Jim McPheters

With the state budget crisis squeezing education funding, times are tough for San Diego teachers.

That’s not putting a damper on the 75th anniversary celebration at California Coast Credit Union, which has catered to the local educational community (teachers, administrators, support staff) since 1929.

“We’ve supplemented our scholarship program and instead of giving out five $1,000 scholarships, we gave out four $1,000 scholarships and one $7,500 scholarship in recognition of the anniversary,” says CEO Jim McPheters.

With more than 66,000 members and $760 million in assets, Cal Coast ranks fourth among regional credit unions, behind only billion- dollar CUs North Island, San Diego County and Mission Federal. Since McPheters joined Cal Coast in 1986, membership has more than tripled while loans increased sevenfold.

Under McPheters, Cal Coast continues to expand its portfolio of consumer loans for homes, cars, RVs, and boats, with a 30 percent growth in loans in 2003, up from 22 percent in 2002.

“We have enough diversification in our membership that although there might be an impact (budget cutback) in the educational community, it’s mitigated,” McPheters says.

Not that layoffs go unnoticed. “Teacher cutbacks have an impact and ripple effect on us and a lot of our members are teachers,” McPheters says. “We have developed a plan so they don’t get buried as a result of change in income level,” including debt management and counseling.

Another concern is the possibility that rising interest rates will make big-ticket consumer purchases (like houses and cars) more expensive. But McPheters says the only shift he’s seen is from adjustable to fixed-rate loans as borrowers lock in rates now against future increases.

While North Island and other bank-size credit unions are testing the waters in the commercial pond, McPheters says Cal Coast “might get into SBA at some point but does not have immediate plans.”

He seems unimpressed by the building debate over whether nonprofit credit unions should enjoy the same lending privileges as income taxed banks. “My take is that we are such a small segment of the financial world — that CUs have maybe 10 percent of deposits nationally — I can’t imagine why banks would be concerned about that final 10 percent,” McPheters says. “The only taxes we don’t pay are federal income taxes. We pay property taxes, sales taxes, all the other stuff.”

McPheters says retaining employees is a priority and for its efforts, Cal Coast received workplace excellence awards from Peter, Barron, Stark & Associates in 2001 and 2003. “The training programs we have for growth and development, our employee assistance programs, the amount of employee involvement in helping define the direction of the organization and having input into what takes place, that’s what’s meaningful,” McPheters explains.

Cal Coast’s 75th anniversary coincides with some branching out; offices in Temecula, Kearny Mesa and Oceanside are in the works.

As if teachers don’t have enough problems with budget tightening, the price of housing continues to rise. “We have some special programs for first time home buyers that can assist, 2 (percent) or 3 percent down, stuff like that,” McPheters says. “I don’t know how they do it absent some type of parental or other assistance. The resilience the community has is incredible. How many years have we been hearing about this? Somehow we have been able to persevere.”