Since their invention during the New Deal of Franklin D. Roosevelt, credit unions have had to warm themselves with mostly the thin margins generated by consumer product purchase lending, leaving banks free to pursue more nourishing commercial accounts.

Nonprofit credit unions were happy to oblige and now represent some of San Diego’s most robust financial institutions. For example, North Island Financial Credit Union, with assets north of $1 billion, is larger than most San Diego-headquartered commercial banks, but behind fellow credit unions such as San Diego County and Mission Federal.

Michael Maslak, North Island’s chief executive officer, says the lender ranks 10th in the county in its market share of deposits against not only the locals but all comers, including Wells, BofA and Washington Mutual.

In the last few years, credit unions started using their elbows in the crowded commercial lending market and last year received permission from federal regulators to roll out SBA lending. The move to SBA has caused considerable irritation under the collars of commercial bankers, who reason that they shouldn’t have to compete against nonprofit credit unions.

“It’s not a level playing field,” Maslak cheerfully admits. “They can do things that we can’t, and we have some privileges they don’t.”

One perk still reserved for banks is the ability to issue stock. Ironically, it is the public service credit unions that have to live off their earnings. “What a concept,” says Maslak.

But Maslak sees a way for credit unions to raise money in public markets too: become banks.

“There are some credit unions that have converted to so-called mutual banks, and that allows you to issue stock on a limited basis,” Maslask says. “Five years from now, we might be surprised that there will be credit unions merging with community banks.”

The bank would bring a charter and the ability to issue stock to the marriage, while the credit union brings the assets.

Maslak has been at the helm of NIFCU for 16 years. He’s also a trustee on the California Council for Quality and Service, also known as the Baby (Malcolm) Baldridge awards.

One reason credit unions are eager to offer business loans is, as Maslak says, “credit unions don’t make a lot of money on the consumer side.” That’s because the credit union’s mission originated in a public policy designed to bring financial services to the “common person” who was shut out of the 1930s financial markets.

Although credit unions like North Island are testing the commercial waters, their roots are still, as Maslak says, “in middle America.”