J. Alvin George has a 55-year career as a member of various credit union boards. (photo/lambertphoto.com)

Electric streetcars were making their final runs on San Diego’s streets and the lily pads under the Cabrillo Bridge had been converted to ribbons of highway when J. Alvin George — Al George to most everyone — first sat on a credit union board of directors.

In those postwar days of 1948, it was known as San Diego Gasco Employees Federal Credit Union, and its assets were something less than $800,000. George was a young electrical engineer having a sandwich at his desk when “a man I had worked with from another department sat down on the other side and said, ‘Al, I want you to become a member of the credit union. We’re going to have a vacancy on the board of directors soon and I want you to run for it.’”

To this day, George says, he doesn’t know why he was recruited for the board. But it launched him on a 55-year career as a member of various credit union boards and unofficial status as the dean of local credit union volunteers. He also has received director of the year awards from three national credit union industry associations in the past few years.

Boom Times

San Diego was booming after the war years and the credit union’s sponsor, San Diego Gas Co., was busy trying to lay pipes fast enough to keep up with the area’s growth.

“In those days, a lot of people didn’t know what banks really did, and a lot of guys on the utility crews weren’t into that sort of (money management) thing,” George remembers. “There was actually a payday loan pool at the company owned by 20 guys. They’d lend you $10 until payday, which back then was enough to take a family from Tuesday until Friday. But they had horrendous interest rates. If you borrowed $10, you had to repay $12.50. The credit union started because two guys knew that payday loan group wasn’t doing the company or the employees any good.”

San Diego Gasco Employees Federal Credit Union is known today as Financial 21 Community Credit Union, with assets topping $130 million. From its 1937 roots serving San Diego Gas Co. employees, it now holds a community charter allowing it to offer membership to anyone living or working in San Diego County. Its growth mirrors what has happened to the 20-plus other credit unions headquartered in San Diego. It has been a run of progress that currently has these financial co-ops in the top spots among locally run financial institutions. At least 13 of them have assets topping $100 million. Combined, San Diego’s credit unions control $9.86 billion in assets.

Despite their steady growth in size, membership and menu of services, even the largest local credit unions recruit at least some of their board members the same way George was drafted in 1948 — by personal contact.

Mike Maslak is chief executive of North Island Credit Union, the area’s third largest credit union at $1.2 billion. North Island has a formal board nomination process, but “our informal network is alive and well and robust.”

North Island’s Service Quality Committee is an incubator of sorts for prospective board members, reports Maslak, himself a board member. North Island members with a yen to get involved are usually referred there first to get their toes wet in what Maslak (and insiders from other credit unions) calls “credit union land.”

“The Service Quality Committee’s mission is to keep tabs on member and customer satisfaction using empirical survey data,” he says. “It gives people great perspective on our mission.”

And it is a good place to gauge a member’s aptitude for a board slot. “We look for people who like the corporate culture and the credit union’s mission,” which Maslak describes as “the best blend of socialism and capitalism.”

It also is important to find highly capable people for board service, he says. New federal regulations on corporations enacted in the post-Enron era don’t apply to credit unions, he says, “but the spirit of those regulations does and it means competent and responsible board members are more important than ever. Our goal is to find the people who want to fulfill the credit union’s mission, but who are savvy as well.”

The Difference From Banks

Credit unions differ from banks because they are financial cooperatives, explains Marla Shepard, chief executive of First Future Credit Union. People join the co-op by making a minimum deposit and thus gain the right to vote for the board of directors. Each member has one vote, regardless of their account balance, and there are no other stockholders. Directors are volunteers and receive no compensation for the four to 10 hours per month or more (12 to 20 hours for the board chair) they spend on credit union business.

At-large election and no compensation are two factors that divide credit union boards of directors from their counterparts at local banks. Neither is there any expectation that credit union directors will “make rain” by bringing in new business, Shepard says.

Dan Yates is chief executive of La Jolla-based Regents Bank and a 24-year veteran of the banking industry. He says the board members of his privately held bank are compensated and are expected to generate business, both by their fellow directors and by the bank’s federal regulators.

“The Comptroller of the Currency and the Federal Deposit Insurance Corp. have long lists of guidelines for directors, including financial stability, creditworthiness, financial astuteness and the ability to do oversight,” Yates explains. In Regents’ case, the management and board members together formed the bank, an arrangement, Yates says, that is somewhat unusual.

At Doug Sawyer’s Legacy Bank, also in La Jolla, the board of directors has eschewed compensation, he says, “until the bank becomes profitable. We do give them cookies or cake at the board meetings.”

Although making rain is not on a credit union director’s “to-do” list, Don Shanahan thinks he has a duty to promote his credit union.

Shanahan, an assistant U.S. attorney, has chaired the Cabrillo Credit Union board on and off for nearly nine years. Originally formed for Border Patrol employees, Cabrillo expanded to include all federal employees and later gained a community charter.

“I’ve directed an awful lot of people to the credit union because I really believe in it,” Shanahan says. “When I hear someone talking about a home or car loan I always direct them there. People who work for the federal government are crazy not to belong to a credit union, and Cabrillo Credit Union especially. I think we are about as good as it gets.”

Cabrillo CEO Robin Lentz says great board members are those who use the credit union services. (photo/alandeckerphoto.com)

Shanahan exemplifies what Cabrillo CEO Robin Lentz calls “great board members.”

“They are dedicated to the credit union, use the credit union services themselves, and ask, ‘What’s in it for the credit union,’ not ‘What’s best for me.’”

Like George, Shanahan is not sure why he was selected except that, despite the word-of-mouth recruitment he received, efforts are always made to recruit from a variety of federal agencies.

“Right now on the board we’ve got someone from Treasury and someone from General Services. We always try to make sure the Border Patrol is represented since that’s our original membership base.”

And, since merging with Sharp Federal Credit Union last year, the board also includes two directors from that group.

Incumbent Safety

Joseph Duffy, a San Diego fire captain, is chair of the San Diego Firefighters Federal Credit Union. (photo/alandeckerphoto.com)

Like North Island, says Lentz, Cabrillo also has a formal nominating committee and invites members to apply for the board via the monthly member newsletter. Occasionally incumbents are turned out and newcomers elected.

“It’s unusual for that to happen, but it does,” Shanahan says. “The guy who was most recently elected by displacing the incumbent is still on the board and doing very well.”

It also has happened at San Diego Firefighters Federal Credit Union, and more than once, said board chair Joseph Duffy, a San Diego fire captain. “A firefighter’s wife ran for a seat on the board and won. Her background was in personnel administration, which is a great thing to bring to any board.”

Another time, he says, a firefighter nominated himself and showed up at the annual meeting with enough friends to get himself elected.

Actual vacancies don’t come up all that often, it seems. Credit unions have terms for directors ranging from one to three years, but none contacted for this story has term limits. Thus at most credit unions, directors choose their own moment to ride into the sunset.

Which is something George — who is going strong on both the Financial 21 and North Island boards — shows no sign of doing.