Auto loans are ‘bread and butter’ for the University and State Employees Credit Union, says CEO Jim Harris. The credit union arranges loans through partnerships with about 60 San Diego auto dealers. (photo/alandeckerphoto.com)

Consider the humble supermarket. Consumers stroll the aisles unmolested by sales personnel and choose from thousands of items, even competing brands. Now consider the financial marketplace. A consumer may have savings and checking in a local credit union or bank, a credit card from a financial institution in North Dakota that offered zero percent for a few months, an auto loan from a finance company that has a relationship with the dealer, a business loan with Capital One, and insurance through an online provider.

Since each of these financial relationships has its own set of rates, rules and fees, wouldn’t it be easier if a consumer could do it all with one institution? And what better type than San Diego’s growing credit unions, which have attracted more than $11 billion in local deposits since they were formed back in the 1930s.

San Diego’s larger credit unions are trying to entice consumers with a diverse palette of services: the traditional savings, checking, auto loan or mortgage; and the nontraditional such as long-term health care insurance and investment planning. Credit union services are as old as a safe deposit box or as modern as identity theft insurance.

One example is San Diego County Credit Union, the 14th largest credit union in the nation with $3.6 billion in member assets. In addition to traditional accounts, SDCCU offers auto insurance, long-term health care insurance, investment services and business loans of up to $10 million. Irene Oberbauer, the lender’s chief operating officer, says customers can access most services online.

SDCCU also is evaluating different kinds of identity theft insurance. Members’ desires influence credit union offerings. One example is the SDCCU’s Saturday hours which extend to 4 p.m., three hours later than usual bank/credit union Saturday hours. “That’s one of our busiest days,” says Oberbauer. “You see the influx of people come in about 3:30, just before closing time.”

Customers like knowing that their credit union is more than a checking account and car loan operation.

Laurie King, a manager with Cox Communications and a SDCCU member, says the credit union is “pretty much my first stop” when considering financial services. She has checking, savings and a certificate of deposit with a promotional rate that King credits with encouraging her to save.

King also enjoys the credit union’s customer service and convenience. “I can do everything online,” she adds. On an occasion when she was improperly billed, King says the credit union was quick to respond and correct the mistake.

Still, credit unions have the same problem as all types of financial institutions: spreading the news about the variety of services offered.

John Weaver, CEO of Great American Credit Union, says communicating with members about services the credit union offers is a challenge. (photo/alandeckerphoto.com)

“Communicating with members is always an issue,” says John Weaver, CEO of the $60 million Great American Credit Union, which began serving post office employees in 1928. “It’s a highly competitive environment and time for most people is a resource that’s hard to come by, so to get in front of them and actually do the education is difficult.”

Great American offers four types of IRAs, and the ability to purchase stock and mutual funds through Members Financial Network. But the big issue for Great American’s affinity group is housing. “We are a member of the Federal Home Loan Bank of San Francisco, and we’re looking at how we might partner with them to help members with affordable housing grants to afford a house in San Diego,” says Weaver. The help, he says, might come in a variety of forms such as low-cost loans, matching down payments or home savings accounts. Weaver says his credit union also is looking into health savings accounts.

One issue for smaller credit unions has been convenience. Great American tackles this obstacle by banding together with other credit unions and sharing locations. Great American customers, for example, have access to 644 ATMs and 33 branches in the county.

Credit unions trying to add services also are pressed by the need to turn a profit or simply cover operating expenses. “The yield curve is very flat,” Weaver explains. “There’s not much difference between what we can buy money at and what you can sell it for.”

The $775 million University and State Employees Credit Union (USE) offers “gap insurance” on auto loans so that the consumer is covered in the event of an accident if the value of the loan is more than the car’s worth. Auto loans are “bread and butter” for USE, says CEO Jim Harris. The credit union arranges loans through partnerships with about 60 San Diego dealers.

Harris says education is the key component to getting consumers to use the credit union for nontraditional services. “The consumer doesn’t know they can do many transactions through one institution,” Harris says.

With intense competition in San Diego County among credit unions themselves, Harris says the institutions are trying to make the most of each relationship. “Why customers don’t do more with one institution is a good question,” Harris says. “We’re always looking to establish more of a relationship with each customer, but there’s lots of competition, lots of options, and they do a great deal of shopping.”

The $280 million San Diego Metropolitan Credit Union, which serves city employees and has offices across the street from City Hall, offers members the opportunity to work with a financial planner for annuities, stocks, mutual funds and insurance, including long-term care.

CEO Joe Schroeder says the city’s financial crunch is limiting SDMCU’s growth, and banks and other credit unions are not only competing for customers, but for branch location real estate. Schroeder says SDMCU wants to help customers avoid not only identity theft, but self-inflicted financial problems as well.

“Identity theft is really huge, but we’re calling it part of financial literacy,” Schroeder says. “Young people are coming out of college with heavy debt, about $29,000 in student loans and $4,000 or $5,000 in credit card debt. We want to spend time with people at the high school and college level, so they don’t get in debt right away and have to fight their way out for the next five years.”

Schroeder says he envisions a financial literacy course as part of regular schooling and says he believes financial literacy should be made a qualification to graduate from high school.

Business lending also is on SDMCU’s radar. “We’re having a planning session in September and that’s going to be put before the board (of directors).”

With assets of about $883 million, First Future Credit Union is looking for innovative ways to drive loans, says CEO Marla Shepard.

“One of our thoughts is that people went out and did creative real estate deals, and a lot of them took out short-term, variable interest products, and they’re coming due,” Shepard says. “So one of the products we’ve rolled out is a ‘No, No, No Loan,’ which means the customer pays no fees to convert to a fixed-rate product.”

While First Future offers insurance, including long-term care through its financial services subsidiary, Shepard says the credit union is concentrating on increasing loan volume short-term. Through its own resources and in participation with other credit unions, Shepard says First Future can accommodate multimillion-dollar business loan requests and is looking into SBA lending and identity theft protection.

Shepard says she doesn’t see a day when customers will choose to put their various nest eggs in one nest. “I don’t believe that will happen,” she says. “One institution can’t always offer the best rate on every product. And we consumers like to have the best rate, so we go with whomever has the best deal.”