original business plan had projected Island-branch deposits of $5 million after 18 months, and $15 million to $20 million after five years. But after seven years, deposits still have not reached the $5 million level. There are 1,000 Island members, but Island deposits total only $4.3 million.

"Based on the demographics I was given by RIOC [seven years ago], our goals were attainable, if people didn't do their banking where they worked." Jimenez said, in fact, that the 1000-member mark is satisfactory. "We fell short in the deposit base, not the member base."

Closing the Island branch will save "several hundred thousand dollars" a year, according to Jimenez. He pointed out that Montauk is a small institution with just eight employees supported by a $57 million member base. "We're regulated, and when the regulators come in and ask, 'What is your plan here,' and we explain what we've done..." He said the credit union's Board finally had to face the fact that the branch was not viable.

Jimenez said that maintaining a branch office puts a special burden on the institution in terms of technology - interconnecting the offices - and handling member transactions when the link goes down. "If we have someone on vacation, and someone out sick, that's a quarter of our staff." He said that when computer connections aren't working, adding the need to have a main-office employee holding a telephone, handling computer entries, represented a difficult burden.

The national economic situation was among factors forcing Montauk to face the music. "With interest rates being so low," said Jimenez, "spreads and margins are tight. It got more and more difficult to sustain [the Island branch office]. Rates are at a 46-year low. That certainly didn't help, but it wasn't solely a function of interest rates that led us to this decision. It's also a volume thing."

Jimenez said many Roosevelt Island members have indicated they will continue their Montauk memberships, handling their accounts on line and by mail, and with ATM cards. He said that in the course of considering branch closure, he put out feelers in Montauk's trade association to see if another credit union might take over the branch. "They came back negative." He said the United Nations and municipal credit unions also declined an offer that they take over the branch.

Montauk's departure leaves the Island with only one financial institution, New York National Bank, which took over a Chase branch when Chase got regulator's permission to close here. NYNB expected to retain a majority of Chase's depositors at the time, but NYNB President Serafin Mariel did not respond to repeated WIRE messages this week seeking information on the success of that effort. Like Montauk, NYNB's lease with RIOC is month-to-month.

During August, Montauk's Island branch will be open only Monday and Thursday, 8:30-4:00. In September, the office will be open only on Thursdays from 8:30 a.m. to 12:00, and it will be closed permanently as of October 1. Schedule updates may be posted on at montauk-cu.com, Montauk's website. Montauk's main office (and its only one after the Island branch closes) is at 111 West 26th Street.