Geri Dillingham, senior vice president of North Island Financial Credit Union, brainstorms with peers around the country to come up with new member bonuses. (photo/alandeckerphoto.com)

Somewhere in that 1974ish space between food co-ops and second hand clothing stores, credit unions became the financial wing of Bohemian Chic Inc. If you needed new wheels and you were worried about the bread, the nonprofit credit union was not only the place to save 50 to 75 basis points, but also hipper than the uptight, establishment commercial bank.

Credit unions, for those lucky enough to qualify for the much stricter membership requirements 30 years ago, became a smart way of “sticking it to The Man,” alternative finance for the membership warehouse, “why pay more than you have to” consumer movement.

Credit union executives recall the ’70s as a period of comparative tranquility. “Oh gosh, back in the early days credit unions were plain vanilla,” says Jim McPheters, CEO of $850 million California Coast Credit Union. “There was a savings product and a loan product and that was it. You paid 6 percent on deposits and charged 12 percent on loans. Life was simple back then.”

Fast forward to 2006, and credit union lending has come a long way from a couple of thou for a car down payment to a seven-figure sum to jumpstart a member’s “second career” business. Although many credit unions still serve an exclusive affinity group, San Diego has become recognized as a hot spot for serve-all-comers, “community chartered” credit unions, a handful of which have grown to dwarf commercial banks with assets of $500 million or more. San Diegans have stashed about $11 billion in more than two dozen credit unions around the county.

Plastic, ATMs, and online banking have helped credit unions overcome their historic deficiency, lack of convenience.

Credit union capital still needs to be put to work, so think tanks exist to invent new loan products. Executives like Geri Dillingham, North Island Financial Credit Union’s senior vice president, brainstorms with peers around the country to come up with new member perks in a financial services arena splintered by deregulation into thousands of niche markets.

One example is MatriMoney, a savings program for newlyweds which recently ended a “pilot run” at ($1.5 billion) North Island.

MatriMoney deals with a practical problem faced by newlyweds: how to find a tactful way to tell well wishers they’d rather get a check than a crystal candy dish. MatriMoney runs like a bridal registry; North Island provides gift cards so guests can make a deposit to the couple’s MatriMoney account. North Island will also kick in a $100 donation to match the first $100 in gifts to the couple.

Dillingham says the program is being fine-tuned to include a financial education module for newly marrieds. “Other credit unions from around the country are calling us for details on how to set up MatriMoney,” she adds. “It’s pretty exciting when you see members of an industry collaborating on how to help members.”

Another novel loan product offered at North Island is the Lifetime Auto Loan. “Once you qualify, it’s there for you for life, you don’t have to reapply,” Dillingham says.

Some perks are not immediately embraced by consumers. Take North Island’s Identity Theft product, which charges $8.95 a month for continually monitoring a customer’s credit file and offering up to $25,000 for restorative services should identity theft take place. “Those that take it love it, but it is a slow build,” Dillingham says. “It’s unfortunate, but it seems it’s not top of mind unless somebody’s identity has actually been compromised.”

Mission Federal is a community chartered credit union with assets approaching $2 billion. Chief Advocacy Officer Neville Billimoria says San Diego’s high cost of living is putting a strain on consumers’ ability to afford a home, or to keep from borrowing against it. “The national rate of savings hasn’t been this bad since the Great Depression, so if your money isn’t in savings, it’s in your home, and those that have homes are leveraging that equity,” Billimoria says. Thus, Mission Fed offers interest-only loans to spread the payments.

Auto loans remain a credit union profit center, and Mission Fed offers a “blank check” product, where the consumer qualifies at the credit union and is handed an as-good-as-cash check which can be used in a purchase from the dealer.

“There are two types of buyers, those that love to negotiate, and those that absolutely hate it,” says Billimoria. “If you want to negotiate, let us equip you with all the right questions.” In fact, Billimoria says if the car buying experience leaves customers flat, they’ll have a consultant shop and deliver the car to their door.

Perks at $850 million First Future Credit Union, another community charter, include deposit products designed to make saving at a CU more attractive. Last year, First Future started offering products that take advantage of rising interest rates, says CEO Marla Shepard. “There’s a money market checking account that pays 3 percent with a $10,000 minimum balance,” Shepard explains. “We also offer a two-year CD where the rate changes monthly; that has a $5,000 minimum.”

On the business side, Shepard says CUs are sensitive to members finishing up a civil service career or deciding on a business career while in their 40s. First Future has financed apartment buildings and hotels to jump-start second careers, Shepard says.

Another timely First Future perk addresses customers who come out of a car lease owing more than the car is worth. Upside-down auto loan protection allows the borrower to receive more than 100 percent financing, so that there’s a cushion if the lease goes upside down.

USA Federal Credit Union provides a considerable number of loans for manufactured housing throughout the county, says CEO Mary Cunningham. For some young enlisted members, she says, ‘it’s the only game in town.’ (photo/alandeckerphoto.com)

USA Federal Credit Union is doing what CEO Mary Cunningham calls a “bang-up business” in loans for manufactured housing throughout the county. “For some of our young enlisted members it’s the only (housing) game in town,” Cunningham says. “It combines overall affordability and low payments, and we’ve had low numbers of defaults and high success rates.”

Strange as it may seem, one of the perks of membership at $700 million USA is not having to be in San Diego. “Our (military) members don’t stay put,” Cunningham explains. “Forty-five percent of our members join in Japan and Korea and they get scattered to the winds. We have to do a good job on our electronic services, and with call centers and mailing programs.”

Other perks, such as Cal Coast’s financial education programs, are a benefit to the community rather than an individual. In addition to providing free financial education seminars for members on home buying and investments, the CU works with half a dozen schools to help students create and manage a budget.

Then there are perks customers would rather not use at all.

“When we had some members that lost their homes back in the fires of ’03, we gave each of them $1,000,” says McPheters. “It goes back to that original credit union ‘people helping people’ philosophy. That’s really what we’re all about.”